Jensen Huang, president and CEO of Nvidia, speaks during 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 launch a new series 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 spokesman said.
Ether mining is a process in which computers solve complicated mathematical programs to help the Ethereum cryptocurrency network work. In return, miners receive ether, the digital currency that works on the Ethereum network. Ether hit a record high on Thursday, more than 160% YTD to over $ 1,914.
Ether’s mining algorithms work best on video cards, which is the type of chip Nvidia is known for. Miners often buy multiple graphics cards and place them on a single machine to maximize their return.
Last fall, Nvidia launched a new series of graphics cards marketed to PC players that are constantly sold out. The semiconductor industry is also facing widespread shortages.
Thursday’s announcement suggests that at least part of the demand for Nvidia’s chips came from cryptocurrency miners, not just players.
“CMP products – which do not make graphics – are sold by authorized partners and optimized for the best mining performance and efficiency, “wrote Matt Wuebbling, head of marketing at GeForce at Nvidia on a blog.
Nvidia said the latest chip in its gaming graphics card series, the RTX 3060, will be modified when it launches later this year, so it will not mine ether effectively. Cards that have already been sold, such as the RTX 3070 or RTX 3080, do not have the same limitations, said the Nvidia representative.
“RTX 3060 software drivers are designed to detect specific attributes of the Ethereum cryptocurrency mining algorithm and to limit the hash rate, or cryptocurrency mining efficiency, to about 50 percent,” Nvidia said in a blog.
Graphics cards were first developed to enable high-definition computer games, but are increasingly essential for new technologies, such as artificial intelligence. Its use in ether mining is also not new – in 2017, Nvidia said it earned hundreds of millions of dollars a quarter by selling chips to cryptocurrency miners.
“Cryptocurrency and blockchain are here to stay. The market’s need for this will grow and, over time, it will become very large,” said Jensen Huang, CEO of Nvidia, in 2017.
PC games are also growing strongly. Consumer spending on PC gaming hardware increased by 62% in 2020, according to an estimate by the NPD Group. A video card is usually the most expensive part of a gaming PC.