It’s true that cryptocurrency mining is nothing new. Back in 2018, we reported on Bitcoin’s (the reigning cryptocurrency to date) then decade-long history—and how spiking valuations kicked off the mining craze.
While Bitcoin mining was accessible to individuals early on, large-scale miners are reaping the most rewards. Russia, China, the United States, and even Iceland have served as major crypto mining centers.
Cryptocurrency mining has spiked as farms have transitioned from CPUs to GPUs to ASICs. Image used courtesy of CoinDesk Research
The proliferation of cryptocurrency farms (large facilities housing specialized hardware) has uniquely strained the semiconductor industry. A single farm requires hundreds, if not many thousands, of semiconductors. That incurs massive electricity charges.
Today, Chinese cities like Dalian lead the way in terms of cryptocurrency mining power consumption. One of the country’s (and world’s) largest mines has a capacity of 360,000 tetrahashes (TH)—or 360,000 trillion calculations. It costs $1,170,000 monthly just to power this operation. It’s no wonder why these farms are hard on microprocessor supply chains.
The Role of Mega Fabs
GPUs, CPUs, and ASICs (application-specific integrated circuits) are integral to mining. With COVID-19 interrupting fabrication throughout 2020, the available chip supply has diminished. Meanwhile, mines have expanded.
CPUs have long been underpowered for mining tasks. GPUs fair better. However, high-powered ASICs are now designed specifically for crypto hashing. They also offer exceptional performance per watt. Mining collectives—including the Genesis Group—mainly leverage 7nm