scorecardNvidia is desperately trying to stop its chips from being used for crypto mining
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Nvidia is desperately trying to stop its chips from being used for crypto mining

Nvidia is desperately trying to stop its chips from being used for crypto mining
CryptocurrencyCryptocurrency2 min read
Nvidia is a globally recognised chip maker specialising in GPUs (graphics processing units) and other essential components. The American giant leads the gaming industry and is known for ludicrous hardware that's unlike any other. And it's often the first choice of many professional gamers.

But in the last few months, it has become harder to find a high-end Nvidia chip in stock. PC gamers are constantly on the lookout for new hardware and find it increasingly difficult to buy new parts. While the global semiconductor shortage is partially responsible for the vacuum, crypto miners are one of the main reasons behind the sudden yet prolonged shortage.

Cryptocurrencies like Bitcoin require coins to be mined -- a virtual process that ensures news coins keep flowing but not too quickly. A complex mathematical algorithm is computed, and at the end of it, a coin is mined. Every cryptocurrency has its own mining process, but they share one thing in common -- high-end chips that can compute as fast as possible.

Miners have hoarded all the supply of chips they could, and legitimate users are left in the lurch. Nvidia says it has halved the Ethereum hash rate of new RTX 3080, 3070, and 3060 Ti graphics cards to discourage sales for mining. These cards will start shipping from May and carry a new tag that identifies them as "Lite Hash Rate." It also added that all existing cards would continue to work as usual, and the lower hast rate is applicable only on newer chips.

"RTX 3060 software drivers are designed to detect specific attributes of the Ethereum cryptocurrency mining algorithm and limit the hash rate, or cryptocurrency mining efficiency, by around 50%,” Nvidia's said.

Reducing the hash rate downgrades the GPU performance while trying to mine Ethereum but will have close to zero effect on actual gaming or computing. Nvidia stated that the move is deliberate and will cut back on the cards' ability to perform calculations for validating transactions on the Ethereum network.

Nvidia's stock is also now increasingly tied to the enormous swings in cryptocurrency markets. As the company has stated before, its priority is to ensure its gaming cards end up "in the hands of gamers."

There's a unique lineup for mining equipment by Nvidia, and it's called Cryptocurrency Mining Processor (CMP). So far, four cards have been unveiled -- 30HX, 40HX, 50HX, and 90HX. Nvidia has reiterated that miners should opt for these cards and not crowd the RTX lineup, which is meant for gaming.

The shortage is so acute, that many vendors in the US and Europe are forced to use a lottery or randomised token system to sell these GPUs. The grey market has picked up massively and cards are selling at a premium that can be upwards of 100%.

The process of mining is also the primary reason why Tesla walked away from Bitcoin payments. The mining process requires a lot of energy, which is usually generated from fossil fuels -- ultimately defeating the purpose of getting a green Tesla.