Chia (XCH) Price Down Over 8%, Backblaze Proves Coin Is Not Rentable after 4 Months

Chia (XCH) Price Down Over 8%, Backblaze Proves Coin Is Not Rentable after 4 Months

Backblaze found out that maintenance of 150 petabytes capacity disks would cost $175,000 every week.

Chia coin (XCH) price is currently trading at $234.39, down 8.43% over 24-hours. The cryptocurrency has been cutting off value lately, having lost 17.3% and 42.8% in 7-days and 30-days respectively. According to data from CoinMarketCap, Chia launched at $1,600 per unit in May. Shortly after, its value rose to $1,800 since it was billed as an eco-friendly alternative to Bitcoin. However, the coin started to shed value and has been in the range of $200-$250 off-late. Backblaze Inc, a cloud storage and data backup company, conducted an in-depth analysis to inform its decision on farming Chia.

According to the firm’s calculations, the extraction of Chia cryptocurrency is doomed to become unprofitable in the fourth month. This is despite the ability to use free disk space.

Details show that Backblaze has an available disk space with a total capacity of 150 petabytes. The company also stated income from Chia mining to be at an estimated $250,000 weekly. Moreover, analysts concurred that creating many sites (rafts) for Chia cryptocurrency necessitates multi-core processors. These should be of high performance and with a large amount of RAM.

“Even with enterprise-grade SSDs, no start-up costs, and a stable Chia cost, weekly mining revenues will be virtually zero as early as week 16 due to the ever-increasing complexity of mining,” Backblaze said.

Backblaze and Chia Price Market Perspective

Moreover, the company calculated the maintenance costs for equipment based on a $5 standard monthly cost for each terabyte of disk space. The analytic team found out that maintenance of 150 petabytes capacity disks would cost $175,000 every week.

Notably, data from Chia Explorer shows that the coin takes up 36.5 exabytes of disk space. This capacity equates to over 2.2 million HDD each with a capacity of 16TB. These figures brought the conclusion that:

“With exponential growth in complexity, the costs will exceed revenue from Chi mining in seven weeks. With constant growth, the cost of maintaining the farm will exceed the level of income by about 28 weeks, after which the enterprise will begin to work at a loss.”

All forecasts were done with the price of Chia at $584.6, as of early June. When Backblaze released their report early this month, Chia was trading at around $260.

Founded in 2007, Backblaze announced offering its services to the Chia community back in June. The cryptocurrency utilizes a large amount of storage space for plotting and farming. Backblaze, therefore, took this as a perfect use case and business opportunity. However, many experts expressed doubts about the benefits of such an endeavor.

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