Intel is set to enter the Bitcoin mining business. No, this doesn’t mean that it will set up mining farms, though it probably could if it wanted to. Rather, Intel is set to produce a bitcoin mining ASIC (application specific integrated circuit). The report comes via Tom’s Hardware (opens in new tab) stating that Intel is set to unveil its ‘Bonanza Mine’ chip for mining Bitcoin at the upcoming International Solid-State Circuits Conference (ISSCC).
Earlier today, Fox Business (opens in new tab) reported that crypto-mining startup GRIID has signed a contract with Intel to buy ‘BMZ2’ mining ASICs. According to the company’s S-4 filing (opens in new tab), it’s already signed a supply agreement and that its initial orders are on track to be delivered in 2022. GRIID is said to have reserved a portion of production capacity until May 2025 which would indicate the company, and likely others too plan to buy a lot of them.
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Intel’s chip will go up against those from Bitmain, currently the largest supplier of bitcoin mining hardware. It remains to be seen how Intel’s chip will perform, but given that hash rates and hashes per watt are essentially the only thing that matters, Intel will have its work cut out. Though with its advanced process technologies and vertical integration, it is well placed to make a success of it compared to other Bitcoin ASIC designers, those which rely on external foundries for manufacturing.
Bitcoin mining is different from the mining that causes havoc in the GPU markets. The Bitcoin mining algorithm uses SHA-256 and ASICs can be developed specifically to mine Bitcoin. However, while Bitcoin mining machines are very expensive and energy intensive, they are still far better at Bitcoin mining than GPUs are. Ethereum’s Ethash is designed to be resistant to ASICs and as a result is more decentralized, hence the widespread GPU mining craze.
Intel isn’t the first big company to dip its toes into the crypto mining markets. Nvidia caters to Ethereum miners with its Cryptocurrency Mining Processor (CMP) cards which are sold directly to large scale Ethereum miners (opens in new tab). If you’re wondering why stocks of Nvidia cards are so low, that’s as good an explanation as any for that right there. If company X goes to Nvidia, or AMD for that matter, and wants to buy a container load of cards, they’ll be all too happy to comply. More for miners, less for gamers.
Bitcoin mining consumes more electricity than many countries (opens in new tab) and if Intel’s mining ASIC is successful, consumption is only going to go up, something that continues to alarm environmental activists. Though repeatedly delayed, at least Ethereum is still scheduled to switch its mining consensus mechanism away from energy intensive proof of work mining to a much more efficient proof of stake (opens in new tab) model. It’s better for the environment, and it will also mean that mining demand for GPUs should all but dry up! We hope anyway.
Intel will present its Bitcoin hardware on Wednesday, February 23rd at the ISSCC conference.