So-called green Chia cryptocurrency is just another way to waste resources
An expert’s point of view on a current event.
May 23, 2021, 6:00 AM
Bitcoin, the first cryptocurrency, has a problem: it uses appalling amounts of electricity and thus generates as many carbon emissions as a medium-sized country. It’s by design. A new cryptocurrency, Chia, avoids this problem – in favor of creating huge amounts of another kind of waste.
Bitcoin was supposed to be decentralized in order to stay out of central control. The “proof of work extraction” process allocates fresh coins through a lottery. You enter this lottery by guessing numbers and performing calculations on them as fast as possible i.e. you are wasting electricity to show your commitment. There is a winner every 10 minutes; As more and more people join the lottery, it is harder to guess a winner every 10 minutes.
As long as people can make money by wasting electricity, they will add more computing resources to earn more bitcoin in an ever-growing arms race. Bitcoin therefore uses as much electricity as in the Netherlands.
Proof of work allows for economies of scale: the taller you are, the more efficiently you can create lottery tickets. Despite grandiose claims to put financial power in the hands of the public, bitcoin mining has functionally centralized by 2014. The majority of bitcoin mining is made up of three large pools. A power failure in a small region of Xinjiang in April 2021, a quarter of bitcoin mining went offline. Bitcoin mining also uses specialized computers that simply calculate cryptographic hashes as quickly as possible; once mining computers are obsolete, they are just electronic waste.
Other cryptocurrencies are a waste as well. Ethereum uses as much electricity as Peru. There are smaller cryptocurrencies that don’t use this process, but Bitcoin and Ethereum are the two cryptos that are widely traded for real money. Cryptos failed as usable currencies, so their only remaining use case is to trade in the hope of real money.
Bram Cohen is known to be the creator of the very popular BitTorrent file distribution protocol. Cohen turned his attention to the problem of proof of work. He explicitly wanted a “green bitcoin,” so Chia, founded by Cohen, works very well like Bitcoin outside of proof of work. Chia’s professional white paper advocates the same conspiracy theory economics this has been embraced by the Bitcoin subculture: it assumes that governments fundamentally cannot be trusted to issue money and that wasting a country’s electricity is a better alternative.
The resource Cohen chose to use for his so-called green cryptocurrency, Chia, was computer hard drive space. This is a generic, reusable form of computer hardware, widely available, and he believed it would consume less electricity than proof of work. Cohen anticipated that casual Chia users might use “unused storage from your laptop, desktop, or corporate network.”
To “cultivate” the chia, the software writes a “plot,” a large chunk of cryptographic data, to the disk. The Chia blockchain software broadcasts a “challenge” every 18 seconds or so, 4,608 times a day; if you have an answer close enough to the challenge, you earn two fresh chia tokens. As more disk space is added to the network, the challenges become more complicated.
Cohen’s company, Chia Network, has been secured venture capital financing in 2018 and developed the Chia software. The network was launched in March 2021, with the promise users could run it in a “normal apartment”. Chia’s white paper assumes that hard drive space is “over-provisioned.” However, aspiring chia growers bought hard drives in large quantities, thousands of terabytes at a time, because they only had to spend less money than expected.
During the COVID-19 pandemic, manufacturing supply chains have already been disrupted in several industries, leading to shortages of many basic components. In April, just a month after its launch, chia producers were straining the hard drive market, with Hong Kong reports large disks, more than 4 terabytes, having tripled in price. Hard drive shortages and price hikes have been reported South East Asia and in United States.
Chia’s initial tracing process is usually done on an solid-state drive (SSD), just like you would find in a desktop or laptop computer. Under normal use, a modern SSD will last over a decade; an SSD that traces chia can burn out in less than six weeks. SSD manufacturers are now refuse to honor guarantees on SSDs used for crypto mining. Second-hand SSDs and hard drives manufactured since 2021 can no longer be trusted to not be burnt wrecks. In Germany, the popular cloud service Hetzner has banned the cultivation of chia.
Instead of carbon dioxide, Chia produces large amounts of electronic waste – rare metals, assembled into expensive computer components, turned into a toxic landfill that is almost non-recyclable in a matter of weeks. Cohen has tweeted that the claim that Chia destroys disks is generally “just plain wrong” – although he ends the tweet by effectively admitting that it is true, but blames users for using “consumer SSD” , although Chia’s own FAQ States that it can be run on mobile phones or laptops.
Chia tracing is also heavy on electricity – tracing requires arbitrary calculations by the central processing unit (CPU) of a computing device, a task intensive. Chia’s white paper plans to grow on “a Raspberry Pi” (a small computer about as powerful as a 2007 iPhone) – but in practice, chia tracing requires multiple CPU threads running at almost 100 to hundred.
Chia failed decentralization for the same reason as Bitcoin: centralization is more efficient. Biggest Chia Pool, HPool, Wins 36 percent of chia breeding rewards and increasing. Small chia producers have complained that HPool got a head start by Chia Network. The first 21 million chia coins were created in advance and are held by Chia Network, in anticipation of being distributed in the event that Chia Network holds an initial public offering.
Chia ran headlong into the well-known psychology of cryptocurrency mining: People will do anything that generates a net profit – and curse externalities.
Cryptocurrency mining has also ravaged the computer video card market. Bitcoin mining uses specialized chips that can only mine Bitcoin; but ethereum and many other “altcoins” that use proof of work are still mined on video cards because they are well suited for complex digital computation. With the price of bitcoin in an economic asset bubble, other coins have also risen; High-end Nvidia video cards are therefore virtually unavailable, with prices skyrocketing and cards being purchased as quickly as possible. The latest Nvidia cards have used drivers – the software that runs the hardware – which detect and block cryptocurrency mining. And, just like with hard drives, you can’t believe that used video cards aren’t burnt wrecks.
Almost any service capable of performing general calculations is immediately invaded by parasitic crypto-miners. Continuous integration (CI) systems take the source code of the computer program and rebuild it after each change, to allow rapid testing of all changes. Some public CI services used to offer a free tier for small projects, but crypto miners have started spamming these services with processor-based crypto mining. A CI service engineer mentionned: “If we had, for example, a team of 20 people working on our CI offer, we would have reassigned at least 50% of them to work full time on the fight against minors. And this trend is not slowing down, it is only accelerating. “
Decentralizing cryptocurrency is a performative waste of resources in order to avoid having to trust a government to issue currency. But since cryptocurrencies don’t actually function like currencies, they just generate new types of otherwise worthless magic beans to sell for real money. Your system will waste unlimited amounts of any resources you throw away and encourage the theft of any resources other people may waste to turn them into money.
Cryptocurrency spits out a country’s value in carbon dioxide and mountains of toxic e-waste, makes basic hardware that could be used for productive purposes unavailable, and destroys all kinds of commons that someone could. wanting to offer the world if a general calculation could be done on it. Decentralized cryptocurrencies are a cyberpunk parody of unregulated capitalism. They are a disastrous resource drain on the world, by design. Designers are only looking for new resources to abuse. The only functional goal of decentralized cryptocurrencies is to Idiosyncratic bitcoin economic ideas that don’t work in the hope of making money from speculation. Every cryptocurrency is a new form of waste – and the only way to stop that is to stop cryptocurrencies.