Intel ships crypto-mining ASIC at the worst possible time

Intel ships crypto-mining ASIC at the worst possible time

Comment Intel has begun shipping its cryptocurrency-mining “Blockscale” ASIC slightly ahead of schedule, and the timing could not be more unfortunate as digital currency values continue to plummet.

Raja Koduri, the head of Intel’s Accelerated Computing Systems and Graphics group, tweeted Wednesday the company has started initial shipments of the Blockscale ASIC to crypto-mining firms Argo Blockchain, Hive Blockchain and Griid:

Intel AXG Custom Compute team is now shipping the Blockscale ASIC! First product will always be unforgettable, congratulations team👍 Excited to see how @ArgoBlockchain @griid and @HiveBlockchain improvise around Blockscale and our open design.

— Raja Koduri (Bali Makaradhwaja) (@RajaXg) June 29, 2022

Blockscale is shipping a couple days ahead of Intel’s previously stated release window for the third quarter, which begins Friday. Even if it’s a tiny head start, it is nonetheless an achievement for a corporation that is becoming notoriously under-schedule across multiple products, including the Sapphire Rapids server chips and the discrete Arc GPUs.

In this case, however, Intel is the victim of much larger forces beyond its control. The Blockscale ASIC – that’s Application-Specific Integrated Circuit, typically a chip designed to be good at a very particular task, such as facilitating blockchain transactions – is arriving at a time when many cryptocurrencies have been on the decline for the past few months.

Bitcoin, for instance, has dropped 60 percent in value from the beginning of the year and, for a second time this month, dipped below $20,000 in value today, a grim marker for a digital currency that went as high as $64,000 over the past couple years.

Experts and company officials are warning that the world of blockchain-fueled digital currencies is entering a crypto winter, a period where the value of virtual coins plunge and remain low. This last happened between early 2018 and mid-2020.

The cryptocurrency sell-off has happened in the face of continuing inflation and increased interest rates, showing that digital currencies are aligned with the stock market’s downswing.  

The specter of a crypto winter settling in has prompted some to sell their crypto-mining equipment, which, luckily for gamers, means that supply and pricing for GPUs is better than it has been for a while. But the graphics accelerator glut is only good news for consumers who haven’t tightened their budgets.

Crypto-mining companies have also felt the squeeze from plummeting digital currency prices, which, combined with rising energy costs, have prompted them to liquidate a chunk of their crypto stashes.

“The plummeting profitability of mining forced these miners to increase their selling rate to more than 100 percent of their output in May. The conditions have worsened in June, meaning they are likely selling even more,” said Jaran Mellerud of Arcane Research, according to Reuters.

This is all to say that Intel has started to sell its crypto-mining Blockscale ASIC, which accelerates SHA-256 hashing, at a time when the macroeconomic situation is rough.

While critics continue to question whether cryptocurrencies have any intrinsic value at all, Intel has painted itself as somewhat of an environmental savior for the crypto-mining market. This is because the company claims its Blockscale ASIC is much more energy efficient than GPUs for proof-of-work cryptocurrency mining.

The question now is whether Blockscale itself can weather this crypto winter and keep Intel CEO Pat Gelsinger happy as he faces pressure on multiple fronts to enact his ambitious comeback plan. ®

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