Chia Coin: Will SSD storage become unaffordable in the future?

A new type of cryptocurrency called Chia can be mined using storage instead of processing power. This could lead to an enormous shortage and price explosions in the SSD and HDD market. Interested parties are therefore well advised not to put off investments in the server area.

Cryptocurrencies are currently a hit among investors and miners . The latter use as much computing power as possible to “farm” coveted cryptocurrencies such as Bitcoin or Ethereum. From a hardware point of view, this affects the GPU market in particular: graphics cards – whether for private or professional users – are almost not available and if they are, then only at horrendous prices that are far above the RRP. NVIDIA and AMD recently announced that the Chip shortage won’t change anything soon.

The Chia mainnet is live

A very similar fate could now befall the market for HDD and especially SSD storage. With the so-called Chia Coin (XCH), a new cryptocurrency is now entering the ring that is taking a completely different approach. Instead of a “Proof of Work”, in which the pure computing power determines who mines a block (so-called mining), Chia relies on a “Proof of Space and Time”. In plain language, this means: The more free storage a user makes available to the crypto network, the higher his chance of a reward in the form of the coveted Chia coins.

Consequences for the storage market

This new principle from Chia has the decisive advantage over conventional mining methods that the network requires significantly less energy. On the other hand, the demand for SSD and HDD hard drives is increasing at the same time. The first Reports from China find that prices there are already rising rapidly. Our suppliers are also noticing a noticeable increase in demand for storage. While more than 900 Enterprise SSDs, which we mainly use in our centron data center, were still in stock last Monday, they were already completely sold out on Wednesday.

If this trend continues, it could become a real problem for the server market. Like all managed service providers and data center operators, we sometimes calculate our end customer prices on the basis of purchase prices. If these increase due to rapidly increasing demand, sooner or later we will also be forced to adjust our prices.

Start investing now

Our tip: If you are planning investments in the (managed) server area, you should seriously consider tackling them immediately. If the price of the storage market continues to develop as it has so far, we are heading towards a bottleneck – and in three months you may already have to spend twice as much for high-performance enterprise SSD storage. Our IT consultants will be happy to advise you on our products and services.

Why is chia so popular?

The Chia coin is currently not listed on any crypto exchange worldwide – so the price per unit is still unknown. But why then the hype about the new cryptocurrency? On the one hand, this is due to the new model of being able to mine with storage coins. Because for many, getting into classic coin mining is simply no longer worthwhile due to the high GPU prices. On the other hand, Bram Cohen, who, among other things, founded the file-sharing platform BitTorrent, is a real internet heavyweight behind the project. By 2020, his startup had already raised $16 million in investments. All of these factors speak for the success of Chia – and could lead us straight into a storage bottleneck. Will this make it unaffordable in the future?