Recently, the biggest news in the storage market is not the release of a certain product by a certain brand, but the use of hard drives for mining, and the resulting wave of industry-wide shortages. So what exactly is hard drive mining? Who is Chia Coin?
Since Satoshi Nakamoto brought Bitcoin to the forefront in a ground-breaking move, in the past ten years, the digital cryptocurrency business with decentralized and anonymous transactions, which we commonly call “mining” business, has become a “big change” that has not been encountered in the development of the DIY industry in decades.
How does "mining" affect the ecological development of the DIY industry, and how does it trigger "big changes" in the industry? The core is hardware computing power. When talking about hardware computing power, we need to first understand the so-called "mining". Let's take Bitcoin as an example. The principle of Bitcoin mining is based on the mathematical puzzle of the SHA256 algorithm. After confirming the network transaction, the Bitcoin network will give equal Bitcoin rewards based on the amount of computing power contributed by the miners.
01Bitcoin principles and algorithms
According to the basic algorithm of Bitcoin, the total number of Bitcoins is 21 million. At the same time, Bitcoin generates 1 block (block) every 10 minutes. Each block has N Bitcoins as reward. This reward will fluctuate according to the number of participants in mining and the total number of Bitcoins. This block contains all Bitcoin transaction information in the last 10 minutes.
In fact, anyone can become a Bitcoin miner by running software on specialized hardware and listen for transaction broadcasts through the P2P network and perform the appropriate tasks to process and confirm these transactions.
Bitcoin
However, these new transactions need to be included in a block with a mathematical proof of work to be confirmed, and this proof needs to be generated by trying billions of calculations per second, and miners need to run these calculations before these blocks are accepted and receive rewards.
Therefore, in order to complete billions of SHA256 calculations faster, contribute more computing power, and catch up with other miners to obtain Bitcoin rewards in advance, miners need more hardware to provide more and stronger computing power, so GPU has become the password of wealth in the eyes of miners.
SHA256 encryption is core
This is one of the important reasons for the large shortage of graphics cards in recent times. In fact, not only Bitcoin, but also digital currencies such as Ethereum are based on GPU computing power, which is used to parse and calculate SHA256 encrypted information, thereby obtaining corresponding currency rewards.
02Bitcoin Earnings
Maybe someone asked, what happens after receiving currency rewards? What is the significance of digital currency? Trade, realize, and convert digital currency into real currency. The ultimate driving force for the above-mentioned mining behaviors is that these currencies can circulate in the online world and can even be exchanged for real currency at astonishing exchange rates.
Bitcoin real-time exchange rate
Bitcoin exchange rate trend chart today
Just before the author published the article, the exchange rates of a large number of digital currencies, led by Bitcoin, continued to skyrocket. Among them, the unit of Bitcoin was an exaggerated US$63,134.17, or RMB 412,300, ranking first in the industry. At the same time, the author also intercepted the ranking of the top ten digital currencies by market value today. From the list, it is not difficult to find that today's mining has become a success, forming a strict and regular currency circle system similar to the real-time buying and selling of the stock market.
Whether it is unit price, total market value, or transaction volume, it is not difficult to see the current mining craze and the vastness of the market.
Ranking of the top ten currencies by market capitalization in the industry on the day
If it is understandable that the GPU graphics card industry was breached and occupied by miners because of its super computing power; then the arrival of the recently emerged Chia currency, which uses hard disks as computing tools, has triggered an embarrassing scene of hard disk shortages in the entire storage industry. It seems very unreasonable.
03 Principles of Chia Coin and Hard Drive Mining
Chiacoin, similar to Bitcoin, is also a digital currency based on decentralization and capable of anonymous transactions. Chia was registered in August 2017 with the aim of developing an improved blockchain and intelligent trading platform. In terms of algorithm, it was born out of the Satoshi Nakamoto algorithm and made innovations. Unlike traditional BTC and ETH that use proof of work (POW), Chia uses "proof of space and time" (Proof of Space and Time) to use the remaining storage space in storage devices (computers, servers, NAS, etc.) for mining.
Chia coin chia interface
The mining principle is that ordinary users plot the unused space on the hard disk by installing software. The software will generate and store a collection of password numbers on the disk as plots. These users are called farmers. When a new block is broadcast on the Chia Network blockchain, farmers will scan their plots to see if they have a number that is close to the new challenge number derived from the previous block. This process is called mining.
Mining
A simple understanding is that before starting mining, users need to sow or draw (plots) in the idle hard disk space, and then farmers (farmers) find the optimal solution on the P disk files (plotsfiles) that have been sown.
Drawing or sowing (plots) completion page
The essence of Chia coin's use of hard disk mining is to first write the encrypted data to the hard disk (plots process), and then the mining program finds the optimal answer in the drawn P disk file (farmer process). In other words, the higher the total capacity of the P disk file relative to the entire network capacity, the faster the search for the optimal solution will be, and the higher the corresponding mining income will be.
04Chia Coin Operations and Revenues
As for the reward issuance of Chia coins, it basically refers to the operating model of Bitcoin, that is, in the first three years after the launch of the main network, one will be generated every ten minutes and 64 Chia will be awarded; 4-6 years after the launch of the main network, the reward will be halved, that is, 32 Chia. Going forward, it will be halved every three years, and the reward model will be 4 Chia every 10 minutes starting from the 13th year.
From the entire mining process and reward establishment, it is not difficult to see that Chia and Bitcoin are almost identical in model and method. They both use idle hardware resources to verify the corresponding block results based on a certain algorithm proof, and finally obtain system rewards.
Selection disk page for seeding and plotting
There are differences only in terms of hardware requirements. Traditional mining, led by Bitcoin, uses workload as proof and emphasizes computing power and performance, while Chia uses idle storage space for drawing and verification in a space and time proof manner. In other words, Chia puts more emphasis on the utilization of idle space and does not require the performance of the storage product itself. The larger the capacity, the wider the area drawn and sown in the Chia blockchain, and the greater the probability and speed of verification and seeking optimal solutions.
05 The turmoil and challenges brought by Chia currency to the storage market
From this, we can imagine that with the influx of Chia coins, enterprise-level mechanical hard drives that operate stably, have ultra-large capacity, and are relatively low-cost will be out of stock just like graphics cards. At the same time, due to the need to store a large amount of cache space during the seeding process, high-performance and large-capacity SSD products will inevitably become auxiliary tools for mining and face the risk of being out of stock.
Large-capacity mechanical hard drives are out of stock across e-commerce channels
Offline dealers are also completely out of stock
In fact, less than two months after Chia Coin launched its mainnet, domestic mainstream e-commerce platforms have already experienced large-scale shortages of large-capacity enterprise-level mechanical hard drives, with capacities ranging from 8T to 18T. Almost all of them have been bought out by large mining factories. As for offline distribution channels, it is even more shocking. There has been a rush for mechanical hard drives that has not been common for many years. Regardless of the model or capacity, as long as there is a large-capacity mechanical hard drive, it is sold out as soon as it arrives.
Both caching and drawing take up a lot of storage space
As for the SSD field, as an auxiliary tool for Chia coin mining, due to its relatively high purchase price and non-essential role, there has been no rush for goods for the time being; however, with the scarcity of Chia coins and the increasing number of mining people, large-capacity high-performance solid-state drives may appear, creating a strange situation like graphics cards being monopolized by miners.
The arrival of Chia Coin will not only cause a shortage of storage products, but will also trigger the fragile upstream supply chain system, breaking the long-standing fixed supply that has been slowly rising, causing supply chaos in the entire consumer and enterprise storage markets. Individuals and companies in urgent need of storage products will face the potential threat of having no disks available or purchasing them at high prices. This is extremely dangerous for the entire storage industry.
In the pursuit of profits, a large number of storage products are used for mining, causing chaos in market supply; when the Chia currency trend passes, a large number of idle storage products will be used as junk second-hand hardware and flow back to the primary market, triggering a market quality control crisis again.
Bankruptcy game of drumming and passing flowers
With this coming and going, apart from those miners who have made a lot of money in mining, what is left to society and the industry is only a pile of chicken feathers. The so-called drumming and spreading of flowers is probably nothing more than this.
It’s just a lovely person who is in the midst of the Chia coin turmoil and always firmly believes that he will not be the last one to take over, but who can know?
Postscript: At the same time as the author was closing this article, news came from the currency circle that the selling price of OTC Chia coins has reached 200 yuan per piece. The bustling world is all for profit, and the hustle and bustle in the world is for profit. Who can be alone?
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