Nvidia announces new chips designed for mining Ethereum as the cryptocurrency hits record highs

Nvidia announces new chips designed for mining Ethereum as the cryptocurrency hits record highs

Nvidia announces new chips designed for mining Ethereum as the cryptocurrency hits record highs

Jensen Huang, president and CEO of Nvidia, speaks during the company’s event at the 2019 Consumer Electronics Show in Las Vegas on Jan. 6, 2019.
David Paul Morris | Bloomberg | Getty Images

Nvidia on Thursday announced it will release a new series of semiconductors specifically for mining ether, the second-largest digital cryptocurrency.

The new chip type 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 in which computers solve complicated math programs to help the Ethereum cryptocurrency network run. In exchange, miners get ether, the digital coin that runs on the Ethereum network. Ether hit a record high on Thursday, up over 160% year-to-date to over $1,914.

Ether’s mining algorithms run best on graphics cards, which is the kind of chip that Nvidia is known for. Miners often buy several graphics cards and put them in a single machine to maximize their return.

Last fall, Nvidia released a new series of graphics cards marketed at PC gamers that have been consistently sold out. The semiconductor industry is also facing a shortage 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 — which don’t do graphics — are sold through authorized partners and optimized for the best mining performance and efficiency,” Matt Wuebbling, head of GeForce marketing at Nvidia wrote in a blog post.

Nvidia said that the latest chip in its gaming graphics cards series, the RTX 3060, would be modified when it’s released later this year so it won’t mine ether effectively. Cards that have already been sold, like the RTX 3070 or RTX 3080, do not have the same limitations, the Nvidia representative said.

“RTX 3060 software drivers are designed to detect specific attributes of the Ethereum cryptocurrency mining algorithm, and limit the hash rate, or cryptocurrency mining efficiency, by around 50 percent,” Nvidia’s said in a blog post.

Graphics cards were first developed to enable high-definition computer games but they’re increasingly essential for new technologies like artificial intelligence. Their usefulness in mining ether isn’t new, either — in 2017, Nvidia said it made hundreds of millions of dollars per quarter selling chips to cryptocurrency miners.

“Cryptocurrency and blockchain is here to stay. The market need for it is going to grow, and over time it will become quite large,” Nvidia CEO Jensen Huang said in 2017.

PC gaming is also growing strongly. Consumer spending on PC gaming hardware was up 62% in 2020, according to an NPD Group estimate. A graphics card is often the most expensive part of a gaming PC.