What is Chia cryptocurrency and why is it causing hard drive prices to skyrocket in Asia?

Hard disk drives are the new gold. That’s what the remarkable price increases of conventional drives and also SSDs in Asia, where prices have soared in recent days, seem to prove.

What are the reasons for these increases? To the emergence and growing popularity of Chia, a cryptocurrency that can be mined not with GPUs, but with hard drives: the more space you dedicate to storing its transactions, the more you gain from this unique mining process.

Getting hard disks and SSDs at good prices can get tricky

Bram Cohen is behind the creation of Chia, who was previously responsible for revolutionizing the P2P philosophy with the creation of the BitTorrent protocol.

This development boasts of being much more efficient and environmentally friendly. The consensus mechanism for adding transactions to its blockchain is based on the storage space of hard disks (the more we have, the more we mine), and not on complex calculations that require a lot of energy.

That’s what happens with bitcoin or other cryptocurrencies that can be mined with specialized machines or GPUs. Chia already attracted the interest of large investment groups such as Andreessen Horowitz in 2018, although it is only now that it is starting to become popular.

Chia is expected to start entering the cryptocurrency trading market on May 3, and that has prompted speculators to emerge who are buying up lots of hard drives to anticipate demand and then try to make a juicy profit.

Chinese sites such as Taobao or JD.com have sold out of several large-capacity enterprise hard drives, with prices skyrocketing dramatically.

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Hard disk price inflation

Prices have gone up as much as 66% on some drives, and while lower capacity drives are not as exposed, the rush for these types of components could also cause these hard drives and SSDs to increase in price significantly.

With enterprise drives sold out or at exorbitant prices, some speculators and future large-scale “miners” are now going after hard disk drives geared for video surveillance environments. Although they are not as reliable when performing massive read and write operations, they are still apparently a good option for these investors.

So far these price increases have not been passed on to other markets, but we will have to be vigilant to ensure that this potential new gold rush does not end up affecting many more users and markets.

The threat is even greater than in the case of GPUs: many users can do without these graphics cards if they do not play games frequently, but hard disks and SSDs are an essential component of any PC or laptop, and these increases could affect the selling prices of these devices in the medium (and even short) term.

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