Chia’s “marketing” style pervades the community

In various crypto communities, Chia has screened the circle of friends.

Chia was founded in 2017 by the former BitTorrent founder Bram Cohen. The core team members also include Gene Hoffman, the former founder and CEO of eMusic.com and Vindicia, and Mitch Edwards, the former acting CEO of Overstock.com. The founding team lineup is quite recognized and respected by the market. From 2018 to 2020, Wall Street institutions such as A16Z, Danhua Capital, and DCM Ventures invested in Chia. The team’s financing situation is relatively optimistic, and the luxurious investment lineup has become Chia’s second advantage. On March 18 this year, Chia Network officially released the Chia1.0 mainnet and started mining. Both belong to the distributed storage track, and in Chia-related mining machine promotion, it is indispensable to benchmark with Filecoin. And most of the general perception of Chia in the market is: if you miss the best time for Filecoin to enter the market, Chia is currently very likely to be the early stage of the next Filcoin, and its appearance seems to be at the right time. Since the end of March, Chia has been swiftly blowing a strong “marketing” wind in the Chinese community. When Fomo’s emotions were on the rise, more and more people issued risk warnings to the explosive Chia and various dazzling Chia miners.

警惕 Chia 矿机早期「智商税」

  

Chia: An affordable alternative to Filecoin?

The market was the first to affirm Chia’s founding team and luxurious investment lineup. In September 2019, Coinbase published a content that showed 17 unlaunched projects that intend to go online, including Chia. This gives some speculators higher expectations for Chia’s landing on Coinbase. Compared with Chia’s high expectations in the context of “luxury”, its technical route and development prospects actually require more time for testing and further observation of the market. According to official information, Chia promotes the concept of environmental protection, hoping to reduce the energy consumption of “mining” while ensuring safety, so the concept of mining has been changed to “Farming”. Blocklike compiled multiple channels and official information, and summarized the main ideas proposed by Chia:

1. Enterprise-level currency: sell software services to governments, financial institutions, enterprises, and large storage buyers and sellers, support open source blockchain, and intelligent transaction software. 2. Promote the development of DeFi, DEX, and cross-border payment. 3. Allow individuals, financial institutions, companies, and governments to issue assets on the chain. These assets inherit the smart transaction capabilities of the Chia Network blockchain and rely on the global decentralized security verification provided by the time-space proof. 4. Solve the problem that mining consumes a lot of resources: reduce the negative effects and impacts of Asic, computing power, and power consumption.

It’s worth noting that Chia uses “Proof of Space and Time” (PoST). This unique method of proof is different from BTC and ETH using Proof of Work (POW). It also uses “Proof of Space and Time” in Filecoin. “different. Time and space prove that PoST can use the remaining storage space in storage devices (computers, servers, NAS, Raspberry Pi, etc.) for mining. What Chia mining requires is not computing power, but storage space. This means that when mining Chia, the larger the hard disk space, the higher the efficiency. From the perspective of mining, Chia can be regarded as a type of POC mining. Chia and Filecoin belong to the storage track, and indeed have many familiarities with Filecoin mining. An industry practitioner and a Filecoin miner manufacturer analyzed in an interview with Blocklike that according to his observation, the technical threshold of Chia’s entire project is extremely low, and the equipment required is much lower than that of Filecoin. In direct comparison with the Filecoin mining machine, the Chia mining machine has very low configuration such as computing power machine and storage machine. According to Chia’s economic model, Chia does not need to be maintained during farming, and there is no penalty setting for participants to lose computing power, and there is no need to mortgage coins. If investors want to participate in mining, they only need to configure simple equipment and download the mining applet on the official website. “Compared to Filecoin, the threshold for Chia mining has been reduced almost by the greatest extent.” He believes that such a low threshold is also one of the main reasons why many investors are rushing to enter. POC mining is one of its innovative methods, but it has almost become an industry that everyone can enter. At present, admission is not a good choice. “At present, on the Chia mainnet, users can participate in planting by contributing idle hard disk space. However, the transfer function of the entire network has not yet been opened. At present, the only way to obtain Chia token XCH is to “plant” by contributing hard disk space, which directly led to investors’ eager purchase and the crazy increase in the price of Chia mining machines.  

  1. The Chia mining machine is “harvesting”?

The Chia project is still in its early stages, and the price of mining machines has already “taken off” ahead of schedule. Blocklike learned from mining machine manufacturers that the production of normal distributed storage mining machines will mainly go through the following stages:

(1) The official recommended configuration version (2) Enter the optimization stage: modify the code to update the configuration (3) Upgrade and iteration of the mining machine

Judging from the currently officially announced standard version configuration, if the mining machine manufacturer assembles the computing power machine, storage machine and related accessories enough, it can be assembled and tested the code in about 3 days. After that, professional mining machine manufacturers will set aside about 7-10 days for data testing and make a feasibility report. At this stage, mining machine manufacturers usually carry out code optimization and upgrade configuration to improve the competitiveness of mining machines. But for Chia mining machines, due to the rapid increase in prices of hard drives in the industry, many professional mining machine manufacturers choose to wait and see. According to the introduction of the mining machine manufacturers, the major manufacturers usually refer to the hardware price for quotation reference. In late March, the hard disk price of Chia mining machines generally cost about 160-170 yuan per TiB, and the price of 1 TiB of Chia mining machines in the early days was mostly around 200 yuan. Up to now, due to the general increase in the prices of computing power machines, storage machines, and hard drives, the price of 1 TiB of many Chia mining machines has been pushed up to around 600-700 yuan.

“Now storage machines are out of stock, and manufacturers can’t buy them,” said the miner manufacturer. According to Blocklike’s knowledge, from the perspective of mining machine inventory, the current scarcity of mining machines is not due to insufficient output, but mainly because upstream suppliers are reluctant to sell. According to public data, the total shipment of solid-state drives in 2020 will be 330 million, and the total storage capacity will be 27 EB. The total shipment volume of mechanical hard disks was 259 million, of which Seagate, the world’s largest manufacturer of hard disks, disks and read-write heads, shipped 110 million, with a total storage capacity of 1018 EB. In the current market, a large number of distributors and agents upstream of mining machines have participated in the hype of hard drives, facing the active miners group in the form of starvation marketing. It is reported that in the last week alone, the cost of computing power and storage equipment continued to rise, and the price of hard disks rose more than 3-4 times. At the same time, the price of hard disks fluctuated drastically, and the instability of prices increased. In this case, some mining machine manufacturers believe that the current time is not a wise time to intervene in the Chia mining machine. For investors, most investors who have missed Filecoin investment opportunities bet their hopes on the Chia mining machine. In the mixed Chia mining machine market, some of the Chia mining machines sold by unscrupulous merchants at high prices may be just ordinary computer motherboards and hard drives that have downloaded the official “planting” program. The technical content of this type of mining machine is almost zero. The price has risen along with marketing methods. How to rationally judge the Chia mining machine configuration and reasonable price range?

警惕 Chia 矿机早期「智商税」

(Chiaexplorer data shows that the theoretical “planting” reward of 1 TiB has dropped from 0.03 at the beginning of the month to 0.019 XCH)

The above-mentioned mining machine manufacturers mentioned that investors are advised to refer to the three data dimensions of “single TiB cost”, “single TiB coin production”, and “current OTC real transaction price” when investing in Chia mining machines. And combined with their own expectations and judgments about the future market situation, make a choice. “For the early investors of Chia mining equipment in late March, referring to the current OTC price, the return period may be only a dozen days. But for current investors, the return period has been lengthened. The computing power that was snapped up in the market before will be delivered in a centralized manner next month, which is equivalent to the return cycle being lengthened again.”  

Chia’s next step: waiting for the approval of the head agency

Regarding the Chia project, the other side of the discussion began to sound, and the innovation and sustainability of the Chia project were questioned. This part of the view believes that the concept of “green bitcoin” is not Chia’s original concept. At present, it can be seen from the operation of a large number of Chia mining machines that Chia miners will still invest a large number of mining machines and resources into “planting”. Driven by the maximization of profits, the actual power consumption of the mining machines is not too great. Big difference.

On the other hand, the POC track has again been discussed by the market.

The POC (Proof of Capacity) consensus has been proposed for more than 6 years. This PoC project is mainly against Bitcoin, with energy saving, more decentralized and fairer mining as its core competitiveness. In the field of distributed storage, Chia is regarded as a typical “currency project that uses hard disk space as a proof of computing power for mining and benchmarks against Bitcoin.” Due to the low threshold for participation in this model, the influx of large-scale funds is conducive to increasing the popularity of the project. However, until now, the development of the POC track has not been satisfactory, and there has not yet been a typical project case with strong sustainability. Although the popularity and flow of Chia mining machines are expanding, the industry’s leading capital, exchanges, and media have not formally voiced the project, and relatively branded institutions are relatively conservative in Chia’s computing power promotion and can accept Chia transactions. The platform is still dominated by copycat exchanges. In the long history of the development of mining coins, the game of decentralization and the centralization of mining pool tyrants is still advancing in controversy. Whether Chia can realize its vision still needs time to test. However, the current mining machine market is mixed, and the Chia project is undoubtedly at a very early stage. A more rational view is that ordinary investors still need to observe the degree of recognition of the project by mainstream exchanges and mainstream institutions.