- Nvidia has raised its Q1 2022 revenue estimate for its new crypto mining-centric product to $150 million.
- According to the chipmaker, the overall demand for its products remains very strong.
Chipmaker Nvidia has raised its 2022 first-quarter revenue estimate from the sales of its new cryptocurrency mining processor (CMP) to $150 million, up from the previously expected $50 million, the company announced on Monday, April 12.
Nvidia’s new CMP was first announced in February this year and is principally designed for industrial-scale mining of(ETH), the second-largest cryptocurrency by market cap.
The projection comes amid soaring global demand for graphic chips during the COVID-19 pandemic, with Nvidia saying that its overall first-quarter revenue, including CMP sales, will be above the earlier forecast of $5.3 billion.
“Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean,” said Colette Kress, Nvidia’s chief financial officer, in a statement accompanying the announcement. “We expect demand to continue to exceed supply for much of this year.”
Dammit Chinese mod 🤣🤣 pic.twitter.com/dBNjpJQLMl
— I_Leak_VN (@I_Leak_VN) March 10, 2021
But chip shortages have meant that crypto miners have even resorted to gaming laptops to wring out extra hash rate and benefit from bull-run profits. So, for some, it wasn’t so surprising when screenshots, posted by the Twitter account @I_Leak_VN, suggested that enterprising Chinese Ethereum miners had found a way to bypass the restrictions.
Later it transpired that the screenshots weren’t of Ethereum, but another blockchain altogether. Mining experts said that only an Nvidia insider would be able to make the changes needed. However, since then experts from industry publications PC Watch, Computer Base, and Hardwareluxx have debunked their claims, revealing that a recent Nvidia beta driver release bypasses the manufacturer’s hash rate limits.
— The Verge (@verge) March 15, 2021
Meanwhile, Nvidia’s rival AMD is reportedly developing its own dedicated mining chipset too; the latest version of the AMD Navi 12, initially used for the Apple Macbook Pro. It has no video outputs (which are mandatory for gaming) according to PC Gamer. That means the GPU could be the first crypto mining-related specific processor launched by the company, and it specifically targets Ethereum miners.
These recent moves by both AMD and Nvidia signal attempts to segregate GPUs used for crypto mining, from those used for gaming. But not everyone believes that’s the strategy the multinational should be following.
Ethereum mining revenues soar
Earlier this month, Nvidia won a landmark lawsuit, which dismissed investors’ claims that the chip manufacturer hid its reliance on its burgeoning cryptocurrency mining business to the tune of more than $1 billion. The action was initiated two years ago by investors concerned that Nvidia’s profits were becoming too closely entwined with the volatile cryptocurrency market. But their claims were dismissed due to a lack of evidence that the company misled anyone.
Now, the situation is somewhat different. A surge in the popularity of crypto mining followed’s decision to integrate cryptocurrencies and high-profile investor interest. This contributed to a significant surge in GPU sales in Q4 2020, with GPU shipments rising by 20.5% quarter-on-quarter and by 12.4% over Q4 2019, according to a report published this month.
Analysts, Jon Peddie Research (JPR), who are behind the report, claimed that mining, specifically on the Ethereum network, played a sizeable role.
This year, Ethereum network fees earned by miners more than doubled, even from last year’s peak during the craze for decentralized finance () last summer, and miners saw their revenue triple. No other cryptocurrency comes close to Ethereum for mining profitability right now, according to mining experts.
The fees are too damn high!
Ethereum miner revenue has tripled previous highs reached during this summer's DeFi boom pic.twitter.com/isom1cYavk
— Messari (@MessariCrypto) March 4, 2021
The flip side of this success was that an average transaction fee reached $38.21 on Feb 23, making the network unviable for smaller transactions (and impacting on activity in the burgeoning DeFi space). Ethereum’s ongoing upgrade,, is designed to mitigate those concerns.
In the meantime, Ethereum cofounder Vitalik Buterin has proposed interim scaling measures. Some community improvement proposals have not gone down well with miners, who fear a reduction in their fees of as much as 50%. A new proposal, EIP-3368, would see block rewards reduced by 0.25 ETH every quarter, helping to ease the impact of Ethereum’s transition to proof-of-stake on miners.