Is now the time to enter mining?

Chia, the so-called “green bitcoin,” is buzzing with excitement as soon as Musk calls it out.

Is now the time to enter mining?

On May 13, Tesla CEO Musk tweeted that Tesla is considering using cryptocurrencies that consume less energy. He also expressed concern about the environmental impact of bitcoin.

As soon as Musk shouted, Chia, the so-called “green bitcoin”, got lively.

The market is full of emotions in the face of this positive news. In fact, a few days ago, Chia was still struggling with the whirlwind of public opinion.

Recent Chia Shakeups

On May 7, Chia founder Bram tweeted: the prototype of the official mining pool scheme is expected to be released on May 17, the previous P’s K32 file does not support the new mining pool, if you need to access the official mining pool, you need to re-P the map, the previous k32 can not get a stable burst block mechanism.

The news was fermented in the self-published media two days later, Chia’s network-wide arithmetic power dropped to 3,001 PiB from 3,219.63 PiB on May 9 to 3,001 PiB on May 10, a drop of over 218 PiB.

The sudden drop in Chia’s network-wide arithmetic power is very closely related to the analysis of Chia founder Bram’s tweets by self-publishing speculation and proliferation, in which “the K32 file does not support new mining pools” and the previous P-disk will be invalidated after the mining pool protocol comes out and blocks cannot be obtained; at the same time, the mining pools bound by miners will be The mining pools bound by miners will be invalidated after the mining pool protocol comes out.

These two analyses are a fatal blow to Chia miners, but a careful reading of Bram’s tweets will make it clear that the old K23 file has a lifespan of 7-15 years, and after the new mining pool protocol comes out, miners can still SOLO mine, but they just can’t join the new mining pool protocol; miners voluntarily choose whether to join the new mining pool protocol or not, and they must re-pan to join the new mining pool protocol.

Is now the time to enter mining?

The incident has been fermented so far, and Chia miners’ active has risen once again. According to Chiaexplorer data, as of 8:00 on May 13, Chia’s effective network-wide arithmetic was 4114.29 PiB, compared to 2709.45 PiB on May 10, the network-wide arithmetic rose by 1400 PiB, and the current number of active miners was 121,179.

After a short period of volatility, more miners have flocked to the Chia mining circuit, and the cryptocurrency/mining community has fallen into a mood called FOMO, praying that they will be part of the next wave after hearing and witnessing a legend of riches.

Bitcoin “Imitators”, Where is Chia “Green”?

“Bitcoin’s legend of riches has made the blockchain industry what it is”.

I don’t think anyone will object to this, but if you want to refute it, I’ll have to say “I want to I think”.

On May 22, 2010, a programmer used 10,000 bitcoins to buy two pizzas worth $25. On May 13, 2011, the price of bitcoin was still at a few dollars a piece, and in 2021, the price of bitcoin has already passed $40,000, broken $50,000, and nearly $60,000, up 15,000 times in ten years. “miracle”, because trading BTC, hoarding coins, and mining, people with assets over 100 million abound.

Now, Bitcoin is not only a cryptocurrency, but also the hidden backbone of the crypto market, the hidden faith in the hearts of retail investors. The “sky-high” price of bitcoin may not be something that any retail investor can hold, but the vast majority of people who speculate in bitcoin can’t help but think “as long as bitcoin is still around” during several black swan events.

The thinking of the crowd has become the direction of research as to who will be the next bitcoin and who will become the next generation of crypto market “legends”. And retail investors looking for a way to bet on the next bitcoin are also looking forward to their own fortune and freedom.

With the complex and multi-dimensional sentiment of the market, Bitcoin has seen an endless stream of “imitators”. Among the many imitators, copycats, and borrowers, Chia is one of the best.

Some say that Chia was born with “noble blood”.

Bram Cohen, the founder of Chia Network, is the founder of BitTorrent, and Ryan Singer, the COO, is the co-founder and COO of Tradehill Inc.

The investment institutions behind Chia are also of great importance, with a16z Crypto and Galaxy Digital being globally renowned investment institutions. It is understood that so far, Chia has received $16 million in financing, and is expected to be listed on NASDAQ in August this year.

May 7 news, Amazon’s cloud services platform layout Chia, the launch of Chia coin solution.

One of the main reasons why Chia is so sought after is the aura it carries.

The other major reason is the nature of Chia – “Green Bitcoin”.

This brings us to the topic of Bitcoin’s waste of resources involved. Current bitcoin mining requires large physical mining machines as well as mining farms that operate consistently and have abundant power resources.

According to reports, the electricity currently consumed to produce bitcoin for a year could be used by 20 million people for a year. The issue of high energy consumption has become an inevitable issue that needs to be explored for the long term development of Bitcoin.

Bitcoin mining has become a professional activity that only a small number of professionals can engage in, and the vision of so-called decentralization seems to be moving away.

Chia’s so-called “green bitcoin” is a more energy-efficient, decentralized cryptocurrency than the “wasteful and scary” bitcoin that founder Bram described.

This relies heavily on Chia’s Proof of Space and Time consensus mechanism. The following is an overview of the Proof of Space and Time consensus mechanism through the Chia mining process.

Chia mining is a process where users write a large number of Nonce (arbitrary or non-repeating random values that are used only once) in Plot file format on the hard drive space, a process called P-disk, which is similar to the cultivation process of planting seeds on a spare field, hence the image of “Farming “The user who participates in Farming is called a “farmer”.

The probability of a farmer winning a block is the percentage of the total space of the network that is available for each plot. This means that the more space on the P-disk, the higher the probability of winning a block.

To prevent top farmers from creating alternate transaction records to attack the system, Chia uses VDF (Verifiable Delay Function) to implement the temporal ordering of blocks to ensure the relative security of the network.

Chia mining is relatively simple and easy to operate to attract more and more miners to join, and the popularity has brought an explosion of hard disk mining.

Who is behind Chia?

Chia mining claims to achieve green, low-energy decentralized mining primarily using an oversupply of surplus disk space, eliminating or replacing energy-intensive ASIC hardware for verification and transactions.

We talked about Chia’s strong founding team above, making it a halo, but this original “expat” is only hot in China, and some even suspect that this project is likely to be a domestic dealer-run project.

The netizens broke the news, especially Zhang Jian, Xue Bazi and other coin circle “seniors” who had sunk for several years suddenly came out and started pouring mining machines, reminding people of the 2017 “coin circle madness”.

The so-called hard drive surge is also the current situation in the country, it is understood that many people in the circle can easily buy goods from Southeast Asia and other countries and regions, the hard drive market in the United States almost no fluctuations. And many of the Chia miners sold domestically are poor quality products that are cheaply wholesaled back from abroad and sold at high prices when demand exceeds supply in the domestic market.

According to foreign media tomshardware news, recent data shows Chia coin mining can make consumer-grade SSDs very susceptible to damage, running out of write life in a matter of weeks.

The hidden story behind Chia is constantly speculated, no matter what the truth is, but its burst of fire must not be without the push of certain vested interests. Ultimately this is a heat wave of wealth, or a raging storm, let’s do the math first.

“Real farmers” & “fake farmers”

In the face of the interests, people were red-eyed, solid-state drives were out of stock for a while, even at a 10 times premium, and the waste of resources in the middle was even reported by major media, and “cryptocurrency” was once again out of the circle.

According to Chiaexplorer data, as of May 13, 8:00 p.m., 1TiB is expected to harvest 0.0022 XCH per day, and the time for 1TiB to harvest 1 XCH is 1 year and 92 days.

On April 5, Weibo user Chia mined, 60T could harvest 2 XCHs a day on average. but according to the current data, the number of XCHs harvested in a day is 60×0.0022=0.132, and it takes about 15 days to harvest 2 XCHs.

The reporter interviewed many Chia miners, and one of them, a family Chia mining miner, said that he entered on April 16 or 17, and probably invested tens of thousands of dollars in equipment costs, and he has achieved a return on his capital at the XCH opening (May 4).

In terms of 1P arithmetic power, when he first entered, the network-wide arithmetic power was about 300 PiB, and the daily production was 30 B, worth about $30,000. Now the arithmetic power is over 4,000 PiB, and the current daily production is only 1.51 B, worth about $1,500.

From this, we can see that with the exponential increase in arithmetic power across the network, the number of miners entering is increasing, mining is becoming more and more difficult, and without increasing the hard disk space in advance, the mining revenue is becoming less and less, and the payback period will become longer and longer. At the same time, miners need uninterrupted drawing, drawing, P disk, P disk, P disk speed can not keep up with the number of arithmetic growth, the return of capital is even more remote.

Essentially, the mining industry follows the law of survival of the strongest. Mining needs to be configured with basic mining machine costs, maintenance costs, etc., without financial support is not possible to mine.

According to the running financial reporter, most of the current small arithmetic will choose to enter the mining pool, basically the mining pool will deduct 30-40% of the arithmetic.

And the market has appeared a large number of Chia miners, according to the survey, 120T arithmetic Chia mining machine cost about 60,000, in the case of the whole network arithmetic power remains unchanged, the payback period of more than 30 days, not to mention the whole network arithmetic power increased by about 15% every day.

“The words “farming” and “farmers” seem to create a sense of equality and equal treatment for all beings, but in reality, the reality is still cruel and the survival conditions of small miners are being pressured. The small miners who are now entering the market are making money in the cracks, and will eventually have to compromise with capital and centralization.

While the market is looking towards money, Chia’s original intention and vision may also be getting further and further away.

In the long run, as Chia mining becomes more and more market-oriented, Chia will still face the same dilemma as Bitcoin when the arithmetic power is close to saturation state, how to ensure low energy consumption operation?

In terms of value, amidst the FOMO sentiment fueled by the bull market, 2021 has become an unbelievable year for the crypto market, with absurd drama after absurd drama of NFT, animal coins, FIL, cottage coins and other value multipliers continuously staged, and the value bubble of XCH making the market unable to see the way forward.

In this way, as Chia, which is committed to becoming a global financial and payment system improvement, the consensus of this vision is not solid. With regulation, compliance, landing application and value consensus, Chia is seeking up and down and has a long road ahead.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/is-now-the-time-to-enter-mining/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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