Nvidia designs new processor for ethereum mining

Chipmaker Nvidia on Thursday announced that it is working on releasing a new series of semiconductors for mining ethereum, the second-largest cryptocurrency after Bitcoin.

The new chip is called Cryptocurrency Mining Processor, or CMP. Sales of the first set of chips will begin in March, according to a spokesperson. And it will be strictly used for ether mining.

Ether mining is the process whereby complicated math programs are solved on computers to run the Ethereum cryptocurrency network. Once the process is successful, miners get ether, a digital currency retrieved from the Ethereum network, in exchange.

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

Ether, the second-largest digital currency hit a record high on Thursday, up over 160%, to more than $1,914.

Digital currencies function with algorithms that run at different capacities. For ether, its mining algorithm works best on graphics cards such as the kind chip Nvidia produces. To maximize returns from the graphic cards, miners buy several of them and put them in a single machine to process.

Nvidia chips are mostly demanded by gamers and several telecom companies. This time, the specifications of the demand for Nvidia chips are suggested to come from cryptocurrency miners.

Graphics cards were initially developed to support high-definition computer games, but have revolutionized to accommodate other technologies like artificial intelligence. Due to increasing demands, chipmakers like Nvidia are developing graphics cards to support more ether mining. Although, their role in ether mining isn’t new. In 2017, Nvidia said it sold thousands of chips to cryptocurrency miners, which in return generated hundreds of millions per quarter for the company.

“CMP products – which don’t do graphics – are sold through authorized partners and optimized for the best mining performance and efficiency,” said Matt Wuebbling, head of GeForce marketing at Nvidia.

Last fall, the chipmaker released a new series of graphics cards targeted at PC gamers – which were all sold out. The semiconductor industry is now facing a shortage. Now that Nvidia has added ether mining to its portfolio, it needs to step up its production.

The company said the latest developed chip in its gaming graphics cards series, the RTX 3060, would be upgraded and released later this year but it would not mine ether effectively. But cards like the RTX 3070 or RTX 3080 that have already been sold will not face the same limitations, the Nvidia spokesperson said.

“RTX 3060 software drivers are designed to detect specific attributes of the Etheruem cryptocurrency mining algorithm, and limit the hash rate, or cryptocurrency mining efficiency, by around 50 percent,” Nvidia wrote in a blog post. “Creating tailored products for customers with specific needs delivers the best value for customers. With CMP we can help miners build the most efficient data centers while preserving GeForce RTX GPUs for gamers.”