Proof-of-space Cryptocurrency Chia Triggers HDD Sales Boom In Europe

The launch of the cryptocurrency Chia has caused demand for hard disk drives in the European market to blow up, according to research firm Context.

Figures for April released by the analyst show just under 200,000 enterprise-grade nearline storage drives of 10TB capacity and above were sold to end users across the region, representing 240 per cent growth compared with the same month in 2020.

Meanwhile, NAS consumer-grade HDDs saw around 250,000 units sold, a year-on-year increase of 167 per cent.

Finally, surveillance disk drives sales were just shy of 200,000 units, up 116 per cent. These pieces of kit "should be used in surveillance but there has been no specific event in surveillance to cause that growth," senior enterprise analyst Gurvan Meyer told The Reg.

The explosive growth in drives across the market was best explained by the launch of cryptocurrency Chia, which relies on proof of space, as opposed to proof of work employed by Bitcoin and other cryptocurrencies.

"For sure it is Chia," Meyer told The Register. He said economies opening up and cloud providers beefing up their infrastrucure has als played a lesser role.

"It has taken everybody by surprise following the launch of Chia. Even Western Digital and Seagate were not expecting high demand like this." He said he expects the effect on the market to be long-lasting.

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Cryptocurrencies, especially Bitcoin, have been criticised for relying on proof-of-computational work, which sucks up a phenomenal amount of electricity and skews the market for GPUs.

The alternative proposed in the Chia model relies on proof of space, in which the user sets aside a dedicated amount of storage on their computers and the software allocates a unique number to each section of that space.

When the currency network needs to validate a new transaction, it selects one of these unique numbers at random and the computer the segment belongs to then validates the transaction. The idea is that rather than using computing power in a race, it employs a lottery system.

Context said the model made Chia not only greener than proof-of-work systems in terms of power consumption, but also more accessible as most users have unused storage space on their devices.

Chia launched in May after BitTorrent protocol author Bram Cohen founded the network in 2017.

"Proof of space is a relatively new consensus mechanism but any number of new currencies could also choose to use it," Meyer said. "Should the method gain popularity, the demand for storage could increase even further." ®