Intel is designing a custom chip for digging up bitcoins and other cryptocurrencies.

Intel

Intel will start selling a chip customized to dig up bitcoins and other cryptocurrencies later this year, the company said Friday. Initial customers include Payment Processor Block (formerly Square) and two mining companies, Argo Blockchain and Griid Infrastructure.

This is a key bet for the company on a technology that can change finances and, with the idea of ​​a cryptocurrency called NFT, change the way we own digital assets. Cryptocurrencies and NFT are plagued by fraud and theft issues, but Intel hopes to tackle another major drawback, their extremely high power consumption.

With cryptocurrencies, mining is a computational process that records transactions in a widely shared database called a blockchain. The first miner to solve a complex computer problem was rewarded with a newly minted cryptocurrency. This means that there is a strong incentive to have the most powerful machines – and also the most efficient, because the cost of electricity is high.

One of Intel’s biggest competitors, graphics chip maker Nvidia, has made significant profits from digging for cryptocurrency. In fact, miners’ appetites for its GPUs make it difficult for gamers to find graphics cards. But major cryptocurrency mining hardware vendors, such as Goldshell, MicroBT and Bitmain, use processors called application-specific integrated circuits (ASICs) customized for mining.

Cryptocurrency mining uses huge amounts of energy, with a current estimated speed of 125 terawatt hours per year, according to the University of Cambridge’s Bitcoin Electricity Consumption Index. By comparison, this is as much as electricity consumption in 2020 in Norway, a nation of 5.5 million people, according to the Energy Information Administration (EIA).

And that doesn’t even involve digging up other cryptocurrencies like ether and dodgecoin.

Intel hopes that its chip will help with the problem of energy consumption.

“We are aware that some blockchains require a huge amount of computing power, which unfortunately translates into a huge amount of energy,” said Raja Koduri, senior vice president of Intel’s Accelerated Computing Systems and Graphics Group, in a blog post. “Our customers want scalable and sustainable solutions, which is why we are focusing our efforts on realizing the full potential of the blockchain by developing the most energy-efficient computing technologies on a large scale.”

Increasing efficiency can help miners reduce costs and reduce energy consumption, which exacerbates the global climate crisis and deprives others of affordable energy. But do not expect a radical improvement in the environmental impact of mining.

This is because the prevailing “proof of work” approach to cryptocurrency means that the difficulty of the computational problem that miners have to solve is increasing as more computing horsepower arrives to solve it. This is in stark contrast to conventional computing, where increased power and efficiency mean computers can deliver better graphics for video games, meet new challenges such as artificial intelligence, and expand into new markets such as smartwatches.

And ASICs are inherently designed for a specific purpose, which in the case of cryptocurrency diggers means they are useless once they are replaced by new models. Bitcoin mining currently generates e-waste at a rate of 31,000 tons per year, according to Digiconomist’s Bitcoin E-waste Monitor.