Jensen Huang, president and CEO of Nvidia, speaks at the company’s event at the Consumer Electronics Show 2019 in Las Vegas on January 6, 2019.
David Paul Morris | Bloomberg | Getty Images
Nvidia announced on Thursday that it will release a new line of semiconductors specifically for mining ether, the second largest digital cryptocurrency.
The new type of chip is called CMP or Cryptocurrency Mining Processor. The first cards will go on sale in March, an Nvidia spokesperson said.
Ether mining is a process by which computers solve complicated mathematical programs to run the Ethereum cryptocurrency network. In exchange, miners receive ether, the digital currency that runs on the Ethereum network. Ether hit an all-time high on Thursday, up over 160% since the start of the year to over $ 1,914.
Ether’s mining algorithms work best on graphics cards, the kind of chip that Nvidia is known for. Miners often buy multiple graphics cards and put them in one machine to maximize their returns.
Last fall, Nvidia released a new line of graphics cards that are being marketed to PC gamers that have consistently sold out. The semiconductor industry is also facing shortages across the board.
Thursday’s announcement suggests that at least some of the demand for Nvidia’s chips came from cryptocurrency miners, not just gamers.
CMP products – not suitable for graphics – are sold through authorized partners and optimized for the best mining performance and efficiency, ”Matt Wuebbling, chief of GeForce marketing at Nvidia wrote in a blog post.
Nvidia said the latest chip in its line of graphics gaming cards, the RTX 3060, would be tweaked when released later this year so it won’t mine ether effectively. Cards that have already been sold, such as the RTX 3070 or RTX 3080, don’t have the same limitations, the Nvidia representative said.
“RTX 3060 software drivers are designed to detect specific features of the Ethereum cryptocurrency mining algorithm and limit the hash rate or efficiency of cryptocurrency mining by approximately 50 percent,” Nvidia said in a blog post.
Graphics cards were first developed to enable high-definition computer games, but they are increasingly important for new technologies such as artificial intelligence. Their utility in mining ether isn’t new either – in 2017, Nvidia said it was making hundreds of millions of dollars per quarter by selling chips to cryptocurrency miners.
“Cryptocurrency and blockchain are here to stay. The market need will increase, and over time it will become quite significant,” said Nvidia CEO Jensen Huang in 2017.
PC gaming is also growing strongly. According to an estimate by the NPD Group, consumer spending on PC gaming hardware is up 62% in 2020. A graphics card is often the most expensive part of a gaming PC.