After an extraordinary start to the year, the crypto market entered a bearish period in mid-May, prompting some to re-evaluate their stance on some of the fundamentals surrounding the crypto industry.
Bitcoin’s Long Fall (B T c) — over 50% — and later Dip in Mining Difficulty up to 16%, which is suspected in part due to the news of China’s intention to take tough measures Against Tesla’s decision to engage in crypto mining and trading as well Stop accepting bitcoin as payment For its electric vehicles, a turning point has occurred that has taken criticism of crypto to a whole new level.
Against this background, some commentators and crypto enthusiasts have started talking about a possible end to the mining era. Or is this just a fresh start and a way for the industry to reinvent itself and use new solutions to please a growing number of stakeholders?
Hardware losses and price increases
The first bell actually came back in February of this year, when buyers of GPU cards, whether they were miners or gamers, started talking about one. Huge shortage of available cards, which led to excessive price increases.
For example, in the United States, the price of some models of cards has increased by 120%. However, it should be noted that the lack of components that make up the video card played a significant role in such price increases. what else, slowdown in global supply chains The COVID-19 on the back of restrictions has aggravated the already dire situation.
Given the spread of frenzy around the short supply of GPU cards, miners were looking for alternative methods of mining cryptocurrencies such as New Cryptocurrencies, Like Chia (XCH), Appeared. Mining this cryptocurrency requires the use of solid-state drives (SSDs), which are used to store user data on personal computers and are several times cheaper than GPU cards.
Chia uses the free space on the device’s storage, and the more gigabytes free, the faster this cryptocurrency will be mined. Furthermore, Bram Cohen, the creator of the Chia network, argued that his cryptocurrency is Environment friendly Compared to others because hard drives consume significantly less power than GPU cards, which means less damage to the environment. Of course, critics were quick to point out a significant drawback of such a strategy, arguing that the lifetime of the device reduced to just 80-160 days, which means that it must be constantly dealt with in order to innovate.
Despite the choice of GPU cards, the emergence of Chia has inevitably led to a shortage of storage devices and a rise in their prices. In China, back in April, consumers started To buy hard disk drives with a capacity of 4-18 terabytes, while SSDs were also in hot demand. In Hong Kong, enthusiasm immediately provoked an increase in prices for these components; Depending on the model, the cost increased by $25-$75.
fighting the miners
In the wake of the price hike, GPU card makers began to actively block crypto miners in February. Leading the Attack, Nvidia Tried to Stop Mining released A special driver 470.05 for its RTX 3060 card, which is widely used for ether mining (ETH) however, did not act as a block miner in most cases. ignore It uses a cheap plug to HDMI port that mimics the operation of a monitor.
A failed attempt to limit GPU card performance forced Nvidia to attempt a hardware block. At the end of May, the company Announced a line of GPU cards called GeForce RTX 30 Lite Hash Rate. The GeForce RTX 30 LHR series includes the 3060, 3060 Ti, 3070 and 3080 series of video cards.
Protection against mining on these cards is implemented at the hardware level: when Ether is mined, the performance is halved, and the overall mining efficiency drops by more than 50%. The start of sales was scheduled for the end of May to the beginning of June, but the company is yet to release the product.
Nvidia partners have also joined the initiative. released GeForce RTX 30 LHR cards under their own brands, and Zotac was one of the first. These cards are distinguished with a new marking so that buyers can differentiate between the cards when purchasing the card. Anti-mining cards have the letters “GE” or “G” in the name, for example, the Zotac RTX 3060-12GD6 Destroyer GE Pro.
In addition, at the end of May, PC maker Asus Registered v2 series GPU card with Eurasian Economic Commission. Most likely, this is how the company labels the LHR model, which has hardware and software protection against ether mining.
It’s worth mentioning that AMD, Nvidia’s only major competitor in the GPU card market, has yet to react in any way to its competitors’ attempts to return gaming card prices to their previous values. The company has not announced any plans to release special anti-mining modifications of its accelerator. Meanwhile, the company said That it will not limit the computing power for mining cryptocurrencies so that users can determine what to use the computing power of the GPU.
Denying Crypto Miners Using Gaming Cards, Nvidia Simultaneously Offered Miners are an option in the form of a range of CMP HX accelerators. These products are specifically focused on mining, which is expressed in the presence of a specialized Crypto Mining Processor (CMP) and the complete absence of external interfaces. In other words, it is impossible to connect the monitor to them – thus, it cannot be used for gaming.
The Asus CMP 40HX will be able to deliver mining efficiency of up to 43.77 megahash per second, while the official number announced by Nvidia is 36 MH/s. The 21% higher hash rate is due to optimization of memory and power consumption of the video card.
It was assumed that a special mining card CMP 40HX will go on sale before the end of the first quarter of this year. Like all other models of specialized video cards of the CMP HX series, they will be distributed by NVIDIA partners. Asus was the first to announce possible prices for such cards: the CMP 40HX could cost $699 and the smaller model, the CMP 30HX, mined efficiency is 26 MH/s, about $599.
AMD is also preparing a new GPU that will be designed for cryptocurrency mining. Card Navi 10 and Navi 12 . will be based on chips, which will be able to mine Ether. AMD has said that the new GPU VCN and display will be released without Core Next DCN technologies, which will prevent them from streaming video to the display, once again, rendering them useless to gamers.
Other known manufacturers of mining equipment are also not sitting on the sidelines. Sabrent announced Sales of PlotRipper SSD to Chia Coin miners in late May. The main advantage of new SSDs is their large capacity, which will be gradually used up if the drive wears out. The PlotRipper and PlotRipper Pro models have 4TB and 8TB NAND chips, respectively.
Has the End of Crypto Mining Been Canceled?
Manufacturers’ desire to separate their mining cards from gaming cards is understandable, especially as the company is facing problems with resources for production and tarnishing its image in the process.
But the main thing in any production is demand, which generates income. At the end of the first quarter of 2021, Nvidia earned $155 million In revenue from the sale of GPUs designed specifically for cryptocurrency mining. In the second quarter of the fiscal year, it expects to generate $400 million.
AMD also released its first quarter report good Showing impressive revenue growth, to $3.45 billion, an increase of 93% over the same period last year. Management explained this dynamism by increasing demand for consumer Ryzen processors and Radeon graphics cards. The average selling price is increasing in both the CPU and graphics segments. In fact, the revenue from the sale of client processors and their average price has reached record levels.
Thus, if companies continue to make the kind of profits in which cryptocurrency mining plays an important role, it is likely that chip makers will be willing to cater all avenues to customers with specialized products. It may indeed be that mining is not only alive and well, but may actually strengthen as a result, given the sharp drop in crypto prices.