Nvidia Launches Dedicated Crypto Mining Product Amid Game Card Shortage

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Nvidia Corp. on Thursday introduced a specialized product for cryptocurrency mining while limiting the mining capabilities on its game cards, an attempt to avoid a repeat of the difficulties caused by demand from cryptocurrency miners in recent years. Nvidia NVDA and rival Advanced Micro Devices Inc. AMD, -1.18% have struggled to produce enough graphics processing units, or GPUs, to meet demand from bloggers, server customers and others amid a global shortage chip. In a blog post, Nvidia announced Thursday that its RTX 3060 gaming graphics processing unit, due out February 25, will use software to cut card performance in half if cryptocurrency mining is detected, with mining of the cryptocurrency ethereum ETHUSD, + 3.89% noted.

“Ethereum has the highest global mining performance for any GPU-mined coin at the moment and is therefore likely to be the main driver of GPU demand in mining,” an Nvidia spokesperson told MarketWatch at comments sent by email. “Other algorithms do not contribute significantly to GPU demand and this cannot change rapidly due to network effects within a given cryptocurrency,” the spokesperson said. “The speed limiter applies to anything that uses Dagger Hashimoto or Ethash-like algorithms.” The move is to ensure that the card reaches the hands of players, who have been clamoring for cards that are in short supply, and potentially prevent a repeat of the problems caused by demand from crypto miners in the past. In late 2018, Nvidia was left with excess game card inventory after cryptocurrency prices plummeted, drying up interest in mining and creating a “crypto hangover” that damaged the company’s finances for almost a whole year. For more: ‘Crypto Hangover’ has Nvidia reeling in the holidays with a major headache. To that end, the company said it was launching a dedicated mining chip, the Nvidia Cryptocurrency Mining Processor, which doesn’t offer the graphical features used in games, but not in mining. The chip’s lower-performing models, the 30HX and 40HX models, will be available in the first quarter, while the higher-performing models, the 50HX and 90HX, will be available in the second quarter, Nvidia said. According to the company, the 90HX offers roughly three times the ethereum mining performance that the Nvidia 30HX did not include a price tag for its CMP, while its economy-priced 3060 card, which was announced in January, is nominally priced at $ 329. Nvidia spokesman told MarketWatch that the company does not announce the price of the CMP at this time and that the first models will be launched in March. Recently, BTCUSD bitcoin prices, -1.01% cleared $ 50,000 for the first time, while ethereum prices have surpassed $ 1,900 to all-time highs. Even cryptocurrencies like dogecoin, initially created as a joke, have risen more than 900% in price this year. In 2018, ethereum prices fell from a high of more than $ 1,300 in January to a low of less than $ 85 in December of that year. Similarly, bitcoin started 2018 at over $ 10,000 and ended the year below $ 3,700. Nvidia shares fell about 1% along with the rest of the chip sector on Thursday; the PHLX Semiconductor Index SOX, -0.80% down 1.2%