It is essentially clear that Chia currency mining presents its own challenges, although it consumes less energy compared to Bitcoin.
Chia Coin, the sensational blockchain protocol touted as a greener alternative to energy-intensive Bitcoin (BTC), has seen the price of its token, the XCH, drop along with continued market correction. The currency was opened for trading on Huobi Global earlier this month, with its price soaring above $1,350. However, the price has dropped from that level to a new low.
At time of writing, the price of each XCH coin is pegged at $757.88, down 8.35% in the last 24 hours, according to data from CoinMarketCap. The supposedly green cryptocurrency is trying to retest the $800 resistance point after deviating from a high of $931.89 to a low of $614.00 in the 7-day period.
In addition to slipping in correlation with the broader market, XCH’s price is falling as concerns about its sustainability become pervasive.
XCH Price Drop: Reaction to Inherent Hard Drive Damage
It is essentially clear that Chia coin mining presents its own challenges, although it consumes less energy compared to Bitcoin as it is based on the proof of bet (PoS) model. Gene Hoffman, the president of Chia Network, the company behind the cryptocurrency, admits that the product “kind of destroyed the short-term supply chain”, however he believes this is not serious enough to become an environmental drain.
Recently, ESG concerns of cryptocurrency projects have been brought to the fore, thanks in part to the role played by Elon Musk, the CEO of electric automaker Tesla Inc (NASDAQ: TSLA), in criticizing Bitcoin’s energy use. Investors bowed to these situations as Chinese regulators also revealed plans to tighten up on Bitcoin miners.
While Chia has received raves from investors in general for its model, which uses enough storage space to extract its coins, the cryptocurrency is relatively new for data for its energy usage to be collected. However, Hoffman said that if all the hard drives and corresponding storage were used in XCH mining, the network would still use less than 1 percent of the energy currently used by bitcoin.
“I’m sure if we had all 7 zettabytes of storage [o valor estimado para a capacidade global do disco rígido], every available storage space – you close Google, close Amazon, close Facebook – that would still be less annual energy consumption,” he said.
Hoffman also gave a rationale for supporting cryptocurrency in relation to damaged hard drives, saying that this problem is unique to cheaper storage devices. In the longer term, sustained damage could bring such concerns and could impact XCH coin mining, a development that could cause an even smaller price drop in the medium to long term.