What is hard disk mining? A brief analysis of the principles of storage mining technology

HDD Mining, also known as "storage mining", is the process of obtaining cryptocurrency based on hard disk storage. Unlike traditional mining based on graphics processing units (also known as GPU mining), HDD miners use hard disks to generate new data blocks in the distributed ledger and receive rewards. In terms of assembly and maintenance, HDD mining farms are almost the same as traditional mines.

In addition to the hard drive, you will also need a computer, monitor, and input devices including a keyboard and mouse in order to set up a hard drive mining scenario. The main feature of this cryptocurrency mining method is that it does not require a powerful GPU or central processing unit (CPU), which means it is different from Bitcoin mining.

The main component of hard disk mining is HDD, that is, hard disk. The capacity and performance of the hard disk are the most important. You don’t need a separate GPU to mine. Generally, an integrated motherboard or a GPU built into the CPU is enough.

advantage:

✓ You don't need to buy an expensive motherboard with lots of PCI slots;

✓ You don't need an advanced GPU;

✓The software installation and configuration of hard disk mining is generally simple;

✓ The hard disk does not need to perform a lot of graphics processing, so the energy consumption is very small, saving electricity costs;

✓The hard disk generates little heat when running, and there is no need to use a fan to lower the device temperature (however, professional storage mining machines are generally equipped with fans, and professional mining farms are equipped with temperature control systems);

✓The whole process of hard disk mining is simple and easy for novices to get started.

shortcoming:

✗It is difficult to find second-hand hard drives;

✗The hard disk drive has a limited service life (approximately 10,000 hours);

✗When the hard disk is full, you need to add a new hard disk;

✗Some cryptocurrencies require collateral first.

How HDD Mining Works

Hard disk mining process: data blocks are saved to the hard disk. The more stored, the more mining rewards.

algorithm

The following are several mainstream algorithms for hard disk mining:

1. Proof of Capacity

The proof-of-capacity algorithm allows miners to provide their available disk space, which the system can use to complete tasks such as creating new data blocks. Users generally need to P disk and generate data in the hard disk in advance to obtain block rewards. Therefore, there is a certain degree of randomness and uncertainty.

2. Proof of Storage

Proof-of-Storage is an algorithm for storage mining. Its most notable feature is that storage is mining, and it also relies on miners to provide hard disk space. Proof-of-Storage has become a solution for decentralized cloud storage networks, rather than generating data blocks like proof of capacity.

In other words, in the storage system, users rent out hard disk space to others. However, this service does not pay rent, but allows the hard disk space owner (that is, the hard disk space lessor) to mine in the network, and the cryptocurrency obtained belongs to the miner. The reward for storage mining comes from others paying monthly file storage fees.

Due to differences in underlying blockchain networks and algorithms, the implementation of storage proof will be formed according to different conditions. For example, there are storage proofs combined with workload and storage proofs based on resource quantity.

3. Proof of Replication (PoRep)

Proof of Replication (PoRep) is used to prove that data is stored in hard disk space. The algorithm comes from the Filecoin network. The network also has a time-space proof to ensure that miners are still storing data at a specific time. The replication proof and time-space proof of the Filecoin network constitute a new type of storage proof, which can effectively prevent Sybil attacks, exogenous attacks, and generation attacks. The common feature of these attacks is that they pretend to store more data than the actual capacity in an attempt to obtain rewards that they should not have.

Filecoin has established a truly distributed storage market, where buyers and sellers can trade storage space in a credible manner. Miners who rent hard drive space to others are sellers, and customers who pay to store files on miners’ hard drive space are buyers. Proof of Replication and other technologies have gone a step further than previous proof of storage, establishing a decentralized buying and selling market, rather than simply storing and mining by miners.

4. Proof of Authenticity (PoST)

Storage proof is an improved storage proof that is used to verify the authenticity of storage nodes and storage behaviors and maintain the authenticity and value of data. This algorithm first appeared in the IPSE network.

* Storage proof can refer to all proofs used for storage mining, but the implementation methods are different. Sia's algorithm is based on proof of storage based on workload calculation; MaidSafe's algorithm is based on proof of storage based on resource quantity. The major categories of storage proof in the table specifically refer to the traditional storage proof system.

Hard Drive Selection: SSD vs HDD

Hard disks are the hardware component at the core of storage mining, and some miners may consider using solid-state drives (SSDs) to speed up the data block generation process, hoping to mine more cryptocurrencies faster. However, in storage mining, the comparison of SSDs and HDDs does not make much sense, because the performance of storage devices is almost irrelevant in storage mining. SSDs only speed up the initial drawing (P disk) process, and HDD performance is already overkill for storage mining. HDDs are widely used in data centers. In addition, the life cycle of SSDs is much shorter than that of hard disk drives, and the cost per gigabyte will be higher. This is why SSDs are not worth it. To sum it up in one sentence, use HDDs for hard disk mining.

What currencies can be mined?

Since hard drive mining is a relatively new concept (aside from miners who have been around for a while), only a few stand out. Still, which cryptocurrencies are worth paying attention to for hard drive mining? Here are a few of the most popular ones.

BurstCoin

Burst is one of the earliest cryptocurrencies that uses hard disk mining. The platform relies on the capacity proof algorithm introduced above. Miners who mine Burst need to have a large-capacity HDD hard disk with a capacity of 10TB or more to ensure mining efficiency. The more hard disks used, the more rewards you get.

Burst started in August 2014, and currently has a market value of 58.2221 million yuan, a single coin price of ¥0.028, and a low turnover rate (only 1.37%).

MaidSafeCoin

MaidSafe originated in 2006 and was released in 2014, earlier than Burst. However, it seems that its ambition is too great and it has never exploded. According to the official description, MaidSafe is based on a completely decentralized platform, where application developers can create decentralized applications. This network is constructed by individual users who provide storage, computing power and bandwidth to form a global autonomous system. The network's token is called Safecoin, which is used to pay for decentralized Internet services. Therefore, MaidSafe is not just a storage network.

Currently, MaidSafe has a market value of ¥539 million, and the price of a single Safecoin is ¥1.18, which is much higher than Burst, but the turnover rate is only 0.42%, which is still very low.

Storj

Storj is a decentralized file storage system that allows you to store files securely in encrypted form. In other words, users provide disk space to become miners and receive STORJ token rewards, which are used to encrypt and store files for customers. Storj was officially released in 2017 and has received support from many investment institutions. However, it is still in the Alpha stage.

At present, the circulating market value of Storj is ¥143 million, and the price of a single coin is ¥1.06. The turnover rate is relatively high, reaching 6.90%, which is better than Burst and MaidSafe. At present, the number of Storj currency addresses is 65,238, and the popularity is relatively high.

However, judging from Storj’s token distribution plan, the project party occupies the majority, which has also caused it to be criticized by the community.

Siacoin

Sia is a decentralized cloud storage platform that provides cloud storage and competes with centralized cloud storage services such as DropBox, Amazon, Apple, and Microsoft. Using the Sia network, users can rent out their idle hard drive space to others for encrypted file storage.

Sia users use the Siacoin token to pay for online services. If you have Siacoin, you can rent hard drive space from other people. The smart contract starts transferring payments to a specific host (storage device) only if the file can be safely stored for a specified period of time. If that person's host loses your file, then he will not receive payment.

The current circulating market value of Sia is ¥614 million, the price of a single Siacoin is ¥0.0147, and the turnover rate reaches 6.95%, which shows that Sia is the best performing storage mining network.

However, the blockchain is also facing a monopoly problem. According to official tracking data, the blocks produced in the past 30 days show that the first two account for 99% of the total.

Filecoin

Filecoin is a decentralized distributed storage network based on the InterPlanetary File System (IPFS). The token is also called Filecoin (FIL for short), with a total of 2 billion pieces, of which 70% are mined by miners, which means the total number of FILs that can be mined is 7 billion.

Currently, the Filecoin mainnet has not been launched (officially expected to be launched in Q3/Q4 2019), and now there is only a futures price of ¥ 33.7 per coin.

Since Filecoin raised $257 million in early stage funds and received investments from world-class investment institutions such as Stanford and Coinbase, it is also expected to receive high hopes.

Filecoin is one of the few “miner-first” networks, and miners will receive up to 70% of the tokens.

POST

IPSE is a storage search engine based on the Interstellar File System (IPFS), and is the application retrieval layer of IPFS. In the IPSE network, miners can get rewards for completing data distribution, storage, retrieval, etc. As distributed storage networks, IPSE and Filecoin have many things in common.

POST is the token of the IPSE network, with a total of 10 billion. Similarly, miners receive 70% of the tokens, that is, 7 billion POSTs belong to miners and are mined by them. According to official data, POST mining is a long process, which is halved every two years and can be mined until 2099, but like most networks, the early number will account for the largest proportion (50%).

How much money can you make from hard drive mining?

If you use 10 Toshiba brand hard drives, each costing about ¥2,000, with a total capacity of 100 TB, you can earn 2,040 tokens per month according to the online Burstcoin calculator. As of this writing, the cost of a Burstcoin is equal to ¥0.02896, so the monthly income from mining will be ¥59, and the annual income will be ¥708. Add in the annual electricity bill, which is roughly ¥500. After a simple calculation, the payback period will be more than 80 years.

This is because the price of a single coin is too cheap, and many people cannot invest in storage mining. The investment payback period is too long, which is daunting. Since the price is low, many people would rather consider other cryptocurrencies, such as Bitcoin, which currently costs about $10,000 (real-time price ¥ 73357) and has a market value of ¥1.30 trillion. Both the price of a single coin and the circulation volume are better than the above storage cryptocurrencies.

Not everyone will buy Bitcoin because it is not suitable for everyone.

In the hard disk mining, Filecoin and POST are more popular because both are built on the IPFS protocol and have a complementary relationship.

In January 2018, the futures price of Filecoin reached an all-time high of $30.15, then began to fall back and hit an all-time low of $2.14 in April 2019. A few months later, the price rose to $9.18. The current price range is between $5 and $6. If the futures price is based on this, the market value of Filecoin that all miners can mine is 20x70%x5=7 billion US dollars, and $3.5 billion can be mined in the first six years. Not counting the other 30%, the early market value of 70% of Filecoin held by miners exceeds EOS, making it one of the top 10 cryptocurrencies in the world.

The POST of the IPSE network is halved every two years, not every six years like Filecoin. Therefore, the distribution of POST of IPSE will be concentrated in the early stage. This is because the data retrieval of the entire IPFS network will explode in the early stage, and the node activity will enter another level. But what is the price of POST? There is no definite news at present.

In any case, you should understand that high returns often go hand in hand with high risks. In the field of storage mining, the prices of cryptocurrencies are both high and low. And they are not the only choice. However, Bitcoin is not suitable for everyone. Because different cryptocurrency networks are developed in different directions, and there is a time delay in the market's response, cryptocurrencies are all-encompassing, and it is not surprising that the circulation of various prices is common.

If you want to ask how much money can you make from hard disk mining? There is no accurate answer. In addition, multiple hard disk mining networks are separated from each other (except Filecoin and IPSE, which are based on IPFS and can complement each other). If you want to choose hard disk mining, you must use their official mining software and install them one by one. It's like, you use Xiami Music and find that you can't listen to Jay Chou's songs. Then you download NetEase Cloud Music, and the song list turns gray one day, so you download QQ Music, and the songs are removed one day. You installed fifty apps just to listen to music, but the platforms have formed their own "traffic islands" and there is not much connection between them. In summary, we can see two main problems with hard disk mining:

▶There are many isolated storage networks;

▶The cost for miners to mine multiple storage currencies at the same time has been increased;

The value of hard disk mining and distributed storage

But why do many people still believe that hard disk mining will replace computing power mining like Bitcoin? This is largely due to the value of decentralized distributed storage. After years of development of cloud storage, the problems of centralized storage have been exposed: 1) Data leakage: In the past few years, data leakage incidents of large companies have occurred frequently; 2) Hacker attacks: DDoS attacks can cause data on corporate platforms to suffer devastating blows; 3) Rising storage costs: More business means more servers are needed, and the cost is naturally increased; 4) Data ownership: Personal private data ownership has been stolen.

In order to address these problems, decentralized distributed storage solutions have emerged. Its advantages are low storage costs, saving storage space and bandwidth, and faster speed; based on blockchain smart contracts, the market price of storage is fair and reliable and cannot be falsified; in terms of privacy, it has higher security and privacy protection, and users control the data rather than centralized servers.

So what role does hard disk mining play in this? In a distributed network, node instances are actually miners and running devices. Therefore, nodes can host different data and allow the network to perform verification-based retrieval. Miners are the maintainers and builders of the entire network. They will participate in tasks such as storage, block generation, and verification. If there are no miners, the entire network will lose nodes and cannot form a distributed network.