The exponentially growing list of shortages grows longer by the day. From basic commodities like wood and rubber to more robust products like microchips, almost every sector is being hit in some way by shortages. Chia (CCC:XCH-USD) a new crypto play putting an emphasis on eco-friendly mining, might be the catalyst of yet another shortage in the near future.
Chia is one of the hottest new crypto plays. Launched at the beginning of May, it is one of the most popular green coins for investors. Rather than using the energy consumptive proof of work algorithm of Bitcoin (CCC:BTC-USD), XCH uses a proof of space and time.
Essentially, this allows miners to allocate unused hard drive space on their computers for dedicated XCH mining.
As such, mining is no longer relegated to huge farms of hundreds or thousands of graphics cards. One can mine Chia on their personal computer while they use it. Amazon (NASDAQ:AMZN) is even allowing users to mind XCH on their AWS cloud, a huge cosign of the currency.
Chia Crypto Bolsters Demand for Hard Drives
As the eco-friendly Chia crypto continues gaining popularity, it is leading to a shortage of hard drives. Miners use the hard drives to allocate as much space as possible to the lucrative, low-cost mining of XCH. Now, hard drive manufacturers are becoming a solid play for investors to profit.
Seagate (NASDAQ:STX) and Western Digital (NASDAQ:WDC), two major hard drive manufacturers, are jumping up thanks to XCH’s popularity. With both up 6.5% today, Morgan Stanley’s prediction of a crypto tailwind seems to be hitting the nail on the head. Signs of hard drive shortages peeked their head recently as enterprise-class hard drives are already in short supply. Analyst Joseph Moore says Chia farmers have already purchased approximately 10 exabytes of storage disks.
But outside of Chia mining, the increasing interest in consumer crypto farming is bolstering the existing graphics card shortage. Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) are both moving today as well. It seems that the XCH hype is driving other mining supply companies in sympathy.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.