Cryptocurrencies based on owning a large number of hard discs, rather than using computer processors, could offer a less energy-intensive alternative to bitcoin and might even make it cheaper to build data centres – although one is already causing soaring demand for hard discs that is disrupting supply chains.
Bitcoin and several other popular cryptocurrencies are created, or mined, using a concept called proof of work, which involves solving computationally difficult puzzles that consume a large amount of electricity. Bitcoin’s annual electricity consumption is estimated to be 148 terawatt-hours and rising, or around the same amount as Poland’s. Now, rival currencies are emerging that instead make use of large numbers of empty hard discs, a concept known as proof of space.
Because hard drives are less energy-intensive to run than processors, proof-of-space currencies are touted as being more environmentally friendly. However, demand for one such currency, Chia, has become so high that some Asian countries, such as Vietnam, are reporting shortages of hard discs. The same phenomenon occurred with graphics cards, which proved to be extremely efficient at mining certain proof-of-work cryptocurrencies. Currently, around 3 million terabytes of hard disc space are being devoted entirely to mining Chia, enough to store 3 billion movies.
Jason Feist at hard drive manufacturer Seagate says the company is experiencing strong orders and that staff were working to “adjust to market demand”.
He also suggested that these new cryptocurrencies could provide a way for companies building large data centres to offset the cost by turning them over to mining. “Chia, and similar technologies such as Filecoin and Sia, show potential ways businesses can turn their idle infrastructure into ongoing revenue,” says Feist.
Michel Rauchs at the University of Cambridge says that while bitcoin’s proof-of-work approach is well understood, proof-of-space alternatives are still in their infancy.