Nvidia has long been at the center of the battle between the gaming community and cryptocurrency miners that has sent the price of its graphics cards (or GPUs) skyrocketing.
Since 2021, the company has sided with players for being a more profitable market.
In May, Nvidia announced that would limit the hashing power for its RTX 3000 line of graphics cards, with the aim of making them “less desirable” for cryptocurrency miners.
Called Lite Hash Rate (or LHR), the software update has made mining ether (ETH), in particular, 50% less efficient, according to the company.
A new article from the website PC Gamer now revealed that the company’s initiatives may have been in vain.
NiceHash, a provider of mining pools (joining together numerous mining machines to strengthen the probability of finding a block), claimed that the LHR presentation “did not discourage miners in any way”.
Another solo miner, who runs a mix of LHR graphics cards with cards from other lines, stated that “LHR was useless” and that the software update “is not a problem for miners”.
Even with this mix of graphics cards, this miner earns around $4,500 worth of ether every month.
The reasons for failure are diverse. First, limited GPUs can be unlocked, making them 75% as efficient as GPUs from other lines.
Second, miners can still mine lesser-known cryptocurrencies besides ether. Another miner named Sev told the PC Gamer that “there are even better coins than ether to mine for my monthly withdrawal purposes than holding”.
The focus on smaller cryptocurrencies will also play a much more significant role in this battle for graphics cards as the Ethereum network migrates from the proof of work (or PoW) mining algorithm to the proof of stake (or PoS) algorithm.
Crypto Mining Algorithms and Nvidia
The PoW algorithm, also used by the Bitcoin network, means that users have to operate powerful computers 24 hours a day to verify transactions on the network.
For performing this task, they are rewarded in the network’s native currency, either ether or bitcoin. The more mining machines (especially the more advanced ones) you have, the more rewards you will be able to earn.
The PoS algorithm relies on different economic incentives instead of accumulating the most expensive hardware possible.
The more of a native coin you are staking (or how much of a network’s token you own and put at risk to verify the network), the more likely you are to get the network reward.
Failing to do a good job of verifying the network means you could lose some of the staking tokens as a penalty.
Furthermore, if Ethereum manages to make the transition, it could be the end of the arms race for powerful computer chips.
Meanwhile, video card manufacturers continue to struggle on how to meet the demands of the two competing user bases.
Nvidia’s attempt to turn miners away from their commercial graphics cards and towards crypto mining-specific cards has had mixed results.
Revenue from the sale of its Crypto Mining Processor (or CMP) cards dropped 60% between Q2 and Q3 2021 to $166 million.
Colette Kress, Nvidia’s chief financial officer, had expected the product to “fall quarterly to very negligible levels in the fourth quarter.”
Other manufacturers, including AMD and Intel, have essentially given up, announcing that they would not limit cryptocurrency mining in their main product line.
*Translated and edited by Daniela Pereira do Nascimento with permission from the Decrypt.co.