What is happening with the project now and should we expect a multiple return on investment from it?
On July 12, BitTorrent founder and developer of Chia Coin cryptocurrency Bram Cohen announced plans to launch his own decentralized exchange, as well as other DeFi products in the Chia ecosystem. And in May, Chia Network President and COO Gene Hoffman announced an initial public offering (IPO) before the end of this year.
On May 15, the token reached an all-time high at around $ 1.64 thousand. On July 13, the digital coin is trading at $ 239. Chia Coin has dropped 85% since mid-May. According to CoinGecko, the token capitalization is $ 269 million.
What is Chia Coin
Chia Coin is a Chia Network blockchain token that was created by BitTorrent founder Bram Cohen. He believes that Bitcoin and other Proof-of-Work (PoW) cryptocurrencies are using too much electricity. Therefore, Chia runs on a 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 this.
The surge in interest in Chia Coin occurred in mid-April this year, as indicated by Google Trends data. Probably, users were attracted by the unusual way of obtaining a token. To earn Chia Coin, not computing power is used, but disk space. This way, anyone with free hard disk space can start mining the coin.
The popularity of Chia Coin led to Hong Kong experiencing a shortage of hard disk drives (HDDs) and solid state drives (SSDs) in April. Due to the increased demand for devices, their average cost has tripled. In April, Chia Coin was not listed on any of the exchanges. In July, the digital coin is traded against the stablecoin Tether (USDT) on Huobi, Gate.io, OKEx, BKEX and XT.com.
Chia mining profitability
Chia Coin is mined by renting out disk space, so before starting mining, you need to purchase a hard disk drive (HDD). Based on data from Yandex.Market, the average cost of a 4TB hard drive is 10,000 rubles. According to Chia's official profitability calculator , a 4TB hard drive could generate $ 0.26 per day. Monthly earnings will be $ 7.81 (577 rubles, taking into account the current exchange rate as of July 13). Thus, the hard drive will pay off in 18 months.
The average price of a 10 TB hard drive is 35 thousand rubles. Using such a device for mining Chia Coin will bring in $ 0.64 daily. The weekly profitability will amount to $ 19.52 (1.44 thousand rubles). Based on calculations, a 10 TB hard drive will pay off in 24 months and one week.
Should you start mining Chia Coin?
The last car for mining Chia left in the spring, says Nikita Soshnikov, director of the cryptocurrency exchange service Alfacash. According to him, this does not mean that the mining of Chia Coin has become deeply unprofitable, however, profitability has significantly decreased due to the attraction of a large number of miners, an increase in equipment prices, as well as a fall in the rate, which is associated with the completion of the hype around the coin and with the general correction of the crypto market. … Because of this, in the coming months, it is hardly worth expecting a multiple return on investment, Soshnikov added.
“The coin was promoted with the help of hype and received a fairly wide and decentralized network of miners, which was required for the development of this blockchain project,” the expert noted.
The technology used by the Chia Network blockchain is not new, explained the co-founder of the EXMO crypto exchange Eduard Bark. In his opinion, the reason why the project gained great popularity at the initial stage of development is the team and the famous founder.
“The information noise was also too positive – expectations were overestimated, successes were exaggerated. We do not recommend jumping into the last car of a departing train, ”Bark said.