Is Chia about to crash?

Based on my own calculations, the current trajectory has everyone losing money unless one or more of the following happens:

  • Network size growth tops out soon - at current growth rate, it will be unprofitable to farm using even the cheapest storage currently available
  • XCH price goes up faster than network size grows

Of course, the most likely outcome may be that the network continues to grow far beyond profitability, leaving a lot of farmers with hard drives that they will never be able to pay for from farming profits. At that point, one would expect farmers to sell their equipment in order to cut their losses, potentially driving both network size and XCH price downwards - whether or not the network would ever recover from such a crash is anyone’s guess.

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Running the numbers:

Given a pre-plotted 8 TB hard drive it will cost $0.02 per day in electricity to run, hold ~80 plots, is worth $30 per TB today (high assumption), will last 5 years, and will have an expected daily return of ~0.016 xch with a netspace of 4 EiB (based on chia explorer).

That’s $16 per day at $1000 per chia at the current net space. The cost is electricity and depreciation of the hard drive over 5 years. That comes to $0.15 per day.

To become unprofitable netspace would have to grow 100x, or around 400 EiB. Even growing 1 EiB per day it would take a year to become unprofitable at this price.

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Five year ROI is kind of far fetched though.

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Well, with pooling and fractional awards of coins, things could get a bit better. But certainly nobody predicted the network would grow this much, this fast.

I’m bummed that you can’t pool with your existing plots.

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Yup, seems like this would have been the best way to counter what’s happening with hpool. I’ve only got around 6TB atm anyway, so re-plotting and actually earning something is going to be preferable to just farming these.

I guess deleting old plots 1 at a time while farming the new ones makes the most sense, so total capacity will never really go down.

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I am switching over ALL my ongoing plotting to the new format supporting pools ASAIC - I “only” have just over 1000 - i feel for you with … what was it … over 3000

Can’t come quick enough - i have limited HD storage so once i have filled them i can just overwrite and my “primary” SSD are good for 30K TBW for it so its just power for the plotters

I have promised myself NO MORE SPENDING unless it is from rewards so i can splurge on more disks with that first reward … i can get them at the moment for about 12$/TB but they are 6-10 years old so …

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Heh. I have close to 7000 plots. All of them are useless for pooling.

Maybe we also need to factor in hard drive prices going up?

It would be interesting to get a thorough breakdown of this, almost like Chia calculator but with real pricing based on hardware costs, running costs and the inevitable downtime.

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Has your reward income “stabilised” after your problem week ? I am in the “unluckiest” thread (not the worse) as i patiently wait for my FIRST

I think the better question is what economic value is in Chia? Everyone knows that proof of space/capacity isn’t new, neither are all the coins that envision transparent, fast, secure decentralized currency. The way I see it, every cryptocurrency has and still heavily depends on hyped-up value that’s extremely speculative. Every crypto’s orchestrator claim the same thing, but none of those coins have been treated the same way as a fiat currency much less an alternative to them.

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At this point, new farmers are more of investors/Hodlers than rational people who want to make a quick profit. To them I ask, what’s their reason to invest/farm in this coin as opposed to every other coin out there?

I’m in it for the lulz. And also being able to gloat at cryptobros trying to get HDDs whilst I hoard petabytes of empty drives. My ultimate goal is to take revenge on someone, I just haven’t figured out who yet.

Or were you looking for a non-serious answer?

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I wasn’t.

I was on CoinBase earlier and they literally pay you coins to watch videos that tell you the benefits of sponsering coin brand, which are literally the same things that every crypto has been trying to preach. It’s just so cringe that these people don’t even try to account for the fact that they’re not the first and that there are unawarably many competitors that are doing to exact same thing. The more I think about it, the more Chia (and many others) is just part of the same shenanigans slapped with a different brand name.

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I have come to a similar conclusion sadly… If the network continues to grow at the current rate the earning drops off very quickly to almost nothing…

I noticed that many videos exploring the calculator seemed to take 15% a week as a growth figure when to me it seems much nearer 10% a day.

My main concern is that too many people drop out and larger players take over, essentially centralising the network more. Even if those people stop adding to the net pace it has the same effect, and people will stop adding soon as the time to roi on hard drives is heading to infinity

I wonder if had they put in a disincentive to grow too large would have worked in some way. essentially a reducing return on larger farms. perhaps they can do this with pools… I know there might be eas workarounds but it’s just a thought…

How many Chia have you actually won?

Hi!
I’m am pretty new here…
Can I ask what you mean with ‘switching to the new format supporting pools’? Is there any new format?
Can you explain please?

Thanks!

Pool support for plots is coming.

The plots you have now are solo farming plots.

Once pool plots are here, all new plots made will be able to support pools or solo farming.

Old plots will not support pool farming.

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I see!
Thanks for explanation.
But right now there are still no ‘new plots’ available? Just solo plots?

Ty!

That is correct. Maybe next week?

I wouldn’t hold my breath for the pools. Looks like it’s being delayed. There is a YouTube video where Bram updates the latest on pooling protocols:

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