What is Chia cryptocurrency and why is it bad news for hard drives?

Oh I wouldn't be so sure about that. From their FAQ:

" Why are we pre-farming?

Chia has a novel business model to both, lower volatility of the coin and increase adoption. By loaning Chia and managing the interest rates of those loans as well as other tools like buying our stock with chia coins, we hope to lower the quarter to quarter volatility of the coin. To drive adoption, we intend to loan Chia to Global 5000 companies who will use it to pay their international vendors quickly, less expensively, and more securely. We also intend to use the strategic reserve to aid development and adoption. We plan to do things like invest in promising startups in the Chia ecosystem, potentially increase farming rewards during limited periods of time to spur additional farming, and fund corporations paying 105% of the value of their international payables in Chia instead of fiat currency.

Is Chia doing an ICO?

No. Chia is not planning an ICO. Instead, our goal is to take the company’s equity public on an American stock exchange. This way, shareholders can share risk and return with management with transparency and disclosure and we can use well understood corporate controls to make binding statements about how Chia Network intends to use the Strategic Reserve. The Chia digital money is meant to be a useful payment instrument and not an investment opportunity. Chia intends to complete a fully compliant SEC registered equity IPO and will come to market as market-timing is amenable after the launch of mainnet. "

Bitcoin may not be what it set out to be, but how is that a bad thing? The market decided whatever it should be.

What bitcoin did is inspire creation of many, genuinely interesting currencies, some even learning from bitcoin's failings: Stellar.org that aims to form a new kind of backbone for instant worldwide asset transfers; Monero that enables anonymous payments; and MakerDAO that makes it possible to transact across borders with a stable digital-currency, DAI.

Banks (like eco, onjuno, dharma) and other financial instruments on the Ethereum network (like curve, aave, compound) are a reality today. The space is far more than just currencies. Besides, networks like Cosmos, Polkadot are going to enable an even richer crossover among various currency networks that today is exclusive to Ethereum altcoins via uniswap, mdex et al.

I agree that mining seems like a lot of waste but Delegated Proof of Stake and other advances aim to address those issues.

But since this thread is about an altcoin: Almost no other altcoin enables me to run my own fully-validating node on cheap hardware. And that is 100% a requirement I have since the whole point of crypto to reduce trust to a minimum. I don't know about the details of Chia, but as far as I know most coins with "smart contracts" built into the blockchain require expensive full nodes, so I personally do not see much appeal.

You can say the same about people in adtech.

Why? Because by the very nature of storage, it is infinitely more profitable to farm only unused extra storage than it is to buy new storage specifically for farming. I'll follow with a more detailed explanation below.

Since the marginal cost of using extra space on a hard drive you already bought is near zero, this should theoretically drive the farming rewards for Chia so low that it's not economical to buy a hard drive specifically to farm Chia.

In contrast, consider compute. If I try to use extra cpu power on an average computer or server to mine bitcoin, compared to the high end GPUs and ASICs this extra amount of compute I have within my average computer is so small it would barely generate any rewards. Given that using more CPU also causes more power consumption, it also costs more.

So putting this together, due to the existence of specialized/more-performant hardware and the fact that using more CPU/GPU incurs a cost, most of the people buying high end GPUs (or definitely ASICs), are buying it primarily for mining. In contrast, with space, since it's always near free to use storage you already bought, and everyone is on a near-level playing field, the market is only profitable for those with no sunk costs. At least, that's just a theory.

Just a thought, but who knows. We'll see in time.

Viagra was originally developed as chest pain medication. Did it utterly fail, simply because a new use-case was unveiled?

Which begs the question, what is the new use case for Bitcoin? Some say digital gold, but only time will tell.

Premined, just like Ethereum and all the other shitcoins.

The latter isn’t necessarily greed, lots of people just don’t have the good fortune to make a comfortable amount of money (as those of us in tech do) so are more susceptible to bubbles.

Which is all that is needed to create a fair bargaining position for the consumers.

It does allow you to have an "account" outside any jurisdiction, and allows you, given good opsec, to transfer huge amounts in transactions not controlled by any state. Like, millions of USD.

Bitcoin is obviously useless to pay for daily goods, like a coffee. But gold would be also impractical for such a case.

Crazy speculators pumping the value of bitcoin may look unreasonable, but again, for those who have millions (and maybe even billions) in bitcoin, they are weirdly... useful.

Overall, I am inclined to say that this is a submarine and HN is falling for it.

Regardless, more to the point of the article, the argument and moral panic rings hollow. Chia just incentives other people to store data for people who want to store data. The place, overhead and mechanism of data retrieval is different, but, still, someone wants to store the data there and they pay for it. So how then is this more of a threat than cloud providers for example?

Later Edit: I mistook Chia as having a similar approach as Filecoin, but, on closer inspection, it seems that they do not store data people want they just store data to prove it's stored and use that to distribute mining rewards. So I was wrong at this end. Still, I maintain my opinion this is a submarine.

Say the network has seen 1TB of data before with hash H. It can generate a random number as a challenge, and request a miner to prove they have access to the 1TB worth of pre-image at the same time it has access to the random challenge. The only way for a miner to compute such a proof is to have the 1TB of data stored somewhere.

[1] https://cryptorials.io/beyond-hashcash-proof-work-theres-min...

https://www.orchid.com/

You can run a node and sell bandwidth to people who want to proxy traffic through your node

https://pkt.cash/ exists "built to incentivize the growth of infrastructure," and "PKT Network is designed to decentralize internet access around the world by enabling anyone to become an ISP." [0]

A key component of the PKT Network is cjdns (https://github.com/cjdelisle/cjdns).

[0]: https://pkt.cash/PKT_Network_v1.0_2021.02.01.pdf

A) Let everyone have their fair share of bandwidth

B) with DPI, choke other miners so I'm relatively better in the whole miners.

Also, bandwidth will be wasted just for the sake of proof-of-work instead of traditional work that have real values on its own.

My CS knowledge got really rusty, but I think it should be possible to put tight bounds on the computational cost of these, as well as statically guarantee that certain states cannot be reached, both of which would be very valuable in this case.

Yeah, I doubt that

Functional programming might makes it easier to detect flaws in your programs, but when there is billions at stakes and no recourse in case of a bug, you really want your program to be flawless.

Some of us did. Last month marks 10 years since I was introduced to the community and registered on the bitcoin-otc. We bought and sold all sorts of random crap (food items, laptops, gadgets, one regular even paid people bitcoin to have them buy him lunch. A brief time existed where some of the more idealists expected bitcoin to replace Paypal. That obviously didn't happen.

Starting with Satoshidice gambling the network performance started to crap up and fees began to climb. Eventually it became worthless for any sort of fast/cheap transacting and everything centralized onto a few exchanges. Every asshole in the world has proposed ways to improve this issue, but with all the money sunk into bitcoin and a lot of arguments we aren't in a better situation today.

Now every naive person from 20-some year olds to 70-year olds are hitting me up and asking what I think of NFT's and the shitcoin of the week because they saw some heads on Bloomberg gushing over it and I'm just tired of it all.

Q1: Why would people accept these currencies in the first place? I want to hold Bitcoin because of its monetary policy. It has a fixed, capped supply of 21 million BTC, whereas fiat can be printed at will. This property is what fuels the current hype, and the fact that central banks around the world are inflating money supply as we speak certainly helps the narrative. So for bitcoiners, money saved in fiat is likely to lose buying power over time, but in Bitcoin we see, on average, a steady increase. Since I see Bitcoin as a superior form of money, I would certainly prefer getting paid in Bitcoin than in fiat.

Q2: Why do people that accept Bitcoin still denominate prices in USD? Bitcoin is far from being an established currency, and it is still very volatile (though far less than a few years ago). Most of the population are not bitcoiners. The US are denominated in USD. So, until Bitcoin is both more stable and more popular, it is the most convenient to do what we're used to and denominate things in USD.

Q3: Is speculation the primary reason for Bitcoin's rise in popularity? We're in the middle of a bull run right now, so probably? But if you zoom out and look at the price evolution over 5 years it looks different, and there is a steady growth.

Q4: Do people just want to increase their USD? ("spend 10,000 [...] and then extract 15,000 fiat") Some do for sure, but I don't see much appeal in exchanging hard money into money with arbitrary monetary policies. Bitcoin tripling in value does not change the initial motivation I had to buy it, so why sell? Of course, if I want to buy something with btc then that amounts to selling some. But my motivation to be in Bitcoin is to protect my time, the most limited resource I have in my life, from inflation, and that does not change with price.

1. Main advantage of it is that it can't be stopped.

2. Since it can't be stopped - it allows to evade any regulation from the government or the bank. If it replaces banking system - you can move around the globe with your capital and spend it the way you like. This is not the case at the moment

3. Bitcoin could become a currency if it was fast enough and fees were low enough. Which was quickly discovered to be not true since the complexity increased, transactions slowed down and no one agreed to upgrade block size since this is additional costs to mining.

4. Since bitcoin now is slow and expensive industry found another way to use it - store long term value without risk of government to inflate currency and steal your money. point#2 is still valid. Recent surge in prices is caused by this reasoning in my mind.

5. Since everyone earned enormous amount of money in past months people will keep hodling expecting the growth to continue, but it will slow down. Once it slows down - people will start selling to get their profits and there will be huge correction.

6. In the very long run bitcoin can go through multiple cycles of such growth and decline and either will become more predictable (community will come up with some rules on how bitcoin fees and speeds are regulated etc.) or will stay this a bit more dangerous but a but more free way to transfer value geographically and also over time.

It probably could be more dangerous to world governments if point #3 realized

It seems to be true.

You could then reasonably think of Filecoin as a futures contract on generic file storage capacity. Ethereum is a futures contract on computational horsepower. Bitcoin is something else(?) - perhaps a futures contract on a general long-term abstract form of value storage. In short: Some of these tokens act as futures contracts for decentralized compute capabilities. The most-common current use case happens to be heavily related to finance (DeFi); applications for censorless content networks are also in development; and the applications are really quite general purpose.

Anything today that requires a ledger is a reasonable problem to tackle too, where eliminating centralization could be beneficial. E.g. ENS instead of ICANN for domain names, tokenized stock certificates instead of relying on opaque organizations owned by major banks (e.g. the DTC and problems around naked shorting).

The end goal isn't really clear. Perhaps the main thesis is like VC investing. Cool stuff now might become useful and valuable later.

Changing stock trading protocols to go on a block chain with full public transparency would be a useful application. No need for PoW, you can just have the Fed mint new blocks out. This would prevent a lot of the shenanigans and gatekeeping that occur in capital markets. It would greatly improve price discovery.

On a less directly applicable level, I feel that the only realistic strategy for governments in the long term will be to become more competitive with the crypto-ecosystem (currencies, contracts, encryption, etc.). The hope being that by allowing individuals to freely choose their own legal and financial rule-sets the systems that will remain relevant will become better. Having more freedom of choice for which government you'd like to be a part of is ultimately a good thing. Whether that will actually shake out is anyone's guess, but I believe something along those lines is the fundamental hope of this area of technology.

From their homepage:

> Examples include protein structure prediction (Rosetta@home), mapping the Milky Way galaxy (Milkyway@home), and tackling problems in public health and clean energy (World Community Grid).

https://www.newsbtc.com/news/foldingcoin-where-people-mine-p...

Things that would make sense:

- SETI@homeCoin, ala https://en.wikipedia.org/wiki/SETI@home

- ArchiveCoin, ala https://wiki.archiveteam.org/index.php/ArchiveTeam_Warrior

These would actually be useful.

https://www.chia.net/2021/02/22/plotting-basics.html

[0] https://nano.org/

I'm curious what you ended up paying. I bought drives on sale, and got nine 16TB external drives to shuck (one is a spare) for ~$2250 USD taxed and shipped.

I will warn you though that burn-in testing is going to take a while. I did a very exhaustive test[1]... and two drives at a time over USB3 it took about twelve calendar days to test them all before I put them into service.

-- ----- ----- ----- -----

[1] Write out block pattern, read back. 2 hour break. Head thrash random writes/reads for 2 hours. 2 hour break. Head thrash random writes/reads for 2 hours.

i.e Filecoin's and similar coins should have value directly tied to their use to store data while Chia is just another crypto that has no 'intrinsic' value outside its use as a currency and computation platform.

4.81EiB is ~5.54EB. Filecoin has been around for ~81.5 months. That's an average growth rate of only ~68PB/month, but we can of course assume that the current growth rate is higher. For example, last year there was a period where it grew 250PB in a month.

Chiacoin has supposedly added ~200PB to its mainnet in the past 24 hours. That growth rate is also still climbing.

Seagate has been quoted as having an current HDD manufacturing capacity of ~350EB per year. The general assumption is that between Seagate, Western Digital and Toshiba there's likely a total manufacturing capacity of close to 1000EB a year.

Of that 1000EB, a large percentage goes to OEMs and SIs, another large percentage goes to direct customers (Alibaba, Amazon, Apple, Facebook, Google, Microsoft, etc.), and the remainder goes into the sales channel (retail, VARs, etc.). OEMs, SIs and direct customers have contracted supply and pricing, whereas the sales channels do not. Channel is likely 30-40% of current production volume. So that's 300-400EB a year of capacity across all manufacturers going into the sales channel where end users can buy from.

-- ----- ----- -----

At 0.2EB/day of growth, that is 18-24% of all channel volume being consumed just by new Chia farm plots. At that rate, that'll cause channel supply issues very, very soon for certain. Once channel supply becomes exhausted, prices will rise since the demand is there.

The issue is... what ends up happening to the sustained growth rate? If it were to reach something like 1.0EB/day in growth, that is basically all of the normal channel capacity being spoken for just by Chia farm plots. That's an actual disaster for end users.

Manufacturers can't respond to those demand spikes instantly. They can respond some, for certain, but if some component hits maximum manufacturing capacity, you need to expand or build new factories (whether the manufacturers, or contract manufacturers within the supply chain for certain components). Building new factories is not quick. Not just construction, but ensuring that the demand will be sustained so you don't end up with these huge capital expenditure factories going idle when demand wanes.

How can filecoin possibly be that cheap?

Providers like B2 and wasabi are 6-7 cents. Sia spent a while in the single digits is currently around 10. This is less than a tenth of a cent?

Unfortunately, it's a lot harder to follow than Satoshi's at least for me.

Governments so-far failing to regulate existential threats to themselves is honestly odd.