Nvidia graphics card mining restrictions have been cracked, are professional mining chips still popular?

Source: Blockchain Outpost

Compiled by Joyce and Nuka-Cola

The cracking of the mining restrictions seems to have overcome the constraints imposed on various mining software in one fell swoop.

Nvidia GeForce RTX 3060 now included in the "mining family bucket"

Last week, it was reported that, contrary to Nvidia's claim that it was "impossible to crack," the Ethereum mining limit on the GeForce RTX 3060 had been invalidated. Screenshots that flooded major technology forums at the time showed that the 3060 graphics card could only mine other cryptocurrencies (such as Ravecoin) instead of being actually cracked. These tokens generally use different algorithms than Ethereum, so their hashing operations are not restricted by Nvidia.

This week, at least three sources claimed that the mining limit had been breached, but that hashing performance would not double in the short term.

In response, an Nvidia spokesperson confirmed the news: "A development driver inadvertently included code for internal development that removed the hash limiter for the RTX 3060 in certain configurations."

Although Nvidia has now removed the driver, Nvidia will not be able to prevent RTX 3060 owners from continuing to use this driver in the future. Nvidia's latest 470.05 beta driver can automatically unlock the performance of most RTX 3060 cards and increase the hash rate for Ethereum mining. Mirrors of the driver can be easily found online.

8 minutes of Ethereum mining completed with RTX 3060. Image source: PC Watch

The cracking of the mining restrictions seems to have overcome the constraints of various mining software in one fell swoop. Phoenix Miner developers also announced similar news on GitHub. They said that they are making a large-scale update to the Nvidia kernel and there are "encouraging signs that the hash lock mechanism of RTX3060 is expected to be partially lifted."

The Phoenix Miner development team uses RTX 3060 for Ethereum mining. Image source: Github

At present, many netizens have posted pictures and videos on social media to show that the RTX 3060 can achieve a hash rate of more than 40 MH/s in Ethereum mining. A DCInside user claimed that after running continuously for 41 minutes, the 3060 graphics card can still achieve an Ethereum mining performance of more than 40 MH/s.

Using RTX 3060 for Ethereum mining, image source: DCInside

There are also reports that using a specific Nvidia WSL driver (470.05 Beta) can remove the Ethereum mining performance limit, but so far this has not been confirmed.

Nvidia imposed a hashrate limit on the RTX 3060 in February. The company is working on the RTX 3080 Ti and RTX 3070 Ti, which may use the same limit technology. If miners have found a way to break through the limit, then Nvidia's limit may become useless.

Mining machine manufacturers are short of "chips", and the professional mining chip market is opening up

While limiting the mining performance of existing graphics cards, NVIDIA will also launch Ethereum mining products NVIDIA CMP with different specifications. Recently, there are rumors that chip giant AMD may follow NVIDIA's example and launch its own graphics cards for cryptocurrency enthusiasts.

According to a report published by PC Gamer, the Navi 12 GPU launched specifically for Apple’s MacBook Pro could be repurposed to mine Ethereum. The new version of the graphics card does not have video outputs, which means it is not suitable for gaming. This leaves Ethereum mining as its only possible goal.

Public data shows that Bitmain, a major mining machine manufacturer, currently sells products using TSMC's 5nm chips on a large scale. Shenma has been using Samsung's 8nm chips, while Canaan Technology has cooperated with TSMC, Samsung, and SMIC, and SMIC's N+1 chip performance is equivalent to 8nm and 7nm.

Currently, the world is in a chip shortage dilemma. Previously, financial economist Alex de Vries commented in Joule, a journal published by Cell Press, that mining machines compete with personal electronics and electric vehicles for the same chips, exacerbating the global chip shortage.

TSMC, Samsung and other wafer manufacturers are facing a severe shortage of production capacity, and they will give priority to supplying products to industries such as consumer electronics. This has a direct impact on mining machine manufacturers. "There are not enough chips to support the production of mining machines." Alex Ao, vice president of Innosilicon, a leading chip design and mining machine provider, said in an interview with the media.

According to information on Bitmain's official website, by August 2021, the inventory of Bitmain, one of the major Bitcoin miners, had been sold out. In addition to insufficient inventory, the price of Bitmain's mining machines is now very high. It is reported that miners are also willing to pay a higher price to purchase second-hand mining machines. Some people have been purchasing various graphics cards that can mine for a long time, regardless of brand.

Compared with chips used in industries such as mobile phones and automobiles, the design of specialized mining chips is much simpler.

In 2018, after Canaan Technology announced the successful mass production of the world's first 7nm chip, some people in the semiconductor industry commented that the 7nm chip is used in mining machines for single repetitive calculations and is much simpler in design. In mobile phones, a chip has to carry many functions and is much more difficult to design.

As some chip giants begin to design chips specifically for mining, it remains to be seen whether the chip market landscape will change.

Domestic miners face many challenges

But many of the largest companies expanding their mining operations are based abroad, particularly in North America and the Middle East, Reuters reported.

Canadian listed mining company Bitfarms has ordered 48,000 MicroBT mining machines, and its computing power will increase several times in the future, from the current 1 EH/s to more than 5 EH/s. American blockchain company Digihost Technology Inc. (TSXV: DGHI; OTCQB: HSSHF) said it has reached a subscription agreement with certain institutional investors to raise approximately 25 million Canadian dollars through the placement of company shares, mainly for the acquisition of more Bitcoin mining machines.

The increase in demand for mining machines abroad is "squeezing supply to China," and China's share of computing power on the Bitcoin network has dropped significantly.

According to a TokenInsight report, China once accounted for 80% of the total global Bitcoin mining activity due to its low disposable electricity costs. However, this figure has now dropped to 50% as institutional investors are actively buying digital assets and demand for Bitcoin has surged.

According to the Securities Times, domestic venture capital institutions have recently accelerated their investment in mining companies. A large number of companies have received financing, but due to the particularity of the industry, most of them are still in the stage where their funds have not yet been disclosed.

The increase in investment costs is accelerating the elimination of small businesses. "Institutional investors have both the advantages of conducting large-scale mining and rich management advantages, and retail investors who cannot keep up will be eliminated," said Raymond Yuan, founder of Atlas Mining.

In addition, domestic miners also face important regulatory issues. Recently, the Inner Mongolia Autonomous Region, one of the main gathering places for miners, issued the "Several Guarantee Measures for Ensuring the Completion of the 14th Five-Year Plan Energy Consumption Dual Control Target Tasks (Draft for Comments)" to achieve energy consumption targets. It plans to comprehensively clean up and shut down virtual currency mining projects and withdraw all of them by the end of April. At the same time, it is strictly forbidden to build new virtual currency mining projects.

If this policy comes into effect, it will be a big blow to miners.

Reference Links:

https://videocardz.com/newz/pc-watch-geforce-rtx-3060-ethereum-mining-restrictions-have-been-broken

https://www.reuters.com/article/us-crypto-currency-china-mining/global-chip-shortage-hits-chinas-bitcoin-mining-sector-idUSKBN29R1AY