New cryptocurrency could lead to a shortage of hard drives
ChiaCoin was invented by BitTorrent creator Bram Cohen. Unlike traditional cryptocurrency mining algorithms that rely heavily on GPUs or ASIC chips, ChiaCoin relies on solid-state and hard disks.
Bram Cohen believes that other cryptocurrencies operating on the algorithm Proof-of-Work (PoW) uses too much electricity, writes RBC.
Chia runs on the Proof-of-Space-and-Time algorithm and uses disk space as a transaction validator. Users who provide their own disk space to support the network are rewarded for doing so.
The process itself is called farming, not mining, because the principle of mining is different: the more data the user can place in his farm, and the faster access to it, the higher his chance of getting a reward.
At the moment Chia Network is in the beta testing phase, and the ChiaCoin blockchain coin is not yet traded on any exchange.
However, users in China have already begun to buy hard drives and SDD drives en masse for the future, with 4 to 18 terabytes of drives being especially popular.
Given the concentration of production in China, the shortage of drives will first affect the domestic market and then spill over to the foreign market.