Bitcoin, the first cryptocurrency, has a problem: It consumes terrible amounts of electricity and thus causes as much CO2 emissions as a medium-sized country. This is by design. A new cryptocurrency, chia, avoids this problem – in favor of generating huge amounts of another type of waste.
Bitcoin should be decentralized to evade any central control. The “Proof-of-Work-Mining” procedure awards new coins through a lottery. You enter this lottery by guessing numbers and doing calculations as quickly as possible – that is, you waste electricity to show your commitment. There is a winner every 10 minutes; The more people participate in the lottery, the harder it becomes to stick to a winner every 10 minutes.
Bitcoin, the first cryptocurrency, has a problem: It consumes terrible amounts of electricity and thus causes as much CO2 emissions as a medium-sized country. This is by design. A new cryptocurrency, chia, avoids this problem – in favor of generating huge amounts of another type of waste.
Bitcoin should be decentralized to evade any central control. The “Proof-of-Work-Mining” procedure awards new coins through a lottery. You enter this lottery by guessing numbers and doing calculations as quickly as possible – that is, you waste electricity to show your commitment. There is a winner every 10 minutes; The more people participate in the lottery, the harder it becomes to stick to a winner every 10 minutes.
As long as people can make money wasting electricity, they will add more computer resources to win more bitcoins in an ever escalating arms race. So Bitcoin uses as much electricity as the Netherlands.
Proof of Work has economies of scale: the bigger you are, the more efficiently you can create lottery tickets. Despite the grandiose claims of putting financial power in the hands of the public, Bitcoin mining was functionally centralized by 2014. Most of Bitcoin mining is made up of three large pools. A power outage in a small area of Xinjiang in April 2021 took a quarter of all Bitcoin mining offline. Bitcoin mining also uses specialized computers that only compute cryptographic hashes as quickly as possible; Once the mining computers are out of date, they’re just e-waste.
Other cryptocurrencies are similarly wasteful. 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 can largely be exchanged for real money. Cryptos failed as usable currenciesso their only remaining use case is to be traded in hopes of real money.
Bram Cohen is known as the creator of the hugely popular BitTorrent file distribution protocol. Cohen turned his attention to the proof-of-work issue. He specifically wanted a “green bitcoin,” so Chia, which was founded by Cohen, works very similarly to Bitcoin, except for the proof of work. Chias Business white paper advocates the same Conspiracy theory economy adopted by the Bitcoin subculture: It assumes that governments cannot be trusted to spend money in principle, and wasting a country’s electricity value is a better alternative.
The resource Cohen chose for his so-called green cryptocurrency Chia was computer hard drive storage. This is a generic, reusable form of computer hardware, it’s widely used and he thought it would use less power than a proof of work. Cohen expected that casual users of Chia could be using “the unused memory of your laptop, desktop or corporate network”.
In order to “farm” Chia, the software writes a “plot”, a large part of cryptographic data, on the hard drive. The Chia blockchain software sends a “challenge” about every 18 seconds, 4,608 times a day; If you have answered the challenge accurately enough, you will win two fresh chia tokens. The more space that is added to the network, the more difficult the challenges become.
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 business whitepaper assumes that hard drive space is “disproportionate”. However, aspiring chia farmers were buying hard drives in bulk, thousands of terabytes at a time – since they just had to spend less money than they expected.
During the COVID-19 pandemic, manufacturing supply chains were already disrupted in several industries, which led to bottlenecks in many basic components. In April, just a month after its introduction, chia farmers put a load on the hard drive market Reports from Hong Kong of large hard drives, over 4 terabytes, tripled in price. Hard drive shortages and price increases were reported everywhere South East Asia and in The United States.
The initial plotting of Chia is usually done on a solid state drive (SSD), such as you can find in a desktop or laptop. With normal use, a modern SSD will last over a decade; an SSD that Chia records can Burn out in less than six weeks. SSD manufacturers are now Refusal to meet guarantees on SSDs used for crypto mining. Used SSDs and hard drives manufactured since 2021 can no longer be viewed as burned-out wrecks. In Germany, the popular cloud service Hetzner has banned chia farming.
Instead of carbon dioxide, Chia produces huge amounts of e-waste – rare metals that are assembled into expensive computer components and turned into toxic, almost non-recyclable landfills within weeks. Cohen has tweeted that the claim that Chia destroys hard drives is mostly “just false” – although he ends the tweet thread by effectively admitting that it is true, but blames users for using “consumer SSD”, though Chia’s own FAQ conditions that it can run on cell phones or laptops.
Chia plotting is also a lot of electricity – plotting requires arbitrary calculations by a computer’s central processing unit (CPU), an intensive task. Chia’s business whitepaper assumes that farming is on “a Raspberry Pi” (a small computer about as powerful as a 2007 iPhone).
Chia failed in decentralization for the same reason that Bitcoin did: centralization is more efficient. The largest chia pool, HPool, wins 36 percent of the chia cultivation Rewards and Enhancement. Smaller chia farmers have complained that the chia network gave HPool a head start. The first 21 million Chia Coins have been pre-created and are held by Chia Network, pending being distributed by Chia Network in the event of an IPO.
Chia plunged headlong into the well-known psychology of cryptocurrency mining: People will do anything that makes a net profit – and damn the externalities.
The mining of cryptocurrencies has also destroyed the computer graphics card market. Bitcoin mining uses special chips that only Bitcoin can mine. but ethereum and many other “altcoins” that use proof of work are still mined on graphics cards as they are good for complex numerical calculations. With Bitcoin price in an economic bubble, so have other coins; As a result, high-end graphics cards from Nvidia are next to not available, prices are skyrocketing and the cards are being snapped up as quickly as possible. The latest Nvidia cards have resorted to drivers – the software that runs the hardware – the Detect and block cryptocurrency mining. And as with hard drives, you can’t trust used graphics cards that they are not burned-out wrecks.
Almost any service that can do general calculations is instantly swarmed by parasitic crypto miners. Continuous Integration (CI) systems take the source code of computer programs and recreate it after each change in order to enable quick testing of all changes. Some public CI services used to offer a free tier for small projects – but crypto miners started spamming these services with CPU-based crypto mining. A CI service technician said: “For example, if we had a 20-strong team working on our CI offering, we would have deployed at least 50% of them full-time to fight miners. And this trend is not slowing down, it is only accelerating. “
The decentralization of cryptocurrencies is a performative waste of resources in order to avoid having to trust a government to issue currencies. However, since cryptocurrencies don’t actually act as currencies, only new types of otherwise worthless magic beans are generated that can be sold for real money. Your system will waste an unlimited number of resources that you throw away – and create incentives for stealing resources that other people can waste to make money.
Cryptocurrencies spew out a country’s carbon dioxide and mountains of toxic e-waste, rendering basic computer hardware unavailable that could be used for productive purposes, and destroying any kind of commons that anyone would want to offer the world if general calculations could be done on it. Decentralized cryptocurrencies are a cyberpunk parody of unregulated capitalism. By their very nature, they are a catastrophic drain on the world’s resources. The designers are only looking for new resources to abuse. The only functional purpose of decentralized cryptocurrencies is to provide the idiosyncratic Bitcoin economic ideas that don’t work hoping to make money speculating. Every cryptocurrency is a new form of waste – and the only way to stop it is to stop cryptocurrencies.
