Mining machine manufacturer Bitmain are supposedly developing an ASIC (application-specific integrated circuit) for Ethereum – a cryptocurrency that is currently ruled by GPUs alone. This move could potentially cut down the demand for graphics cards from miners, which would be great news for gamers, but potentially very bad news for AMD and Nvidia.
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“During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC for mining Ethereum, and is readying the supply chain for shipments in 2Q18,” Rolland says. “While Bitmain is likely to be the largest ASIC vendor and the first to market with this product, we have learned of at least three other companies working on Ethereum ASICs, all at various stages of development.”
This could be a big hit to the customer base of both Nvidia and AMD, although the latter will likely be hit hardest by the potential change in the market – Rolland suggests Ethereum mining accounts for 20% of AMD’s sales. Ethereum currently maintains second from pole position in market cap – second only to Bitcoin – and the virtual currency has, up to now, been dominated by graphics cards to fund its Ether-powered network.
Doubts over the profitability of ASIC miners for Ethereum mining have been at the forefront of discussion for some time. ASIC miners are widely used for Bitcoin mining, although Ethereum has been assumed ‘ASIC-resistant’, due to a reliance on memory – which is currently difficult for graphics card manufacturers to acquire.
Bitmain’s new miner supposedly incorporates three motherboards, each with 32 one gigabyte DDR3 modules and six ASIC chips – reports Hexus. Popular miners for ASIC-heavy cryptocurrencies, such as Bitmain’s own AntMiner S9 packed with 189 ASIC chips, utilise far less memory.
It’s not all memory limitations, however. The profitability of Ethereum ASIC miners has been in doubt ever since Ethereum’s inception and the inevitable change to a proof of stake algorithm (one which removes the onus from mining new coins) sometime in the future. This change, however, has been a long time coming, and could still be a long way away.
As for AMD, their graphics card business has been booming thanks to the cryptocurrency market, and this business drying up could be especially bad for them. Rolland has since downgraded AMD’s stock outlook from neutral to negative, which represents a potential huge downward slide in share value if it comes to pass. Nvidia, on the other hand, don’t seem all too worried.
AMD’s stock is currently down around 1% at time of writing.