Mining on video cards is doomed: myths and reality

In the near future, the main tools for the extraction of one of the most popular cryptocurrencies — Ethereum — will be specialized chips (ASIC), the high efficiency of which will force the owners of “farms” to get rid of video cards GeForce and Radeon, as well as cryptocurrency accelerators based on graphics cores NVIDIA and AMD. This conclusion is based on acquaintance with the material of the CNBC resource, built around the letter to the clients by Susquehanna analyst Christopher Roland (Christopher Roland).

Last week Susquehanna specialists made a trip to Asia to study the prospects of appearance of ASIC for Ethereum in the near future. How did you find the group of analysts during the trip, the decision authored by Bitmain — manufacturer of 70–80 % ASIC for Bitcoin mining — has been developed. Deliveries of the first batches of chips to customers are scheduled for the second quarter. Following Bitmain, according to Christopher Roland, at least three other Developers will release their specialized Ethereum mining chips.

NVIDIA GeForce vs AMD Radeon

Susquehanna is not yet ready to name the exact figures reflecting the superiority of Asian Bitmain over NVIDIA GeForce and AMD Radeon, but it seems that the purchase of video cards for Ethereum production will soon lose all meaning. At the same time, the complete abandonment of the GPU in mining is not anticipated due to the existence of cryptocurrencies, successfully mined on graphics adapters at home.

In any case, American analysts are confident in a significant decrease in the sales of Radeon cards and GeForce cryptocurrency miners. On the assessment of the Susquehanna, the implementation of the GPU to calculate the virtual coins Ethereum today brings AMD about 20 % of revenue, and NVIDIA — 10 %. Accordingly, after the terrible competition of graphics adapters from Asia, the demand for Radeon will drop the most, and all this against the background of AMD’s significant lag from NVIDIA in the segment of high-end gaming accelerators.

According to Mr. Roland, AMD’s share price is expected to fall to $7.50 per unit in the foreseeable future, reaching a low of November 2016, while NVIDIA’s shares will go up to $200. The margin of safety “green” is generally higher due to gaming preferences.

It is no secret that now in the world with the prices of video cards is very bad, and with the availability of the problem. Of course, the most budget cards are everywhere and at almost normal prices, but we are not interested in them.

For example, on Amazon for GeForce GTX 1080 Ti ask from 1000–1100 dollars or more. The recommended price of 700 bucks? No, not heard.

Last year there was a situation that lasted for about six months, after which the prices went down. However, with the next jump of bitcoin and other cryptocurrencies, the deficit and wild prices returned. And analysts were inclined to believe that earlier next year normalization can not be expected.

However, gamers have a hope… and the miners are the reason of nail biting. According to sources, the company has already developed Bitmain ASIC (integrated circuit for special purposes), designed exclusively for the extraction of Ethereum cryptocurrency. As you know, “ether” is the most popular among miners using video cards.

As soon as systems based on such ASICS are put into operation, the effectiveness of mining “ether” on the GPU will begin to decline, and in the end it will lose all meaning, as at the time happened to bitcoin. The supply ASIC will begin in the second quarter. However, initially they will be limited, as Bitmain will leave the lion’s share of chips for their needs, but it will not last long, and soon the market will flood with special miners for the “ether”. But that’s not all. Sources say that at least three other companies are developing similar ASICS.

High efficiency of these chips will force owners of “farms” to get rid of GeForce and Radeon graphics cards, as well as cryptocurrency accelerators based on NVIDIA and AMD graphics cores.

Susquehanna specialists made a trip to Asia to study the prospects of appearance of ASIC for Ethereum in the near future.

First batches of chips to customers

How did you find the group of analysts during the trip, the decision authored by Bitmain — manufacturer of 70–80 % ASIC for Bitcoin mining — has been developed.

Deliveries of the first batches of chips to customers are scheduled for the second quarter. Following Bitmain, according to Christopher Roland, at least three other Developers will release their specialized Ethereum mining chips.

Susquehanna is not yet ready to name the exact figures reflecting the superiority of Asian Bitmain over NVIDIA GeForce and AMD Radeon, but it seems that the purchase of video cards for Ethereum production will soon lose all meaning.

At the same time, the complete abandonment of the GPU in mining is not anticipated due to the existence of cryptocurrencies, successfully mined on graphics adapters at home.

In any case, American analysts are confident in a significant decrease in the sales of Radeon cards and GeForce cryptocurrency miners. On the assessment of the Susquehanna, the implementation of the GPU to calculate the virtual coins Ethereum today brings AMD about 20 % of revenue, and NVIDIA — 10 %.

Conclusions

Accordingly, after the terrible competition of graphics adapters from Asia, the demand for Radeon will drop the most, and all this against the background of AMD’s significant lag from NVIDIA in the segment of high-end gaming accelerators.

According to Roland, the AMD stock exchange rate in the foreseeable future will fall to $7.50 per unit, reaching a minimum since November 2016, while NVIDIA shares will rise to $200. NVIDIA’s margin of safety is generally higher due to gaming preferences.

Helios GPU Solutions

You probably might notice that all business model of HeliosCoin is base on ASICs miners. But we decided to change it.

In a close cooperation with leading mining equipment company, we decided to create a unique immersion GPU rigs. It will be very flexible, affordable, and will have huge scalability. It will help us to solve the problem of “dying” mining equipment and lets us mine constantly with GPU flexibility.

Now we already made it. We are on the final stage of our Immersion GPU RIG development and soon it will be released for mass orders and our clusters as well.