Ever since the first public rumblings of Chia Networks and Bram Cohen’s new enterprise it has been wrapped in “green” marketing, to the point where if the average person knows one thing about Chia its that it is less wasteful than Bitcoin. It is named after a plant (salvia hispanica) after all, and one that ironically has the of sucking up all the water around it while it germinates and coating itself in a oily substance. There is a metaphor here.
And that part is true. It is far less energy impactful than Bitcoin, or Ethereum or any number of popular proof of work coins. And it always will be, by design. That part is true. But is it green?
No, and for a reason that simply cannot be overcome. This is a fundamental problem of cryptocurrency is that you are trading efficiency for integrity and decentralization. It is simply not efficient to run a database using any proof system even if that check only took a minimum of cycles and no wizardry or moving the goalposts will resolve that simple reality. Efficiency isn’t the purpose or goal, decentralized trust is. So while there may be a use case for this, running an efficient payments network is not it.
The other issue is the dead weight of the hard drives it consumes. Once a hard drive has been filled with plots, there is a good change it stays that way until it dies. Some will end up repurposed for other uses, but as long as farming XCH is profitable it will also make more sense to buy another drive if you need storage rather than deleting plots. This is the fundamental problem with the Chia theory of consuming empty space: if it is profitable to do farm empty space then its not empty space anymore – its Chia space. On top of the wear on SSDs that takes place during the plotting process, although not terribly significant compared to the reports out there, there is a real consumable cost here to create those plots – which also has its own environmental impact.
When compared to proof of work cryptocurrencies Chia does absolutely use less energy, but the story there isn’t so simple either. Proof of work mining operations can be easily turned on and off to ensure that they only operate when power is cheap and plentiful and mining is profitable. This is true for both GPU mining rigs and powerful commercial ASIC miners. With proof of space once the cost is sunk profitability is almost based entirely on uptime of your farm. There is no incentive to turn anything off, and every incentive to leave it on to get all 4608 chances a day on your plots. Because of this, and the raw footprint of space these farms will take, there will be a fixed cost to keep the farm regardless if it is online and farming – as well as the additional power of running many high density hard drives.
While PoW mining can be very energy-wasteful, Chia is very wasteful in terms of physical space and in terms of number of hard drives that will be permanently allocated to this task until they spin themselves to death. The theory is that unused space will be the primary driver for Chia, the reality is that almost all Chia netspace will come from dedicated hardware that either home or datacenter operators will setup and run permanent.
Also due to both how the server/client software is written and the pooling protocol is being developed there are and will be orders of magnitude more Full Nodes online than with other cryptocurrencies. Bitcoin currently has just shy of 10000 full nodes, and ethereum has just over 3200 synced nodes. The Chia Dev team is currently claiming to have over half a million full nodes already based on the node introducer they run. And I believe it.
This means that there are orders of magnitude more computers processing the blockchain on Chia than the 2 biggest cryptocurrencies combined. And based on the pooling protocol and development direction this is only likely to increase. So while the energy used to create proofs is lower, the energy used to actually hold the network is much higher (when compared to blockchain size, Chia is still very new with a small chain).
Because of these reasons, it is very difficult to declare Chia as an environmentally friendly cryptocurrency, it is still wasteful in many ways. But it is clearly less wasteful than the exahashes of computing muscle thrown at the Proof of Work blockchains.