It has already been a massive year for cryptocurrencies so far, but a number of familiar issues continue to plague the industry, including questions over the environmental impact of crypto mining.
In a bid to solve the issues with traditional mining, as well as give small-scale miners a seat at the table once more, a new breed of cryptocurrencies has emerged that use storage capacity as opposed to compute power to determine which miners are rewarded.
TechRadar Pro spoke to Jason M. Feist, VP Emerging Products & Solutions Engineering at storage firm Seagate, to hear more about storage-centric cryptocurrencies and the opportunities they may create.
What is storage-centric cryptocurrency and how does it work?
For most people, crypto has been synonymous with Bitcoin. Those with some Bitcoin savvy know the technology relies on “proof of work” to validate transactions. This requires significant CPU and GPU resources. Other blockchains pursue different roles using different validation methods. Increasingly, “proof of space”, which validates operations with participants’ excess storage capacity, provides an approach that may be both greener and rife with opportunity for organizations to derive revenue from their IT infrastructure.
Storage-centric blockchains are indeed seen as a more energy-efficient alternative to the blockchains that depend on proof of work. This is the case because the storage-enabled currencies lack the power-hungry transactions. According to a United States Data Center Energy Report, storage typically only amounts to 11% of data centers’ power.
An example of storage-centric crypto is Protocol Labs’ Filecoin. It uses “proof of space and time” for blockchain validation and similarly rewards miners in FIL currency. The storage miners make their unused capacity available to the network. Given the enormous amount of capacity pledged to Filecoin, a mining entity can archive a great deal of data, which frees up its local capacity for other, more critical use. Chia is another well-known example of storage-centric currency.
How will storage firms seek to address increased demand for high-capacity drives brought about by crypto?
It is true that Seagate is right now experiencing strong demand. Through strong operating principles, we manage risk to minimize supply disruption and ensure resilience. We will meet existing direct customer and authorized distributor commitments for the June 2021 quarter. We continue to work closely with our customers to understand future demand and adjust plans accordingly.
How viable is Chia’s write-intensive mining system for miners in the long-term, given the toll it takes on SSDs?
We can’t address the specifics of Chia’s system. Drive performance depends on how the user chooses to use it. Seagate’s golden rule on how to optimize any storage—to prolong its lifetime and ensuring the best performance—is this: Always choose the right storage to your purpose.
In the crypto world, it pays to use a combination of high-reliability, enterprise-class SSDs and large-capacity hard drives. Given the importance of data protection and data durability, it is best to use a hardware RAID or erasure-coded solution featuring drive and even controller redundancy. This type of configuration would maximize uptime and data protection.
Applications vary, of course, but in general crypto involves three main scenarios, with the following storage recommendations:
If a particular cryptocurrency penalizes lost capacity, choose storage systems that offer additional controller protection (erasure coding and RAID), which should prevent that from happening.
For the transaction-intensive workloads such as data sealing, SSDs are a good bet that helps achieve application performance.
For capacity-intensive workloads, cost-efficient and space-maximizing hard drives are the way to go.
Might storage companies look to alter warranty policies in light of the emergence of storage-based crypto?
We have provisions in our warranty for total bytes written and we intend to follow them. As market conditions change, we will further evaluate our position and policies.
Do you expect storage companies to release drives specifically for crypto use cases, as we’ve seen with GPUs?
This is a possibility. We are exploring this opportunity and imagine others may be as well. We can’t speculate about future product development at this time.
What are the main arguments against storage-based cryptocurrencies?
We aren’t making the case for or against cryptocurrencies. We just understand that there is a need. Since our mass-capacity storage is world-class and very much in demand, crypto miners and farmers have been asking for guidance, and we can offer that.
Could organizations use storage-based crypto to monetize idle storage?
Absolutely. Filecoin and others might end up offering more enticing mass-capacity storage than today’s big, centralized providers. Whether or not this happens, the staying power of blockchain and decentralization is an inevitable reality. It’s time to make room for it—on our drives, transactions, and in the realms that are yet to be discovered.