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Half a Jigawatt!? Is crypto mining going too far? Mark Williams looks at the relationship between the graphics card drought and mining boom.
The relationship between the graphics card drought and mining boom
When Nvidia announced the RTX 3000 Laptop series of GPUs at CES we all got a little excited about the new performance levels that would come in this year’s laptops. Since being out for a couple of weeks and getting mildly annoyed at Nvidia, with its continued terrible mobile GPU naming scheme, we find that getting any laptop with an RTX 3000 series GPU in it is next to impossible.
Aside from the usual suspects of production yields at Samsung, and the COVID pandemic driving up the demand as people stay at home and want higher-powered gaming systems, the mining boom has reared its ugly head and is hitting new heights, with one Bitcoin now worth over $65,000 (almost triple the 2017 boom price); miners simply cannot get enough GPUs to mine with.
With the desktop market tapped out, mining farms are bulk-buying new laptops with RTX 3000 GPUs in them to grow their hashing clusters.
Given the pandemic and the mining boom, an internet café in Vietnam, after closing its doors to the public due to local COVID restrictions, turned to crypto mining and has since found that “profits are higher” than doing regular business.
Of course, running a lot of power-hungry GPUs consumes a lot of electricity and works against a farm’s profitability. One sneaky operator in Malaysia was caught and arrested for illegally tapping into the electricity grid to get free power for their mining operation.
Even legal large-scale mining farms have their own power issues, with 14 large mining farms in Iran (where electricity is cheap and is thus a favourite place for miners to set up shop) causing power outages. Those four farms alone consume up to 450 Megawatts, typically enough for a city of 100,000 people!
The mining craze will likely last quite a while; most analysts have written off the first half of this year as far as GPU supplies go. Nvidia has even stated that in Q1 of 2021 RTX 3000 card stock levels are likely to get even worse before improving. With the likes of Elon Musk and Tesla buying US$1.5B worth of Bitcoin recently, it seems like the market isn’t going to cool down any time soon.
However there has been some small glimmers of hope recently. The first being that the US government is set to act on the global chip shortages.
U.S. President Joe Biden’s administration has stated that it “will identify ‘choke points’ in the current supply chain and figure out a way to relieve bottlenecks in the system that have been present for years – bottlenecks that have been exacerbated by the current pandemic. The administration is actively working alongside key stakeholders in the industry and with our trading partners to do more now”.
President Biden is set to sign an executive order in the coming weeks that will begin a supply chain review for critical goods, including the semiconductors that power consumer electronics, helping to establish ways of “improving the physical production of those items in the U.S.”.
Something SMIC (a large semiconductor foundry based in the US) will be looking forward to, since the former Trump administration’s import restrictions prevented it from acquiring more of the advanced equipment it needed to increase production to meet global chip demand.
Nvidia is also set to return back to the future as rumours abound that Nvidia is about to re-release – at least in limited quantities – RTX 2060, 2060 Super and GTX 1050 Ti cards. With no new GPU launched in the lower part of the market yet this generation, it seems Nvidia has dug up some spare stock from the back of its closet to try and help satiate intense market demand.
How long this will all last is anyone’s guess; lets just hope that the coming RTX 3060 (non-Ti) launch provides enough stock, so that gamers can actually get a hold of something to game with.