The latest fad is called Chia which uses storage for proof of work rather than computation. Chia seems to use files in the 100GB range suggesting that a low cost 2TB hard disk is plenty adequate. The focus is on the multicore CPU which does much of the work.

Chia is using the first new Nakamoto consensus algorithm since Bitcoin. Called Proof of Space and Time, it was created by Bram Cohen, the best network protocol engineer alive and the inventor of BitTorrent.

Proof of Space is a cryptographic technique where provers show that they allocate unused hard drive space for storage space. In order to be used as a consensus method, Proof of Space must be tied to Proof of Time. PoT ensures that block times have consistency in the time between them and increases the overall security of the blockchain.

These users are called “farmers.” When the blockchain broadcasts a challenge for the next block, farmers can scan their plots to see if they have the hash that is closest to the challenge. A farmer’s probability of winning a block is the percentage of the total space that a farmer has compared to the entire network.

Proof of time requires a small period of time to pass between blocks. Proof of time is implemented by a Verifiable Delay Function that takes a certain amount of time to compute, but is very fast to verify. 

The plots can be best described as lottery tickets. The more plats, the more lottery tickets. Onced the Chia coins are awarded the plots are regenerated. The rewriting over and over can be stressful to SSD and hard disks alike. A new set of plots may have a chance in 30 days but after 30 day it has fallen to 90 days. As more and more start farming Chia the more dilutive it becomes.

It remains to be seen if this gains any traction but the idea of freeing up video cards for gaming is good news.