The price of Chia coin decreased by more than 8% after the Backblaze analysis – coin mining is not profitable after 4 months
2 min readBackblaze Inc., a cloud storage and data backup company, conducted an in-depth analysis to inform it of its decision to farming Chia.
Chia coin recorded a decrease of 8.43% in 24 hours. The cryptocurrency has been declining recently. It lost 17.3% in 7 days and 42.8% in 30 days. According to data from CoinMarketCap he started XCH in May at $ 1,600 per coin. Shortly afterwards, its value rose to $ 1,800 because it was listed as an organic alternative to BTC. However, the coin has begun to depreciate and is in the range of $ 200-250.
Backblaze about farming Chia coin
According to company calculations, the extraction of the cryptocurrency Chia is doomed to a loss of profit in the fourth month. This is despite the ability to use free disk space.
Details show that Backblaze had disk space with a total capacity of 150 petabytes. The company also said the income from Chia’s mining was to be an estimated $ 250,000 a week.
“Despite enterprise SSDs, no startup costs, weekly mining revenues have been almost nil since week 16 due to the ever-increasing complexity of mining,” said Backblaze.
In addition, the company calculated equipment maintenance costs based on a standard monthly cost of $ 5 per terabyte of disk space. The analytics team found that maintaining 150 petabytes of disks would cost $ 175,000 each week.
In particular, data from Chia Explorer shows that Chia takes up 36.5 exabytes of netspace. This capacity equals more than 2.2 million hard drives, each with a capacity of 16 TB. These data led to the conclusion that:
“With the exponential increase in difficulty, the costs will exceed the revenues from chia mining in seven weeks. With the constant growth, the cost of maintaining the farm will exceed the level of income in about 28 weeks, after which the company will start working at a loss. “
All forecasts were made with the XCH price at $ 584.6, in early June. When Backblaze released its report, XCH traded around $ 260.
Founded in 2007, Backblaze announced its services to the Chia community in June. The cryptocurrency uses a large amount of storage space for rendering and agriculture. Backblaze therefore took it as a perfect use case and business opportunity. However, many experts have expressed doubts about the benefits of such an effort.
Simple solution. What do you think about that?
