The last cryptocurrency to gain great relevance within the industry has been Chia, a peculiar cryptocurrency. This cryptocurrency is not mined with a processor (CPU), graphics card (GPU), and not with ASIC; It is mined with a hard disk, hence this project is sold as a “green cryptocurrency.”
What is Chia Coin
It is a new cryptocurrency developed from scratch that seeks to be more efficient than its predecessors, hence the choice for hard disk mining. This cryptocurrency is based on Proof-of-Space-and-Time (PoST) instead of Proof-of-Work (PoW) as in the case of Bitcoin.
For mining Bitcoin the used ASIC and the mining ethereum the used graphics cards , which consume huge amounts of energy. Chia proposes the use of hard drives , which consume very little energy , hence this cryptocurrency is called by the developers as “green”.
What is sought with this new PoST system is to take advantage of the hard disk space that we may have and that is not occupied. Inside the hard disk , small divisions of space are created called plots where Chia is grown.
It should be noted that Chia does not have a limit of currencies such as Bitcoin , but instead adopts the Ethereum model. This means that the amount of Chia available can only grow over time , as with Ethereum. We recall that Bitcoin sets a limit of 21 million available bitcoins.
This cryptocurrency is based on the Chainslip language, a proprietary programming language that, according to the developers, is simpler and more robust. What is proposed with Chia and this programming language is to make a Complete Turing cryptocurrency (such as Ethereum) that can host elements such as smart contracts, NFT, tokens, and others?
Chia’s idea is from Bram Cohe, BitTorrent developer It was in August 2017 when he founded the company, which is responsible for the development of this cryptocurrency. On March 19, 2021, the mainnet, an already operational version of the Chia Network blockchain, was launched and mining could begin.
The transactions were enabled the Chia May 3, 2021 , also being listed in some exchange with the name Chia Network and XCH symbol. The initial price of this cryptocurrency was about $ 1,200, reaching highs near $ 1,750, and then falling below $ 600. At the time of writing this article, the price of XCH ranges from $ 1,000 to $ 1,1000.
Currently the CEO and President of Chia Network is Grene Hoffman , who was the founder and CEO of eMusic.com and Vindica. In addition, according to Crunchbase, it has important investors such as Andreessen Horowitz, Naval Ravikant and Cypherpunk Holdings.
During the development of Chia and before launching the mainnet (the final operative version of the blockchain) , a total of 21 million Chia have been pre-mined and remain at the disposal of the developers . The amount of 21 million pre-mined would be a nod to the 21 million bitcoins, which is the limit created by Satoshi Nakamoto for the Bitcoin network.
Chia identifies itself as a “green cryptocurrency “ indicating that its PoST solution is more energy efficient than PoW. As a basis for this “green” idea, some terms are changed, which we will define below:
- Full node: It is possibly the main element of any blockchain network, since it is responsible for storing a complete copy of the blockchain, validating new transactions and blocks, and propagating transactions and new blocks
- Farmer (farmer): Computer system that is responsible for the generation of the blocks (replaces the Bitcoin ASICs or the Ethereum chart rigs). The farmer has the ability to communicate with one or more harvesters
- Harvester (harvester): Network elements that have access to the plots and communicate with the farmer
- Plot: Space on a hard disk where a series of cryptographic hashes are stored that are used to obtain XCH
- Pool: Set of harvesters who join together in order to have the possibility of obtaining more rewards . The reward is distributed among all members according to what they contribute.
- Mojo: Smallest unit that an XCH coin can be divided into
How Chia is grown
The particularity of Chia is that it is based on storage units , instead of ASICs, graphics cards or other computer systems. This, on the one hand, makes access easier for users (a storage unit is much cheaper than an ASIC) and energy consumption is much lower (ASICs or rigs have large energy consumption)
To cultivate Chia (create a file on the hard disk), the software for the generation of the plots is required, which can be downloaded from the official website. This software (which is still a wallet) is available for Windows, Linux and MacOS , so it is accessible to everyone. Additionally we need at least 256.6GB of temporary space on our hard drive for the creation of the plots, which once created will remain at 108.8GB.
The most expensive point in the whole process is creating the parcels . To create the plots , an SSD storage unit is recommended, preferably M.2 NVMe drives because they offer high write speeds. This process can take between 6-8 hours in SSD units , being much slower in HDD units.
Once the parcels are created, it is recommended to move them to an HDD unit , since once created, high read speeds are not required. What’s more, Chia prioritizes capacity over speed once the plots are already generated. Gene Hoffman in an article on the Chia website recommends passing the patches to HDD units and connecting them to a Raspberry Pi 4 with many USB ports.
In short, SSDs are used for the creation of plots that we can move without problems to an HDD unit, what’s more, it is recommended to do so. The HDD units can be mounted on a Raspberry Pi (cheaper and more efficient option), on a NAS or even have them connected via USB port to our computer.
How are Chia obtained?
The reward per block, after previous mining, is set at 64 XCH per block, generating a block every 10 minutes. During the first 12 years, the reward per block will be reduced by half every 3 years.
From year 13 to infinity a fixed reward of 4 XCH is established every 10 minutes , thus reducing the inflation rate. Chia’s inflation rate is estimated to fall 0.5% / year after year 22 after the mainnet was launched.
Reward per plot
The farms have 4608 Chia opportunities every 24 hours to obtain a reward 2 XCH . These plots must pass a filter and thus compete with other plots for the reward.
- Pass the plot filter (Plot Passed Filters): There is an algorithm that guarantees that each plot has 1/512 options to pass this filter. Each plot should filter approximately 18 times every 24 hours.
- Proof Found: When the plot passes the filter it competes with the rest of the plots. All compete through the Test of Work passing about 40 tests per plot. The reward depends to a certain extent on the size of the plot, since the reward is obtained by the one with the closest hash to the one obtained in the creation of the block.
Is it a problem for the SSD market?
Chia mining should not initially impact the SSD market . The generation of the plots is true that they require an SSD for writing speeds, much higher than HDDs.
As an alternative to SSDs, we could create a RAID 0 of SAS HDD drives . Clustering SAS drives in RAID 0 could even result in higher than M.2 NVMe write speeds over PCIe 4.0 interface. Of course, it significantly increases the cost, energy consumption and the risk that a unit of those that make up the RAID is corrupted and the process is lost.
Once a plot is created, we can transfer it to an HDD without major problems, what’s more, from Chia this is highly recommended. And the fact is that HDDs have much greater storage capacity and we can store a greater number of plots.
Therefore we can say that the weight of the SSD in Chia is limited to the generation of the plots. Later we transferred them to an HDD, which we can install on a Raspberry Pi, on a NAS, on an external disk, or even on a mining rig for Ethereum, to give a few examples.
Final words about CHIA
Chia seems to be the umpteenth way to find an efficient solution to the validation of transactions and generation of blocks through Proof of Work . In this case they bet on storage units, which have very low consumption and are easily accessible for the average user.
The possibility of moving the parcels once generated is one of the great strengths of this cryptocurrency. Since it reduces the importance of the SSD, passing the relevance to the HDD, since as we have explained, the greater the capacity, the more number of plots and the greater possibility of winning. It may even be a good fit for the HDD market, which has been in decline for several years due to the mass adoption of SSDs.