Bitcoin mining leads to an unexpected GPU gold rush

Story by: Lucas Mearian

Sales and prices of graphics processing units (GPUs) have soared in recent years because bitcoin miners have been snapping them up to create server farms dedicated to attaining bitcoin and other cryptocurrencies.

Bitcoin and some other digital currencies can be awarded by solving complex mathematical algorithms known as “Proof-of-Work,” also known as crypto mining.

In order to beat out others for digital currency, tech savvy users and even groups have taken to buying high-end “gaming processor cards” – GPUs (otherwise known as graphics processing unit cards) – to build “mining rigs” to generate the highly valuable cryptocurrencies.

Mining rigs and even large data centers dedicated to crypto mining have also consumed more and more energy. Networks dedicated to bitcoin mining reportedly consume more energy than the country of Bulgaria.

Cryptocurrency miners have also set up rigs in regions where the cost of electrical power is relatively inexpensive, prompting some countries, such as China, and even U.S. cities to restrict the practice.

The number and size of data centers now processing bitcoin transactions is still growing, though for the moment that is largely due to inertia and the long cycles required to contract, build and deploy mining systems, according to Paul Brody, Ernst & Young’s (EY) Global Innovation Leader for Blockchain Technology.

“Transaction volumes are down significantly in the last two months – back roughly to the level they were at two years ago. If that stays the same, then we will see a slow-down in build-out and probably a retirement of older systems soon, as well, to bring capacity back down,” Brody said via email.

Tech vendors such as 3M are now marketing new “liquid immersion cooling” systems to cryptocurrency miners to address overheating issues on their mining rigs.

One problem, however, is that the most popular digital currency – bitcoin – has a limited number of coins and as that number shrinks in size, the processing power required to mine them increases.

The prices for some GPUs have more than doubled. For example, Nvidia’s GeForce GTX 1070, which once retailed for $380, according to Polycon, can now go for more than $700.

Original story: https://tinyurl.com/y9f8lwlp

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