Is Chia worth investing in?

Chia has attracted much attention since March this year. Although early participants have made money, there are still big differences in opinion about the price of the currency after its listing in May. Therefore, for new users, whether it is worthwhile to mine Chia or invest in Chia is a question of concern. Today, we will deduce the expected valuation of Chia through simple estimates.

Short-term hash rate growth estimates

Currently, most of the people entering Chia are users who have already enjoyed the early dividends. After making money through Chia, they choose to sell part of it and then buy hardware for planting and mining. The author has also sold some xch coins recently and bought hard drives, memory sticks and solid state drives to continue to increase the stakes. The main reason why novices are not on the Chia train now is that the computing power is growing too fast, and they are worried that they can’t cover the cost. The computing power growth chart in the recent period is as follows:

Image from HPOOL

It can be seen that after breaking through the 1E mark, the computing power has grown rapidly and broke through the 2E mark. As of the time of writing, it has begun to approach 3E, which means that the computing power is growing too fast now, and many people’s mining speed may not be able to keep up with the growth rate of computing power. For example, the author used to mine 0.04 coins a day, but now it is less than 0.01 coins, and the mining has not stopped during this period.

However, when we look at the computing power growth curve, we find that this line is relatively straight. Therefore, we roughly use straight line fitting to deduce the computing power situation on May 20. For convenience, we omit the complicated calculation formula here and use the graphical method to express it. The result is shown in the figure:

It can be seen that if the current speed is maintained, the total network computing power will be able to reach 5153PB on May 20. In this way, the profit of 1PB is about 1.35 XCH, which can be said to have been greatly reduced.

Of course, if you have 1PB to mine, from May 8 to May 20, the possible income will reach 22.74 coins. According to the current lowest cloud computing power quotation of 5,680 yuan/10TB, 1PB will cost about 568,000 yuan, and the income will be 105,058 yuan (the currency price is calculated at 700 USDT). In other words, in less than a month, you can get back about one-sixth of your investment (after deducting 20% ​​management costs, otherwise it will be one-fifth).

Cybtc sustainable cloud computing power quotation

Generally speaking, the payback period for mining in a bull market is shorter, usually about 5 to 10 months. If we calculate based on a 5-month payback period, we can roughly estimate that the coin price of around 700 is a relatively reasonable price in the short term. Whether the increase in computing power can continue in the future may become a focus of the coin price.

If the increase in the total network computing power has begun to ease in late May, then we can roughly judge that the coin price has reached a stage balance around 700USDT. If the computing power continues to increase, then the coin price will naturally have the momentum to rise.

Is Chia worth investing in?

Chia is a typical mining project. We used to say that graphics card manufacturers would choose to pull up ETH in order to sell graphics cards. Of course, this is just a guess. However, for terminal hardware manufacturers, they are also in a rather tangled situation. Manufacturers like Shenzhou Computer originally have their own notebooks that are sold at low prices and high volumes. Therefore, they are not willing to limit the computing power of graphics cards for ETH mining, which can also increase product sales. Of course, the probability of failure in the later stage will increase a lot. At present, from the actual situation, such computer manufacturers are still willing to cater to the needs of miners to launch corresponding mining notebooks.

For Chia, the performance of hardware manufacturers may be more obvious. It was previously reported that at a blockchain conference, there were Seagate engineers among the guests. Therefore, many people believe that Chia is backed by a big company like Seagate to add fuel to the flames. Mining is basically a matter of graphics cards. The huge profits from graphics cards brought about by the rise in Ethereum prices may also make a wave of hard drive manufacturers envious. Therefore, supporting a hard drive POC mining project is inevitable. On the one hand, it can consume inventory in the market and increase sales, and on the other hand, it can prepare for price increases. In this case, Chia may become a wise choice.

Of course, as the subject matter, Chia also has a relatively strong background. On the one hand, the halo of the identity of the founder of BitTorrent makes the project not bad. On the other hand, top investment institutions like A16z will naturally attract many followers. As for FILECOIN, ordinary retail investors have given up because of the difficulty of participation and can only buy cloud computing power. At the same time, other POC projects such as MASS are not suitable for support due to certain market selling pressure in the previous bear market. In this way, Chia naturally becomes a very good choice. It is conceivable that if one day you find that Chia's trading organization has found a hard disk manufacturer such as Seagate, are you willing to participate in this feast or not? This is actually something that needs to be seriously considered before investing in Chia mining.