Market capitalization: $270 million (*as of Jan. 3)
Chia has seen a stunning launch on crypto exchanges this year, raising hopes of being the next bitcoin but only stabilizing at 10% of that price within a month.
In an innovative approach that avoids the energy-intensive mining that Bitcoin uses, Chia has decided to use available storage space on hard disks instead. This blockchain security mechanism was called Proof of Space and Time (PoST), which was hailed as being more environmentally friendly compared to using CPUs and GPUs.
But then we saw a demo explaining why we couldn’t get enough of nice things, when Chia’s experience expanded beyond just using the current available storage. Chia farmers wrote “plots” to mine chia coin on a large scale by purchasing all hard drives available in the market.
They hoped that the drives would pay for themselves from future crypto profits. This tripled the prices of a few HDDs and SSDs, putting them out of reach for home users. This practice by Chia growers has led to brands reducing warranties on SSDs – which are usually known to have a longer lifespan than hard drives.
In the end, while Chia was a good proof of concept, there weren’t many use cases for it, speculation plummeted and the price of Chia coins plummeted. However, we may go back and look at Chia in a few years, just as we look back at the early days of bitcoin mining today.