The recent growth in popularity of Chia Crypto and Filecoin mining has increased the demand for large storage solutions, creating shortages of drives in some countries. Chia and Filecoin use Proof of Capacity (PoC), an alternative to mining using Proof of Work (PoW) that provides a more environmentally friendly solution.
Chia and Filecoin designed their blockchains to PoC, a method that allows an individual to use their everyday computer with a standard hard drive to mine. Although intended as an Everyman mining solution, once the coins skyrocketed in value, users made a run on large capacity hard drives. Let’s look at why cryptocurrency miners became so excited about these crypto tokens that entire countries sold out of terabyte drives.
Chapter One: Proof of Work (PoW) Defined
Initially developed to thwart denial of service attacks and spam emails, Bitcoin inventor Satoshi Nakamoto used the Proof of Work technology as the method of maintaining network security and validating the veracity of blocks in the blockchain. In PoW, the miner’s computer solves a mathematical puzzle that requires significant computational power. For doing so, the miner receives a reward of payment of the token involved.
PoW places a drain on the user’s computer though. Validating a block requires more than 51 percent of the users’ computer power. In the beginning of Bitcoin, users could mine with a typical computer, but as time passed, the activity required a high-powered computer with an advanced graphics card called an ASICS. This activity requires significant electricity, and some environmental groups have criticized its carbon footprint.
Chapter Two: Proof of Stake (PoS) Defined
Proof of stake uses much less electricity since all you need to do is purchase a cryptocurrency, then stake it. Don’t confuse this with buy and hold. Staking goes a step further than buy and hold because the purchaser must commit the cryptocurrency for a specified amount of time. It’s similar to purchasing a certificate of deposit (CDs) from a bank. When you stake some cryptocurrencies, such as Cardano, you obtain validating power. The greater the amount of the token you purchase, the more validating power you own. You earn a reward for staking the coins, paid in more coins. You can stake as a delegator or validator. This typically requires different minimum amounts. It costs a bit more to become a validator, but you earn a higher rate of return. Delegators typically earn payouts in the form of interest, another similarity to CDs. This option significantly lowers the environmental costs of blockchain technologies by lowering the processing power required to validate transactions. It also lowers financial costs while making the speed of transactions more efficient.
Chapter Three: Proof of Space (PoSpace)/Proof of Capacity (PoC)
Proof of Space (PoSpace) or Proof of Capacity (PoC), as it also gets called, uses the leftover space on an individual miner’s hard drive. The user allocates the amount available for use in advance. This option only requires a large hard drive, and the miner can use a standard laptop and its built-in video graphics card.
Developed with the intention of providing an ecological way to mine, it uses fewer resources than Bitcoin’s PoW. As PoC tokens such as Filecoin and Chia Crypto took off, miners determined to maximize their earnings invested further in storage and cloud solutions. These growing platforms require expansive data centres.
Environmental Considerations of PoW vs. PoS vs. PoC
In sum, PoW incurs the most environmental damage when its mining or data storage operations take place in an area that only provides non-renewable energy sources. In areas that use solar, wind, biomass, or hydroelectric power plants, the carbon footprint of cryptocurrency mining lowers significantly. The requirements for the miner remain the same with the end-user needing an ASICS to conduct most mining operations.
PoS creates little carbon footprint and ensures that many cryptocurrency purchasers purchase and hold onto their investment. This helps create market stability.
PoC uses the available storage of everyday individuals and mining pools. This also creates a small carbon footprint. It ensures a greater number of people can participate in mining the crypto coins, and that means a greater number of people own the coins.
Finding the Right Storage
Of course, many people find the least expensive, most productive option attractive. Out of PoW, PoS, and PoC, PoC wins, since you can begin earning Chia or Filecoin without an extra expense. With PoS, you must purchase the coin to stake it. PoW requires special equipment costing about $1,000. PoC quickly became so popular in some locations that people burned out their hard drives.
Mining Chia requires a lot of hard drive space. It takes only 40 days of mining to completely fill a 512 GB solid-state drive (SSD). At this time, about 31 million terabytes of storage devoted to mining Chia exist. For clarification of the massive nature of those numbers, check this simple table of computer data storage sizes.
This has caused hard drive shortages in countries such as Vietnam as many individuals bought large hard drives in bulk. The size of the sold-out drives ranges from 4 TB to larger than 6 TB. Instead of using the drive available that they already own, enterprising miners created their own mini-data centres.
What is important is choosing the right storage for your purpose. Miners quickly determined that purchasing consumer-grade SSDs meant quickly burning through the drive. This created a new demand for enterprise-grade SSDs. Bitcoin Insider suggested that using cloud storage provides a more sensible solution for those wanting to create a mini-data storage solution or their own large-scale data centre, but it means buying something new when many people want to save money by using what they own.
Using Just a Bunch of Drives (JBOD) solution enables users to combine various physical hard drives of varied sizes. Users can easily combine, for example, users can easily build between 57.6 TB to 1.9 PB of storage space. Using a combination of hard drive and JBOD, such as Seagate’s Exos E JBOD, works well for capacity-intensive workloads, providing cost-efficient and space-maximizing options.
Leveraging JBOD is an ideal solution for those wanting to easily scale without an ongoing expense, such as cloud storage requires.