NVIDIA, the largest computer chip maker in the US by market cap, is taking sides in a battle of Ethereum miners versus video gamers.
Sorry, miners.
NVIDIA said today it is cutting the hash power for three graphics processing units (GPUs) used in both video games and mining rigs: its GeForce RTX 3080, RTX 3070, and RTX 3060 Ti graphic cards.
“Because NVIDIA GPUs are programmable, users regularly discover new applications for them, from weather simulation and gene sequencing to deep learning and robotics,” the NVIDIA blog post today read. “Mining cryptocurrency is one of them.”
But, it reiterated that the new cards would be “less desirable for miners” and that “GeForce is made for gaming.”
Due to a combination of coronavirus-induced supply chain disruptions and quarantine-fueled gaming sprees, there is a global shortage of graphic cards. That’s a problem for video game enthusiasts and cryptocurrency miners, both of whom rely on the cards to optimize their rigs.
For serious gamers, better GPUs make the gameplay smoother and better to look at. Miners, meanwhile, rely on fast GPUs to solve algorithmic puzzles quicker than competitors. When they do, they win the right to create new blocks in the chain—and receive transaction fees and newly minted ETH in return. (Owing to differences in blockchain programming, Bitcoin miners, by contrast, rely on ASICs, or “application-specific integrated circuits.”)
Indeed, miners are one reason for the shortage. Following the trajectory of other cryptocurrencies, Ethereum has increased in price by over 1,500% over the past 12 months, making mining more profitable and further shrinking the availability of cards.
Prices for GPUs have predictably risen. GPUs that would normally sell for $400 are going for $1,200. The RTX 3080, which has a retail price of around $880, is selling for $3,600, per TechRadar.
NVIDIA has tried to have it both ways, creating separate product lines.
In February, the GPU maker released the NVIDIA CMP (cryptocurrency mining processor), a graphics card that wouldn’t actually handle graphics. It removed display outputs to increase airflow, which is great for mining but unworkable for gaming.
It followed up in April by reintroducing a feature that reduced the hash rate for its GeForce RTX 3060 cards, making them less desirable for miners. Today’s announcement essentially doubles down on those restrictions by applying them to other GeForce products set to ship in May. NVIDIA is labelling the new cards LHR, short for Lite Hash Rate.
The move may be a smart one for NVIDIA business-wise. Though GeForce miners can also be used to turn a profit mining Ethereum Classic, the demand for ETH mining is due to decline and, ultimately, cease by this point next year as the blockchain network moves away from mining and toward a proof-of-stake system. In such a system, users secure the network by locking up tokens they own.
When that change comes, hardware will be much less important for the blockchain. But for now, though, the battle continues.
