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Bitcoin Stabilizes (For Now) While Chia Causes SSD Shortages

Following its 30% drop last week, the value of Bitcoin has stabilized recently at about $40,000. The stability is welcome after last week’s plunge and sell-off, but $40,000 is a far cry from its $60,000 mark of April.

Last week’s drop took place after Chinese authorities reinforced their stance against cryptocurrency and also after Elon Musk suggested that Tesla would stop taking Bitcoin payments due to the high energy required to mine it.

While China hasn’t changed its position, Musk has doubled back and said that he spoke with bitcoin miners in North America and they are committed to finding a solution to the high energy requirements of mining. Elon Musk, it seems, has quite the influence on the value of cryptocurrencies.

Chia, A Green Solution?

Chia, the new cryptocurrency launched by Bram Cohen, does away with Bitcoin’s (and most other cryptocurrencies’) “proof of work” requirement and replaces it with a “proof of space and time” requirement. The latter means that less energy is needed to mine Chia, but the downside is that more storage is required. In fact, Chia is being blamed for SSD shortages as potential miners try to get a foot in the door early.

Despite the hard-drive shortages, Chia has managed to double its valuation after raising $61 million from investors. It might launch its IPO by the end of the year.

The Nature of Cryptocurrency is Volatile

Bitcoin may have stabilized for now, but the nature of cryptocurrency is to be volatile. It’s not just Elon Musk’s whims that create highs and lows, but many other factors that drive the value of Bitcoin and other cryptocurrencies up and down. Investors who crave stability will do better with a different type of investment. Those who believe in the ideology of cryptocurrency will have an easier time handling the market’s fluctuations.