If you don’t already know, mining traditional cryptos like Bitcoin and Ethereum uses a lot of electricity as the machines behind these networks churn away at solving equations, raising serious concerns about their long-term sustainability.
Well, to the rescue come a number of new ‘green’ coins, claiming to be friendlier to the environment but promising to fulfill a business need as well.
The case for Chia
A new cryptocurrency that claims to be climate-friendly had a recent trading debut. The virtual coin called chia was created by a platform called the Chia Network and advertises itself as “a ‘green,’ eco-friendly alternative” to Bitcoin.
Its aim is to solve the power consumption of crypto mining transactions that take place on the blockchain that reward miners with a number of coins for a process called ‘proof of work.’
Proof of work involves solving computationally difficult puzzles. Bitcoin’s annual electricity consumption is estimated to be 148 terawatt-hours and rising, or around the same amount as Poland’s.
Chia is a cryptocurrency based on owning a large number of hard discs rather than using computer processors, and thus offers a less energy-intensive alternative to cryptos.
Now, rival currencies are emerging, such as Sia and Filecoin that instead make use of large numbers of empty hard discs, a concept known as ‘proof of space.’
Because hard drives are less energy-intensive to run than processors, proof-of-space currencies are touted as being more environmentally friendly.
However, demand for one such currency, Chia, has become so high that some Asian countries, such as Vietnam, are reporting shortages of hard discs.
Chia is one of the newest cryptocurrencies on the blockchain and has a current valuation of over $1,000.
Due to how Chia operates, you could ruin a 512GB SSD (Solid-state drive) in just 40 days.
Currently, around 3 million terabytes of hard disc space are being devoted entirely to mining Chia, enough to store 3 billion movies.
Jason Feist at hard drive manufacturer Seagate suggested that these new cryptocurrencies could provide a way for companies building large data centers to offset the cost by turning them over to mining.
Michel Rauchs at the University of Cambridge says that while bitcoin’s proof-of-work approach is well understood, proof-of-space alternatives are still in their infancy.
“Users of the Chia blockchain will ‘seed’ unused space on their hard-disk drive by installing software which stores a collection of cryptographic numbers on the disk into ‘plots’. These users are called ‘farmers’. When the blockchain broadcasts a challenge for the next block, farmers can scan their plots to see if they have the hash that is closest to the challenge,” Chia’s FAQ explains.
Chia farming is a write-intensive activity. Speed matters, so the most common strategy is to use an SSD for creating plots because SSDs are much faster than HDDs (Hard disk drive), and then transfer them to an HDD once completed.
The thing about SSDs, though, is that the NAND flash memory cells are only good for so many write operations before they wear out.
Sia is a cryptocurrency software that allows any computer running it to rent out unused hard drive space to users looking to store files.
Sometimes branded as an “AirBnB for hard drives,” Sia is similar to cloud storage solutions like those offered by tech giants Amazon or Google, only rather than trusting a company to manage and store their data, its users rely on software and a distributed network of global computers.
To accomplish this, files stored through the Sia network are sliced into tiny pieces, so only a small portion of each is stored on any one hard drive. The files are also encrypted, so network users can be confident their data is safe from unauthorized access.
Those looking to store files on another Sia user’s hard drive then pay for the privilege using Siacoin, the platform’s native cryptocurrency. Hosts are paid out only after they’ve proven they are storing the file in question.
Sia achieves this functionality by using a form of smart contract called “file contracts,” which establish parameters of the host-renter relationship like price and uptime commitments.
These contracts typically last 90 days and are automatically enforced by the network.
As of 2020, Sia has a network capacity of more than 2 petabytes (2,256 terabytes), with roughly 333 node operators actively securing the network. It currently hosts some 766 terabytes of files.
Filecoin, a type of cryptocurrency, has jumped in popularity this year to become one of the top ten biggest cryptocurrencies in the world.
Filecoin’s market cap is currently around $13.5 billion.
Each Filecoin is worth north of $200 and rising quickly.
Filecoin has seen support in China, where regional reports show the computer hardware firm Xinyuan Technology Co. invested $89 million into technology associated with the cryptocurrency, Bitcoin.com reported.
The Filecoin token is the currency behind the wider Filecoin network, a cloud-based storage system that is operated by its users, rather than a central owner.
Filecoin allows users to request access to cloud storage by using apps such as Slate. Users will then be offered a number of storage options by various other users known as miners, who compete on price and speed. The client then selects their preferred miner and sends the data to the miner for it to be stored.
Miners must provide storage space, and also provide proof that they are able to store other users’ data properly. This is verified on the network, and any blocks of data that are not “correct” are denied.
In return for correctly storing data and verifying the data of others, miners receive a storage payment.
When users want to download data from the Filecoin network rather than upload it, they select a miner who holds the data they want and then pay them to retrieve it.
Additionally, multiple miners across the globe can provide the file, meaning users who want that file are physically closer to it, rather than the file being stored in distant servers.