How to Farm Chia Coin Using Chia’s New Official Pools


How to Farm Chia Coin Using Chia’s New Official Pools

Pools finally make the eco-friendly coin viable for small farmers

Courtesy the author.

Chia Coin exploded onto the cryptocurrency scene earlier this year, billing itself as a greener, less environmentally-damaging alternative to traditional coins like Bitcoin. Rather than relying on power-hungry GPUs, Chia Coin (abbreviated as XCH) is a storage-based cryptocurrency, which means it uses hard drive space to confirm blocks and award coins to miners, who Chia calls “farmers.”

When I wrote about Chiacoin a few months ago, I shared the process for setting up a basic Chia mining operation.

How to Farm Chiacoin, the New Eco-Friendly Cryptocurrency

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But at the time, there was a problem. Chia’s popularity surged so much after its launch that farming it as an individual was basically impossible. At the time of my writing, an individual with a single 100 gigabyte Chia “plot” would have to wait, on average, over 40 years to farm a single Chia Coin. Today, a user with a single plot would receive a coin only every 199 years. Most Chia farmers have many plots, reducing the waiting time to much less than two centuries. Still, solo mining was impractical for small operators when I wrote my guide, and remains so today.

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The same challenge exists for most cryptocurrencies, and most solve it through pooling. Rather than creating coins alone, multiple miners combine together, pooling their efforts and sharing jointly in the rewards when a member of the pool finds a coin. Pools are a way of spreading the risk and reward of mining across hundreds or thousands of people. They’re absolutely essential for all but the largest cryptocurrency creators.

Chia Launches Pools

Chia, for whatever reason, either failed to grasp this or never expected their coin to do so well so quickly. When Chia Coin launched, there were no pooling functions built into the platform. As Chia Coin’s popularity surged and the coin became harder to farm, unofficial pools–many requiring farmers to install potentially sketchy executable files–sprung up. All the while, Chia scrambled to add pooling to their coin. In July, they finally succeeded, officially adding pooled farming to the Chia protocol. Pools are available through the official Chia blockchain software program, which now has a dedicated tab devoted to pooling.

To implement pooling, Chia had to make changes to how it handles “plots”, the chunks of hard drive space which people use to farm the coin. If you’re already farming Chia Coin, there’s good and bad news. If you’re contented with farming solo (or you’re already in an unofficial pool, which Chia doesn’t recommend), you can continue with business as usual–the new pooling changes won’t invalidate existing solo plots.

If you want to connect your existing plots to an official pool, though, you’re out of luck. You’ll have to replot your existing plots if you want them to work in an official Chia pool. That process is time consuming and puts wear on your computer’s drives, so the need to replot isn’t ideal. If this is your first foray into Chia Coin, you’ll be starting with pool-compatible plots from day one, so that’s a definite win for new farmers.

How to Farm in a Pool

If you’ve never worked with Chia before, begin by following my original instructions to get the Chia blockchain installed and synced. Next, to get started farming in a pool, you’ll need a little Chia Coin. That’s because Chia uses an NFT-like smart contract to connect your plots to a pool, and a tiny bit of the coin is needed for the contract. If you don’t have any yet, don’t worry–you can get a little by providing your wallet address (find it in the Wallet tab of the Chia blockchain software) to the official Chia faucet. The faucet dispenses tiny amounts of XCH for testing and development purposes. Don’t rejoice over free money just yet–each “drip” from the Chia faucet is worth only a tiny fraction of a penny.

Once you have some XCH, follow the instructions in the Pool tab to join a pool. Confusingly, Chia doesn’t operate its own pool, and doesn’t officially recommend specific pools. That means you’ll need to track one down on your own. The bigger your pool, the more frequent your payouts will be. It’s also important to choose a reputable pool which won’t run off with its users farmed coins (you can always leave a pool if it doesn’t pay you, so the risk here is likely minimal). Chia has a detailed guide to choosing pools.

I chose to farm with Space Pool, because it seems to have a good reputation, is operated by a US-based LLC in Washington State, and controls about 960 Petabytes of attached storage across more than 30,000 farmers. You don’t need a pool’s permission to join — just find the pool’s address and paste it into the “Connect to Pool” field in the Chia blockchain software’s Pool tab. Space Pool has joining instructions here. If your pool is valid, you’ll see some stats about it, and you can click “Create” to make your Plot NFT.

Once your pool connection is ready, jump over to the Plots tab to create some new plots, or to access ones you already have. You can follow my previous instructions for creating a plot, but this time, make sure to select the Plot NFT for your target pool. It will show a whimsical name, which is assigned automatically when you create the Plot NFT (mine is called White Wildfowl). Once your plot is ready, it will start farming to the pool, and you’ll start getting regular payouts.

Pooling and Profits

Chia pools pay you in proportion to how much storage you contribute to the pool, and how well the pool’s farmers do overall. When any farmer in the pool receives a Chia Coin (this happens roughly every 11 minutes in Space Pool as I write this), the coin is distributed among the pool’s members. There’s a small catch, though, which makes Chia different from many other cryptocurrencies. The farmer who found the coin receives 1/8 of its value, while the other 7/8 go to the pool for distribution. That creates an incentive for individual farmers to pool and claim rewards.

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Remember that your Chia blockchain software will need to stay active and your computer will need to remain on for you to farm. As you farm, you can go to the Pool tab to see how your various Plot NFTs are doing. To see more stats from a compatible pool, click on the three vertical dots to the right of your NFT plot’s name, and select “View Pool Login Link”. Paste the link in your browser, and you’ll get a reporting page from your pool. My Space Pool page tells me how many “points” I’ve earned towards pooled rewards, as well as my total farmed space and total payouts so far (including pending payouts where I haven’t yet reached the minimum amount to receive a payment).

Your pool’s page provides detailed stats on your farm’s performance. Courtesy the author.

How much can you actually earn farming Chia Coin in a pool? To find out, I created a single plot (each is around 100gb) on an external Seagate hard drive, and connected it to Space Pool. I then left my computer on and farming. In 24 hours of farming the plot, I had earned about 0.00002 XCH. At today’s Chia Coin price of $272.42 USD, that’s about .55 cents per plot, per day. According to Chia Calculator, over a 1 month period that should increase a bit to around .73 cents per day, which works out to $0.22 per month in earnings.

Obviously, two nickels per month in revenue is nothing to write home about. But realistically, no one farms a single Chia plot expecting to earn a profit. A more reasonable minimum size for a Chia farm is 10 terabytes. A single 10 terabyte drive holds 91 plots, which means it would earn about $20.02 per month mining in a pool at today’s prices. A 10tb Seagate drive currently goes for $314 on Amazon, which means that a farmer who filled the drive with plots and farmed continually would break even on the cost of the drive in about 14 months (not counting electricity costs or the cost of the computer needed to create the plots), and any further farming earnings would be profit.

That’s better than a few cents per month, but $20 per month still isn’t great. Pool fees would eat into the profit a bit over time, too. (Space Pool charges a modest 1% fee). Why, then, are so many people farming Chia Coin? Most likely, they’re doing it because they expect the value of the coin to increase in the future. Again, farming Chia Coin now is already profitable, even if profits are relatively small. But if the coin increases in value in the future (a big if, given the volatility of new coins), farmers’ early earnings could pay off handsomely.

As recently at 2010, Bitcoin was worth only $0.08 per coin. Today, it’s worth around $45,000. Many early Bitcoin miners are now multimillionaires. If Chia Coin experienced the same level of growth, then the coins farmed from a 10 terabyte plot would be worth around $2,457 per month instead of $20. Clearly, that’s more than enough to justify the cost of hard drive space and farming hardware.

To be clear, there’s no indication that Chia Coin will ever reach a price which rivals Bitcoin’s. But the idea that a new coin — whether that’s Chia Coin, Dogecoin, or some other — could one day be worth as much as Bitcoin is likely what keeps early adopters rolling into new cryptocurrencies. As of May of 2021, Chia Coin was worth around $1,500, so the potential for large increases (and decreases) in the coin’s value does appear to exist. Again, that’s likely a big part of why farmers have thousands of petabytes of storage connected to the Chia network. They’re likely hoping that the coins they farm today could one day be worth far more (maybe even as much as Bitcoin) in a few years, and their early work would earn them thousands, or more.

Takeaways

Should you farm Chia Coin? The answer depends on your own risk tolerance, access to existing hardware, financial situation, belief in the value of lower-polluting coins which use proof-of-space processes, and your expectations for the future of XCH’s value. Certainly, if you’re looking only at today’s Chia Coin prices, farming seems unlikely to earn you much. But again, if you think the coin will become more valuable in the future (if regulators clamp down on energy-burning proof-of-work coins, for example), farming some Chia might be worth it.

Either way, the creation of official pools makes farming Chia much more appealing for individuals. Before, even if you believed Chia Coin would become way more valuable in the future, you’d have to build a giant farming rig to have even a fighting chance of farming a single coin and realizing some of that future value. With pooling, though, you could now opt to hedge your bets by building a small farm, farming a little bit of Chia Coin (even small fractions of a coin) today, and then seeing if it increases in value in the future. If it does, you could earn some profit. If it doesn’t, your costs would be much smaller than if you’d built a full-scale farming rig, and you could chalk the whole thing up as a learning experience.

For me, that’s the biggest value of any kind of cryptocurrency mining or farming today. Individual farmers and miners can almost never compete with the big players, who put millions of dollars and thousands of computers towards farming or mining cryptocurrencies. But at a small scale, creating cryptocurrencies yourself through farming or mining gives you a much clearer picture of how the currencies work, their advantages and drawbacks, and their future potential. My Chia Coin farm probably won’t buy me a lambo, but through farming in pools, I now have a much deeper knowledge of how Chia works (and actually own a tiny bit of XCH).

If you’re curious about Chia, consider creating your own single-plot farm and connecting it to a mining pool. You’ll gain a ton of knowledge about proof-of-space coins, even if your profits are minimal. And if you enjoy the process — or expect Chia Coin’s value to surge in the future — you can always continue adding plots and building a bigger farm. Now that official pooling is live, it’s much easier to get your foot in the door with your own small Chia Coin farm. How you grow from there is up to you.

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Nothing in this article should be construed as providing investment advice. Consult your financial advisor or other professional advisor before investing in cryptocurrencies or any other monetary instrument.

 

Source: https://diylifetech.com/how-to-farm-chia-coin-using-chias-new-official-pools-698661646f72

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