It is essentially clear that the mining of Chia coin comes with its own challenges, even though it takes less energy compared to Bitcoin as it is based on the Proof-of-Stake (PoS) model.
Chia Coin, the sensational blockchain protocol touted as a greener alternative to the energy-intensive Bitcoin (BTC) has seen the price of its token, the XCH drop in tandem with the ongoing market correction. The coin opened up for trading on the Huobi Global crypto exchange earlier in the month with its price shooting up above $1350, however, the price has slumped from that level to a new low.
At the time of writing, the price of each XCH coin is pegged at $757.88, down 8.35% in the past 24 hours according to data from CoinMarketCap. The supposedly green cryptocurrency is seeking to retest the $800 resistance point after veering from a high of $931.89 to a low of $614.00 in the trailing 7-day period.
Besides slipping in correlation with the broader market, XCH price is dipping as concerns about its sustainability become pervasive.
XCH Price Drop: Reaction to the Inherent Hard Disc Damage
It is essentially clear that the mining of Chia coin comes with its own challenges, even though it takes less energy compared to Bitcoin as it is based on the Proof-of-Stake (PoS) model. Gene Hoffman, the President of Chia Network, the company behind the cryptocurrency, admits that the product has “kind of destroyed the short-term supply chain”, however, he believes this is not grievous to become an environmental drain.
Of recent, the ESG concerns of cryptocurrency projects have been brought to the forefront, thanks in part to the role played by Elon Musk, the CEO of the electric automaker, Tesla Inc (NASDAQ: TSLA), in criticizing Bitcoin’s energy usage. Investors have buckled under these situations as Chinese regulators also unveiled plans to be stricter with Bitcoin miners.
While Chia has earned accolades from investors in general for its model which uses enough storage space to mine its coins, the cryptocurrency is relatively too new for data per its energy usage to be collated. However, Hoffman said that should all of the hard discs and the corresponding storages be utilized in mining XCH, the network would still use less than 1 percent of the energy currently used by bitcoin.
“I’m pretty sure that if we had all 7 zettabytes of storage [the estimated figure for global hard disc capacity], every piece of storage out there – you shut down Google, you shut down Amazon, you shut down Facebook – it’d still be less annual energy consumption,” He said.
Hoffman also gave a justification in support of the cryptocurrency in relation to damaged hard discs, saying this problem is only unique to the cheapest storage devices. In the long run, sustained damage can bring such concerns and may impact the XCH coin mining, a development that can cause an even downward plunge of the price in the mid to long term.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.