The Chia cryptocurrency craze is fuelling record sales growth in Europe among distributors of hard disk drives (HDD), according to calendar Q2 shipment data from venerable number cruncher Context.
Stats for the three months show sales to end users, via distributors and resellers, went up by 141 per cent year-on-year to 454,512 – the biggest quarter in the regional channel ever, said Context.
Nearline HDDs – the highest capacity drives – led the pack. Sales of the 18TB model swelled to 84,726, up 125 per cent from the prior quarter. 16TB drives, the second most favoured spec, grew to 51,515 units. Other HDD categories also continue to be highly prized thanks to Chia.
"The tremendous Chia-driven demand for storage capacity has turned the European market on its head, with buyers rushing to snap up HDDs," said Gurvan Meyer, business enterprise analyst at Context.
"Although it's having a knock-on effect for SSDs and NAS segments, it's headline HDDs that are really driving this spike. As long as there's money to be made in mining Chia coins, we can't see these trends changing much."
BitTorrent protocol author Bram Cohen founded the Chia network in 2017, and the currency launched in May 2021. It is considered to be greener than Bitcoin in that it uses relatively less power.
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As Reg readers know, Chia differs from traditional crypto-coins in that it relies on proof of space rather than proof of work, as detailed by our sister publication Blocks & Files.
"So, rather than using computing power in a race, it's using a lottery system. This is not only greener (in terms of passive power consumption) than proof of work but also more accessible. The barrier to entry is lower as almost anyone in the world might have unused storage space on their computer – perhaps even their phone – that could be used," Context's Meyer said.
Storage vendors such as Seagate and Western Digital have been caught out by this trend, Context told us in April.
In its Q4 earnings call in June, Seagate CEO Dave Mosley said the market for storage-centric blockchain, including those used for decentralised storage applications with Chia cryptocurrency had "garnered significant interest."
"We saw meaningful increase in HDD demand due in part to the initial buildout of the Chia net space which is comprised of both new and repurposed HDDs... This incremental demand served to tighten HDD supply dynamics and [provide] an increase in the robust demand environment."
Economies opening up and continued demand from cloud providers expanding their infrastructure played a role in in HDD demand too.
"While the future growth outlook in this space remains unclear, we are excited by the potential applications associated with innovations and decentralised file storage," said Mosley.
Desktop network attached storage (NAS) device sales in Europe jumped 73.5 per cent in Q2 to 642,267 – the second highest on record, Context said. SSD sales flew too, particularly in the NVMe Gen 4 segment, with the 1TB category up more than 11 times compared to a year ago to 74,771 and the 2TB category that came in at 27,066. ®