How to Mine China (XCN)

Chia Farming: Overview

Chia Network is an eco-friendly and smart decentralized blockchain system. It is a full-scale crypto payment system that provides bank operations service, crypto loan service, cross-border payments, token farming and saving services. Chia (XCN) is a native cryptocurrency for Chia Network.

Chia Network History

In 2017 Bram Cohen, who is a well-known American programmer and co-founder of the BitTorrent protocol, announced a new blockchain network Chia Network. In 2021 a new crypto coin Chia (XCN) was launched on the market.

Chia Network positions itself as a new-generation eco-friendly blockchain. It does not use the Proof-of-Work protocol. Instead, it presents and popularizes a new Proof-of-Space-and-Time protocol that does not require so much energy for mining. That is why Chia Network uses the term farming instead of mining: it highlights a difference between new network and existing ones.

The topic of energy consumption by blockchain networks provokes hot debates in the crypto market. Briefly, only the Bitcoin blockchain consumes more energy than some countries. Bitcoin mining, as well as some other blockchains, stimulates the electricity price growth and the deficit of computer hardware on the market. Cryptocurrency #2, Ethereum migrated to the Proof-of-Stake protocol from Proof-of-Work to reduce energy consumption.

Bram Cohen and his Chia Network decided to get a piece of the eco-friendly trend pie and presented a new protocol with lower energy consumption. This is the main benefit of the Chia Network.

Chia promoted itself as a new-generation blockchain. It collected $6.1 billion in investments in March 2021 and planned the IPO till the end of 2021. However, it never happened. Chia disappointed the investors.

Proof-of-Space-and-Time protocol vs Proof-of-Work and Proof-of-Stake

Decentralized systems need to use some protocol to secure transactions in the system. Bitcoin, the cryptocurrency number one, uses the Proof-of-Work protocol. This protocol requires users to mine, or complete complex computational puzzles to verify every transaction in the blockchain network. The mining, in its turn, requires powerful computers and energy.

In the first days of the crypto market, nobody cared about energy consumption. However, with the market growth, Bitcoin miners consume too much energy. Probably, the Proof-of-Stake protocol could save the situation, but it also has its disadvantages. Thus, the use of the Proof-of-Stake protocol can provoke the influence center formation – a pool of stakeholders that can influence the whole blockchain.

So, the cryptoworld needs a better solution, a new green, and an independent protocol. Chia owners claimed Proof-of-Time-and-Space can solve the problems of the existing protocol. Chia farmers cannot impact the network. Chia network energy consumption is non-essential, especially compared to Bitcoin.

How the Proof of Space and Time Protocol Works

A farmer prepares free disk space on the hard drive(s);

Then installs Chia client and sets up slots;

A blockchain starts calculations and the results (hash numbers) are saved in the slots;

Then the algorithm checks the hash numbers in slots and assigns the reward to the user who has the closest number to a new block.

As you see, there is a random choice in this scheme. It reduces the farmer’s chance to get a reward but protects the system from interference.

When Chia just entered the market, it attracted the market’s attention because of its potential. However, it failed to win market share. Some experts consider this coin as undervalued and it can skyrocket. Still, it is hardly possible on the bearish market, so we do not wait for this in the nearest future.

Chia (XCN) Price History

The development and promotion of Chia Network started before it was officially launched. So, the market waited impatiently for a new coin. Chia started trading on May, 3rd, 2021 with a price of $1,595, and soon reached $1934 – its highest price ever. Till the end of May it lost half of its price despite the news of $6.1 billion investments. The launch of Chia Network pushed up the demand for hard drives and resulted in deficit and hardware price growth.

Optimists predicted smooth price growth for Chia till the end of 2021. Instead, the Chia price went down smoothly and at the end of summer 2021, it traded near the important level of $200. This downward trend caused depression among Chia farmers: the profitability of mining decreased and most of them switched to other coins.

Moreover, Chia farmers started claiming that farming burned out hard drives very quickly. This phenomenon can hardly be explained, the hard drives should not break down just because of intensive use. Probably the sudden deficit stimulated faster hard drive production with lower hardware quality.

Anyway, the Chia price decreased and in six months the currency lost 95% of its initial value. However, Chia could not stabilize at this level. In autumn 2021 the price was moving down with rare rollbacks. It could not even stop at $100, and after breaking the resistance in the last days of 2021, Chia continued to go down.

Little by little, without sharp jumps, Chia continued losing its value. At the end of 2022, it trades around $30.

Again, Chia can potentially skyrocket in the future. However, now it is a time of crypto winter on the market, with no growth and low trade volume. Chia obviously has no power to break this trend solely. So, we do not expect its growth soon.

What Do You Need to Start Farming Chia?

While Chia uses the Proof-of-Time-and-Space protocol, a farmer should accumulate enough SSD and HDD hard disks. SSD is faster in data processors but they have a relatively short lifetime. HDD disks work slower but live longer. So, miners copy full China plots from SSD to HDD disks.

One Chia plot size is little more than 100 Gb, but it also requires 250 GB operation memory. So, a farmer should check the prices of hard drives and calculate the potential income before starting farming.

After all preliminary work is finished, it is necessary to open the Chia website, click the Install Chia blockchain button, go to the GitHub page, choose your operating system and download the application. Then a user sets up a private key and Chia plots, with the temporary and resulting catalog for each plot.

Before the process starts, it is needed to wait until blockchain synchronization is finished. Then farming starts. So, the process is rather easy but it requires some preparations and investments.

How Long Does It Take to Farm Chia?

One user can farm Chia with one plot in 199 years now. So, to reduce this time Chia farmers use many plots to get just one block with a reward of 64 Chia coins. How long does it take to farm 1 Chia?

The higher CPU clocks and slightly faster SSD can do a single plot in about 30 minutes, which means around 48 plots per day. But it required more hard drive storage, which bumps the total cost to over $2,400. With its current price of $31.07, it can be profitable if a farmer has access to some free storage capacities.

A user can also buy some Chia coins and resell them when the price goes up. However, now the crypto market is in a bear trend. Starting last autumn, the crypto market shrank several times. Now it is drifting in a narrow flat trend and its main problem is a lack of liquidity.

XNT token also drifts between support at $28.63 and resistance level at $33.10. This cryptocurrency is relatively new, so we have no statistics about its behavior during the crisis time. So, you can add this cryptocurrency to your investment portfolio, but this currency is risky, and its profitability is questionable.

Where to Store Chia Сoin?

Let us remind you that there are hot and cold wallets. Hot wallets are for everyday use, they can be a cloud wallet or an installed application. If you use Chia for payments or any operations with crypto, you can store it in the hot wallet that supports this coin. It can be Chia’s official light wallet or a third-party application like Hoogii from Hashgreen Labs team.

If you need a Chia wallet to save your coins, we recommend setting up a cold wallet. It means you have to download the application, install it to the external hard drive, transfer your Chia coin to this wallet, disconnect this drive from your computer and keep it offline until you want to use this coin for some operations.

Read also Chia coin Price Prediction for 2022-2030

FAQ

Is Chia Mining Profitable?

The profitability of Chia farming is questionable. Farming requires many hard drives and even the cheapest available options worth money. Add to these calculations the costs of other hardware (coolers, etc) electricity, and a stable internet connection. Besides, potentially Chia farming can decrease the hard drive lifetime, and a farmer has to update the hardware.

So, with the current price near $30 per coin Chia farming can hardly be profitable.

How Hard Is It to Mine Chia?

A user can rather farm Chia than mine it. The process of farming is automated, a farmer just needs a stable internet connection. However, a farmer should prepare a lot of free disk space (SSD and HDD hard drives) and other components like coolers. The more disk space a farmer can use, the more plots can be downloaded, and the chance to win a reward is higher.

What Is Chia Crypto Used For?

Chia is a full-scale cryptocurrency that can be used for trading, cryptocurrency loans, savings, currency exchange, and product purchases. It works like other cryptocurrencies but pretends to be greener. I\Chia requires less energy for its farming.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.