Desperate Chia miners are scrambling to offload mountains of unwanted hard drives, after the so-called “green Bitcoin alternative” shed nearly 90% of its value in just three months.
Chia launched in May as the native token of BitTorrent inventor Bram Cohen’s Chia Network.
Its backers count big-name investors like Andreessen Horowitz, Breyer Capital, and serial entrepreneur-slash-social media guru Naval Ravikant.
The project promised an environmentally conscious alternative to Proof-of-Work cryptocurrencies like Bitcoin through its “Proof-of-Space and Time” consensus algorithm.
Rather than leveraging electricity-hungry mining rigs to validate transactions, Chia’s “farmers” just have to show they have free hard drive space.
Chia’s price soared 140% to over $1,600 shortly after its exchange listings, amid a blaze of eco-friendly hype.
Now, farmers who snapped up hard drives at vastly inflated prices are looking to sell them and pivot to mining other cryptocurrencies, noted VnExpress.
But selling Chia-tainted SSDs is not so easy. A Chia Facebook group with over 5,000 members has reportedly seen a slew of posts from miners shilling their unwanted hardware.
And with Chia currently sitting at just $219 — a near-90% drop from its May peak — sellers far outnumber buyers. So, former farmers are forced to drop asking prices by hundreds of dollars.
One Chia farmer from China’s Dong Nai province told VnExpress: “I am selling my hardware I bought three months ago for a loss.”
When they first took up Chia, a hard disk drive boasting six terabytes of storage could fetch as much as $286, a 60% increase on the book price.
However, they must now sell for the equivalent of $110 — a 62% loss.
“I haven’t found a buyer in the last three days. I might have to bring the price down to [$88] so I can switch to mining another coin,” they said.
While under normal use, a solid-state drive (SSD) will usually last around 10 years. Unfortunately, using spare hard drive space to generate Chia can reportedly burn through a perfectly good SSD in as little as two months.
This means sellers must be lucky enough to find exactly the right buyer.
A computer service company spokesperson from Ho Chi Minh City told reporters: “Most of these hard drives are used for security cameras, while others are sold to gamers if prices are reasonable.”
“Some individuals buy in bulk and renew them as new to sell domestically or export to China.”
Few Chia miners make money
Not only are Chia’s eco-friendly claims hotly disputed, but the VC-funded project has blundered into a number of PR gaffs that have done nothing to help its image.
Chia Network Inc. argued readers could be confused into thinking it was an official outlet.
This prompted the blog’s owner Chris Dupres to point out that while Chia was attacking him for using a trademark belonging to somebody else, the company had done exactly the same on social media.
“Because of the consistent drop in price, it’s clear there aren’t a lot of new people joining the Chia ecosystem, it’s mostly just people who are already committed,” Dupres told Protos (our emphasis).
“Most of them give the impression that they do not care, but it is obvious from both traffic statistics, as well as social media activity, that interest is WAY down.”
Dupres explained that once someone has built a farm of hard disks to mine Chia — which comes with up front costs — there isn’t much incentive to shut down.
There are some ongoing VC-backed contests and grant programs to fund ecosystem applications, which is propping up the community to some degree, said Dupres.
“But it’s all VC money. I don’t think anyone involved in Chia right now is making any money beyond a few people who piled up a bunch right at the start — and it’s beginning to become obvious to people.”
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