Many people keep suggesting Chia will cause the next storage shortage crisis the same way current crypto-currencies are with GPUs. This is understandable given that the article describes this is already starting to happen. However, everything right now is all due to _speculation_. When there is liquidity in the market and people actually know the value of the coin, the economics might look very different.
Why? Because by the very nature of storage, it is infinitely more profitable to farm only unused extra storage than it is to buy new storage specifically for farming. I'll follow with a more detailed explanation below.
Since the marginal cost of using extra space on a hard drive you already bought is near zero, this should theoretically drive the farming rewards for Chia so low that it's not economical to buy a hard drive specifically to farm Chia.
In contrast, consider compute. If I try to use extra cpu power on an average computer or server to mine bitcoin, compared to the high end GPUs and ASICs this extra amount of compute I have within my average computer is so small it would barely generate any rewards. Given that using more CPU also causes more power consumption, it also costs more.
So putting this together, due to the existence of specialized/more-performant hardware and the fact that using more CPU/GPU incurs a cost, most of the people buying high end GPUs (or definitely ASICs), are buying it primarily for mining. In contrast, with space, since it's always near free to use storage you already bought, and everyone is on a near-level playing field, the market is only profitable for those with no sunk costs. At least, that's just a theory.
Why? Because by the very nature of storage, it is infinitely more profitable to farm only unused extra storage than it is to buy new storage specifically for farming. I'll follow with a more detailed explanation below.
Since the marginal cost of using extra space on a hard drive you already bought is near zero, this should theoretically drive the farming rewards for Chia so low that it's not economical to buy a hard drive specifically to farm Chia.
In contrast, consider compute. If I try to use extra cpu power on an average computer or server to mine bitcoin, compared to the high end GPUs and ASICs this extra amount of compute I have within my average computer is so small it would barely generate any rewards. Given that using more CPU also causes more power consumption, it also costs more.
So putting this together, due to the existence of specialized/more-performant hardware and the fact that using more CPU/GPU incurs a cost, most of the people buying high end GPUs (or definitely ASICs), are buying it primarily for mining. In contrast, with space, since it's always near free to use storage you already bought, and everyone is on a near-level playing field, the market is only profitable for those with no sunk costs. At least, that's just a theory.
Just a thought, but who knows. We'll see in time.