Chia Coin uses a proof-of-space system that relies on the storage capacity of devices used in mining instead of computing power.
The price of Chia Coin looks to have rebounded, after losing almost half of its value amid its network and mining issues. Chia coin was highly anticipated ahead of its launch as it was dubbed an ‘eco-friendly’ alternative to Bitcoin. Chia coin debuted on the crypto scene on May 3, with a unit going for $1,600 per listing price. The price of the digital coin soon surged, peaking at $1,800 on May 4, before losing more than half of its value in the hours and days that followed.
The price of Chia Coin fell to around $560 on May 6, down over 67% on its maximum price after news broke on its mining issues as ‘farmers’ started to cash in their investments. Chia Coin’s parent network was designed by the founder of BitTorrent, Bram Cohen as an alternative to the rapid rate of centralization of the cryptocurrency mining sector, which is now dominated by large mining organizations, subsequently pushing out individuals. Chia Coin was also created as an environment-friendly project to solve problems created by Bitcoin mining, opting for a different system with regards to the mechanisms used in mining.
Chia Coin uses a proof-of-space system that relies on the storage capacity of devices used in mining instead of computing power. This mechanism helps ‘its farmers’ to save storage space to hold cryptographic numbers, called plots and unlike that of Bitcoin and Ethereum, and others, Chia farmers do not need any specialized GPU’s or ASIC hardware to mine the digital coin.
However, reports from China, where Chia Coin mining is predominant suggest that the process of mining the eco-friendly digital coin is far from what its name suggests. Reports from Fast Technology, a local news outlet, revealed that Chia mining does more damage to an SSD or HDD than farmers thought it would.
40 days of continuous Chia mining would wear out the shelf-life of a 512GB SSD based on a data write volume of 256 terabytes within that period. A 1 terabyte hard drive can only last 80 days with the above figures while a 2 terabyte hard drive would be last around 160 days as Chia mining tends to invalidate three to five years of consumer warranty in just over 30 days.
Chia’s mining problem led to shortages of high capacity storage in several regions in China, pushing the prices of such devices up as most farmers resorted to the traditional mining method, taking a toll on the price of the digital coin. After four days of trading below the $1,000 mark, the price of Chia looks to have picked itself up, trading at $1,030.75 at press time, up by 1.37% in the last 24 hours.
Although the coin has seen a dip from the $1,400 range that it recorded on May 8, its upward trajectory remains a possibility as its unique features are beginning to catch the eyes of market experts and investors.