Nvidia interfered to prevent the most common graphic cards from being used for crypto mining, bringing the fight for high-powered silicon between the video gaming and cryptocurrency worlds into the open. The move was made to alleviate a severe shortage of video games, and it highlights the burgeoning demand from cryptocurrency enthusiasts as prices have risen this year. Nvidia intentionally restricting the capabilities of its most common video gaming cards to make them less useful for performing the calculations needed to validate Ethereum transactions.
Nvidia’s graphic processing units, or GPUs, were first designed to handle the demands of rendering video images in real-time, a challenge that has given a large amount of data that needs to be processed simultaneously. The same technology has since been adapted to become the workhouse of artificial intelligence, one of the most data-intensive computing tasks, as well as crypto mining and involves solving a complex problem in return for fractions of a token, something that has become increasingly attractive as prices of ether, the tokens used on the network have soared.
Even though crypto demand has resulted in a spike in growth and earnings, it has posed a challenge for Nvidia, since many of the most devoted video gamers, who have long become the company’s core consumer base, have been unable to purchase the latest graphics cards. Nvidia’s profits have been increasingly correlated with the wild fluctuations in cryptocurrency markets, culminating in a boom-and-bust cycle as crypto prices dropped down.
“The company limited the capacity of one of its cards, the RTX 3060, as well as the new 3080 and 3070 cards, which are targeted at the most extreme gamers, and the latest edition of the 3060. Despite the ongoing chip shortage, we expect demand to continue to outstrip supply for most of this year, and Nvidia is making progress in producing more GPUs. Our operations team is quick to react and executes flawlessly and we expect our inventory to grow”, said Vishal Dhupar, Managing Director of Nvidia.
Limit the usage of graphics cards could also encourage more crypto enthusiasts to purchase Nvidia’s latest Cryptocurrency Mining Processors, which were released earlier this year and video gaming cards are easier to adapt for mining ether than bitcoin, with the Ethereum network accounting for around 90% of crypto rewards, that can be won using repurposed GPUs
Nvidia faces a difficult task in stopping crypto miners from using its gaming cards without driving them away from GPUs entirely however, the company’s handling of the shortfall so far indicates it has struck the right balance. Tom’s Hardware recently put various graphics cards through their paces and found Nvidia’s RTX 3080 and 3090 to be the best by a wide margin for mining Ethereum tokens. The value of the tokens has increased nearly six-fold since the beginning of the year, placing the total supply of the currency at nearly USD 400 billion, or half that of bitcoin.
“Nvidia expected that product supply would catch up with demand in few months, the supply situation has not improved. Many of the big retailers are still out of stock on the RTX 3000 cards, and when the new stock does arrive, scalper-run bots pick it up in seconds. The increase in GPU supply will take place this quarter and the items will become more accessible in the coming weeks and months. We expect scalpers to continue snatching up cards and reselling them for exorbitant prices on eBay unless supplies dramatically improve”, added Vishal Dhupar.
