Chia is based on a new consensus algorithm known as proof of space and time, and is a departure from the usual proof of work used by traditional cryptocurrencies.
In essence, unlike traditional cryptocurrencies such as Bitcoin and Ethereum, Chia, created by BitTorrent protocol developer Bram Cohen, demands more storage for its mining, rather than processing prowess.
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Hetzner’s high-capacity storage systems known as Storage Boxes offered a perfect platform for anyone wishing to mine Chia.
However, fearing that the Chia mining operations would cut the lifespan of its drives and increase its maintenance costs, Hetzner decided to outlaw the use of its resources for mining cryptocurrencies.
Just a FUD?
In a tweet translated from German into English by BleepingComputer, the company explains that it noticed a sudden increase in the number of orders for its large hard drive servers.
“In order for us to operate a high-performing and reliable network for our customers, the operation of applications for mining crypto currencies is prohibited,” reads the updated terms for the Storage Box service.
While Chia’s supposed disk destroying abilities have forced several disk manufacturers to ban the use of their disks to mine Chia, the cryptocurrency’s creator Bram Cohen took to Twitter to allay the fears.
“For some odd reason the 'Chia burns out hard drives!' is getting repeated as the fashionable fud. This is odd, because for the most part it's just plain wrong,” Cohen wrote on Twitter.
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