Graphics card producer Nvidia is creating distinct lines of compromised graphics cards, each specifically for gaming or crypto mining.

The next generation of Nvidia graphics processing units (GPU) will include GeForce RTX 3080 Ti, and the RTX 3070 Ti. However, these graphics cards have had some of their capabilities deliberately compromised. This way, they can only effectively be used by gamers and not cryptocurrency miners. 

Nvidia will also be producing specific crypto-mining processors (CMPs), which aren’t as sophisticated as normal graphics cards. The graphics card producer is pursuing this strategy to avoid its past experience with a crypto market cycle.

During the previous crypto boom of 2017, Nvidia saw crypto miners devour its supply of graphics cards. It ramped up its production to accommodate for this demand. However, as the price of crypto swelled, miners moved on from graphics cards to more specialized custom chips.

This left them with an abundance of unsold inventory, a position compromised further by a flood of used cards into the second-hand market.

As a consequence, Nvidia had to cut its annual sales forecast to $2.7 billion, in November 2018. This was a drop of $700 million compared to analysts’ estimates. This then caused investors to abandon the stock, which resulted in a loss of 20% over two days.

To avoid a similar boom and bust, Nvidia is discriminating its production between its different markets. For its graphics cards intended for gaming, Nvidia has limited the hash rate, which makes them inefficient for mining. Meanwhile, it has also introduced CMPs. Because they can’t be used for conventional graphic-related tasks, they will not flood the GPU secondary market.

Additionally, because they are less sophisticated than GPUs, Nvidia can use the rejects from its graphics card production to create CMPs. Usually, chips deemed unfit due to a fabrication or functional flaw would be discarded. Now, because they don’t need their full capabilities to be useful for mining, the company can repurpose them. 

Now, Nvidia just needs to determine the sizes of each of its markets. Previously, it has been unable to determine how many of its chips went to gamers or miners. Meanwhile, Jon Peddie Research, which tracks the graphics card market, estimates 25% of add-in graphics cards shipped in Q1 2021 went to miners. This amounts to roughly 700,000 cards, valued at $500 million.

The post Nvidia Creating Crypto Specific Graphics Card to Avoid Boom-and-Bust appeared first on BeInCrypto.

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