For the last few years, I’ve had a group of friends who tried to convince me to start mining Ethereum. I have access to a few gaming computers and the required GPUs to mine to make a passive income. I resisted for as long as I could, only because it seemed like a somewhat intimidating project to tackle. I eventually gave in and have been mining Ethereum off and on for the last six months or so, learning as I go — both about the different mining pools and the coming changes to Ethereum but also about crypto as a whole.
I’m not rich yet. The money I have made hasn’t been a lot, but it’s been a fun hobby if nothing else.
Near the end of March, I heard about Chia, a fairly new crypto that claims to be “green,” because instead of relying on power-hungry GPUs for mining, Chia uses Proof of Space and Time. I don’t fully understand the approach (that goes for any crypto), but I do know this protocol relies on storage space and comparing challenges issued by the blockchain to hashes stored in the plots on your spare storage space.
The company’s thinking is that anyone can farm for Chia with the spare hard drive space they already have, with little or no investment required. After being hesitant to get into crypto for years, I decided that Chia was as good of a chance as any to get in at the ground level and see how many coins I could farm. So, I started buying WD EasyStore drives from Best Buy, which were affordable at the time.
I learned as much as I could about creating plots — or creating 108GB files that store the hashes used for challenges — as fast as possible. I eventually won a few blocks, resulting in a small amount of Chia coins in my account. The more I won, the more I wanted to grow my “farm” size by adding more storage and filling those up with even more plots.
But here’s the problem: Tens of thousands of other crypto miners had the same thought. And so, storage prices started to go up as the supply went down. The 12TB EasyStore drive I bought from Best Buy early on went from regularly available for $219 to out of stock. It’s now priced at $339 but is currently down to as low as $309. That’s still too high of a cost per terabyte (at $25.75) for what I want to invest (which is ideally under $20 per terabyte).
When trying to figure out how long the shortage and the price increases would last, I reached out to a few storage vendors to get their take on Chia and the impact it was having.
Larry O’Connor CEO at Other World Computing (OWC) took a few minutes to reply about how he and his company views Chia and the impact it’s had on not only OWC but the storage industry as a whole. O’Connor confirmed what I already knew: “The impact on hard drive supply and cost has been substantial.”
At the time when we spoke in mid-May, Chia’s network space was 6EiB — that’s Exbibytes — but as of July 8, it’s hovering at 30EiB.
The start of the Chia network growth came at almost the same time as Amazon’s $300-million purchase of high-capacity drives, according to O’Connor. A purchase that was going to “impede supply for 10 weeks to 14 weeks.”
Another aspect of Chia is that it wears out consumer-grade SSDs during the plot creation process, with each standard K32 plot writing up to 1.8TB of data to an SSD. Because of this, OWC and other SSD vendors have had to change their warranty and refund policies to prevent someone from buying a new SSD, burning through it from plotting Chia, and then requesting a warranty exchange to replace it, according to O’Connor.
As for the return to normal, O’Connor told me OWC was hoping that hard drive pricing and…