Bad future scenario for small farmers

General Chia Discussion
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Ok, which game we’re playing actually?

Let’s explain with a simple example:
For the sake of simplicity, let’s consider we have only 10 farmers, with 1 TB each of Plot (10 plot). Let’s say everyone spent 1k dollars to buy that storage.
Let’s even consider that if you sell 1 XCH, you can earn 1k dollars back.

Let’s say the total amount of reward each day is 100 XCH, so by the end of day, everyone get 10 XCH each (in a statistically perfect world), because everyone share 10% of the Netspace. So, everyone earn 10k dollars per day.

Maybe 9 out of 10 farmers are very happy with that (who not?), they spent 1k dollars to have 10k back every day… it’s a wonderful thing… but suddenly one of them think: “wait, if i buy 2k dollars in more storage, i can hit 3TB of storage, and i will own 25% of the total Netspace (3TB/12TB). I can get now 25XCH per day, and i will earn 25k dollars per day!!! ”

Here’s where the things get complicated because one of them get the 25% of the reward, but the other that would be happy with just 10k dollars per day, now they gain only(!?!) 8,3333k$ per day (poor guys) for sharing 8.3333% of the Netspace (1TB/12TB) and they say:
-“wait, where are gone my 10k??”
-“don’t you know? A guy in the netspace bought other 2TB of space and then the system reward him more”
-“damn mate, that’s not fair… why don’t we buy it too?”
-“you are right… i think i will buy 10TB with my last day earnings… you should it too, so we can earn the same amount.”
-“nice idea mate! ggwp”.

At this point you can realize by yourself where my example want to go… at some point, to earn and mantain the same amount of 10k per day, everyone in the Netspace have to regularly spent in storage, because it’s impossible to speak with each other and tell them to stop buy storage or you will ruin the balance of this well thought system. So if i don’t want to lose my 10k per day, and i don’t want to waste all my previously investment, i can’t stop buy HDD, or at a certain point, i’ll be out of this game. It’s like a dog chasing it’s tail.

And the things get worse (like in the real scenario) if we consider the entry of other 1000 farmers with 1TB of space… you can’t even just buy 2-3 TB to remain in the game at this point.

What i want to say is, ok it’s nice to get some Chia at some point, but the things will deteriorate at the speed of light and sooner or later, you have to quit from the game, because you can’t mantain thousand of HDD.

Any other variable you think to set in this game, it will be only pejorative, even the price of a single XCH. If it raise, then the netspace will raise, and this will be always a zero sum game (at the best case).

i tried to partecipate at the beginning with a ridiculous 30TB of space, but i quickly get it that there are no chance to win for hobbist/little farmer, thus the project, for me, has failed. I even thinking that the chance of winning in the online calculator (or on the GUI) are inflated and 4 month to win, it’s not a mean case like maybe you can win in 1 month, or maybe you can win in 10 month… but it’s surely 10 month (at least, reading other experience) increasing every day.

Sorry for my english, but i hope you get the point.

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It’s clear. I will buy more HDDs :rofl:

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That is exactly why I am making the connection that they intentionally triggered a race for more and more storage, to fill that storage you burn nvme, but semiconductors are in short supply, so value of XCH actually becomes a direct function of semiconductor shortage. So when the semiconductors become more readily available, value of XCH will fall, indicating, that we are looking at the top prices XCH will ever get once semiconductors supply stabilises…

We re all hitting the market to use up all the used and the new readily available processing power fuelling a shortage which will become much worse as a result of this global phenomenon. Problem is that we will be out on a wild goose chase while those in real need for the equipment - those who can actually apply this to some practical use - will suffer. But to each his own, in reality, greed never pays, and karma has sharp fangs and shiny white teeth. I have a feeling I will regret the day I got suckered into this…but oh well, in for a penny…

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“The tragedy of the commons is an economics problem in which every individual has an incentive to consume a resource, but at the expense of every other individual – with no way to exclude anyone from consuming.”

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How is the scenario different from Bitcoin? I mined when you could use cpu to do so. Then it got to the point where you had to use GPUs. Now we have specific hardware.

I’m sure it will be same in a decade if chia takes off and you will need to buy specific hardware for plotting.

The main difference I see is that chia is broken up into plotting and farming. If I can plot 100k plots a day but have no storage, it’s useless. Same goes to the flip side, if I have petabytes of storage but can only do a few plots a day.

Unlike Bitcoin you also have the opportunity to sell your excess to others. Sell your plotting power or sell your storage.

The netspace will only every increase, similar to all other coins when talking about hashing power.

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Actually Chia was never written for farmers to drive the market up with their never ending demand for MOAR STORAGE ! It was written for the end user, with some disk space free and a few dozen plots - at ZERO cost.

Farmers, mass plotting, scale scale scale is for those who are trying to make an income from it … aaand that is a different game

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Once a plot passes the plot filter it then competes for the best proof of space with every other plot that also passed that plot filter for that signage point. For reasons that aren’t super simple to intuit, the only thing each plot is competing on is to have the best proof of space and thus the chances of getting a reward depend on total size of plots on the farm - even with the plot filter in place.

This explanation from their github FAQs begs to differ my friend…

(Although their marketing brief says “intend to use idle free space” - the protocol says, “Off to the races! Go! Go! Go!” - or if I am reading this wrong, please clarify…)

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I’m curious how ethereum avoided this phenomenon … it seems that it is (or was, until the crash) profitable to grind out ethereum using regular video cards. But as you say, mining bitcoing went from CPU, to GPU, to specialized ASICs.

I read Nvidia is adding anti-ethereum support to their BIOS and drivers:

Yeah, there’s two distinct events here.

  1. plotting, which requires fast CPUs with lots of cores and fast disks – can be NVMes, or can be done on arrays of HDDs, or high endurance enterprisey kind of SSDs

  2. farming, which requires only minimal CPU and lots of disk space

But even plotting is relatively low intensity relative to proof of work! It’s quite difficult to achieve 100% CPU utilization without a lot of complex system configuration.

Adding pooling is a kind of “reset” where people can catch up again, too.

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I’m sorry, not being a jerk, but TLDR. I’ve seen a lot of posts like this on all kinds of cryptos.

You should be mining crypto for whatever reason makes you happy, but if you are not mining crypto for a better future, freedom, privacy, … you won’t do it when it is not profitable.

People won’t loose $1/day mining an unprofitable coin, but would you pay $1/day to ensure freedom?

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Tbh, I have trouble accepting this story as simple ‘naivete’ , when there are people involved with the Chia project that aren’t exactly novices in crypto.

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Because the Etherium protocol was specifically designed (but ultimately still succumbed to) being ASIC resistant.

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Reality of May 2021 is that farming has had such exponentially diminishing returns that to not be grinded into oblivion it had to consume exponentially rising investments in plotting. It has become an iconic example of a decline of the commons driven by a red queen race.

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One thing is for sure, they didn’t predict netspace would grow so large, so fast. They were looking at filecoin and others for prior art. And Filecoin was at 5 EiB total.

Heh you said the same thing in a diff topic

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If we assume this is true shouldn’t there be a modification to contingency plan and recalibration of reward frequency to match the netspace even if by 1.5x to compensate evenly… I mean they got their freefarm secured but the rest fell prey to the fallacy of goldrush and hoarding phenomenon…

They intended the 4k or so chia to compensate 2EiB - hitting 8EiB in a shorter time frame, shouldn’t the yield be improved to maintain some consistency to their expected reward ratio - aren’t they claiming, boasting proactively pursuing stability. (stability requires of them to improve the supply of XCH in proportion to growing work - not allow for a shortage to drive the price up - very close to insider trading). 4 x expected growth demands prompt course correction, which I don’t see happening… Sadly so…

This is like a company whose dividends reduce in the proportion of increasing investors… I don’t see them doing so well on any stock exchange…I mean think about it, we are also potential buyers, if ever they get approved for listing - which mark my words THEY NEVER WILL, seeing their behaviour in regards to payout, I don’t think anyone of us is buying the stock…

THEIR LIES ARE COMPOUNDING!

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I’d love it if this were the case, but if that was it, they would have gone to some lengths to limit the maximum storage that any one user might allocate. Which would be very difficult to do practically as you could just have multiple keys.

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i will follow your scenario and put things in other perspective.

imagine that the guy that bough those extra TB and other 2/3 friends leave that pool and join other pool.

the capacity of that pool is reduced, so as the changes of win.
the profit per day will drop probably to $0

imo this can demonstrate that even with pools, the changes of not wining still higher than winning.

and with the quantity of pools around, people need to be aware that even if you join a poll you will NOT have fast profit, if the pool power is not enough they it will not win chia, and they will have none to distribute.

some pools will fail for sure, those who get more people in are the ones that will stand around.

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Having read a bit here and plotted a mere 4 plots so far, I intend to setup just a few old HDDs, with very little expense either initially or on an ongoing basis, just to see if I get lucky. The odds are super low of getting a coin by myself, but then its like paying a few £s a week to play the lottery, people who only ever buy 1 ticket can and do win, quite often, lotteries are not won by people who spend £1000s on tickets every week.
Pooling will make a difference, I’d throw my 2-4TB into a pool just to tick along, and earn a few % of a coin here and there, hoping Chia takes off as the more sustainble crypto.
Sadly this seems unlikely as everyone seems to be taking the “throw everything they can at it” approach which is possibly going to be its downfall.

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Pooling will help give some people a little more regular reward for a short while, but in no way will it stop the rapid decline in earnings if you cannot or will not keep adding to your plot total. In fact it is almost certain to make it worse as i have heard many people say they have stopped plotting until pooling so more more plots are coming…

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Of course, all the things i wrote here are just some prediction for the future and a super semplificated scenario… but i can’t see nothing that let me see that things can get any better…

With pooling the story will go further bad, because, even if you earn small and safe reward, all the people will do the same of you, and there is not any other direction for the Netspace: UP! there is even the chance that, someday, your 5 W/h HDD will consume more than you earn… and this is a breakpoint.

I like doing some math, and let’s imagine someone with 10TB in a pool, what earn today.
According with the calculator online, my estimate time of win is 7 month, thus 0.3 XCH earned per month. We didn’t know already the price of XCH where it will stabilize, but let’s assume that today is 900$, then your reward is 300 dollars per month (i rounded everything in excess).

If everyone of us, can earn 300 dollars per month (it’s stil a nice amount) then everyone in the world will come across to this game, and in how much time you think that things will deteriorate? Very soon… At the current ratio, in just one month you halves your earn, but i expect that when the pool will be established, the netspace will explode exponentially… but mine is only a prediction, i wish good luck to everyone

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