How bad is Chia going to get?

For those less interested in hard drive prices Chia is a newish cryptocurrency that is mined on hard drives. Similar to the old burst coin.

Given what traditional cryptocurrency did to GPUs the question is what is it going to do to hard drive prices. Exact numbers are impossible since they depend on the ongoing price of Chia and behaviour of the miners.

Headline figure is that at current prices Chia can be expected to use about 100 Exabytes of storage over the next year or about 10% of annual hard drive production. At current prices its going to get pretty bad. I can’t predict how bad but I really doubt there is anywhere close to 10% slack in the hard drive production market.

That figure does ignore the cost of electricity which would take us to about 95 Exabytes and more significantly ignores the fact that that much buying would case the price of storage to rise (but I have no way to calculate that).

The calculation

The calculation is based on the fact that chia mints 9216 new coins per day (in pairs for some reason). Current price is ~$600 per coin. Resulting in $5529600 total per day or $2.019 billion per year. A year seems a reasonable upper limit for miners to get a return on their initial investment (hard drives don’t hold their second hand value well). Prior to Chia storage was around the $20 per TB mark and at that price $2.019 billion pays for around 100 Exabytes.

Electricity for storage appears to be in the region of 10kWh per TB per year at a price of $0.12 per kWh that bumps the price of storage up to $21.2 per TB which reduces the amount to 95 Exabytes. The impact of the cost of motherboards, NVMe drives to write to the drives and land to store the whole thing is beyond my ability to estimate.

If instead of looking for return of initial costs in under 1 year miners focus purely on electricity costs then Chia maxes out around 1.6 Zettabyte (higher depending on the price of electricity and the amount stolen). Global annual hard drive production is only around 1 Zettabyte.

Current growth rate

According to this chart Chia is currently taking about a day to add 500 Pebibyte. In units we are more use to that amounts to 562950 terabytes or nearly two wikimedia commons. At that rate we will be reaching the 100 Exabyte mark in around 180 days.

How much it needs to fall not to be a problem?

Using the above calculation $64 per coin would result in a 10 Exabyte pool or about 1% of global hard drive production which might not be too bad.

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