This leading cloud hosting provider has banned cryptomining

Hetzner, a popular german Web hosting and dedicated server provider updated its terms of service to prohibit cryptomining on its servers, after finding several users using its online storage offering of mine Chia.

Chia is based on a new consensus algorithm known as the proof of space and time, and deviates from the usual proof of work used by crypto-currencies.

In essence, unlike traditional cryptocurrencies such as Bitcoin and Ethereum, Chia, created by BitTorrent Bram Cohen protocol developer, requires more storage for its mining, rather than for its processing prowess.

Hetzner’s high capacity storage systems known as Storage boxes offered a perfect platform for anyone wishing to mine Chia.

However, fearing that Chia’s mining operations could shorten the life of its disks and increase its maintenance costs, Hetzner decided to ban the use of its resources for cryptocurrency mining.

Just a FUD?

In a tweet translated from German into English by BipComputer, the company explains that it has noticed a sudden increase in the number of orders for its large hard disk servers.

“In order for us to operate an efficient and reliable network for our customers, the operation of cryptocurrency mining applications is prohibited,” reads the updated terms for the Storage Box service.

While Chia is supposed disk destruction capabilities forced several record makers to ban the use of their records to mine Chia, cryptocurrency creator Bram Cohen took to Twitter to allay fears.

“For some strange reason the ‘Chia is burning hard drives!’ repeats like fashionable fud. It’s strange, because for the most part it’s just plain wrong, ”Cohen wrote on Twitter.

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Going through BipComputer