Shares of GPU makers Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD) havegotten a shot in the arm recently thanks to a resurgence in the cryptocurrency mining market. <\/p>\n
But what's behind the recent boost in cryptocurrency mining demand? It's coming from China and Eastern Europe, where miners of an alternative cryptocurrency called Ethereum are buying desktop graphics cards in droves, according to analysts. Mining is the process of verifying cryptocurrency transactions, at which point the transactions are added to the public ledger, called the blockchain. New cryptocurrency is created every time a transaction is verified, and those mining it make money whenever they do so. <\/p>\n
The growing cryptocurrency mining market has contributed $100 million worth of GPU sales for Nvidia in the last 11 days alone, according toRBC Capital Markets analyst Mitch Steves.The demand has led to greater confidence on Wall Street that Nvidia and AMD will be able to rise above a seasonally weaker fiscal second quarter. <\/p>\n
Shares of AMD were rising 2.7% to $14.36 on Thursday afternoon, after climbing 16.9% in the past five trading sessions. Nvidia stock was down 0.3% on Thursday but has advanced 6.5% in the past five days. <\/p>\n
There is a frequent misconception that GPUs are primarily used to mine Bitcoin, the more common cryptocurrency, but in recent years, people have switched to ASICs chips because Bitcoin requires more powerful processors.Any time a bitcoin is mined, it gets harder and harder to mine the remaining ones,said Bernstein analyst Stacy Rasgon. Users will build small, high-end computers and download programs to mine the currrency, which means that the GPUs are usually running all day long. <\/p>\n
As Bitcoins became harder to mine, users began to switch to custom-designed ASICs (application-specific integrated circuit) chips because they needed more powerful equipment that could run the mining programs and still make a profit. If miners used GPUs to mine bitcoin, they would spend more money on electricity than they would make in profit, said RBC analyst Mitch Steves. <\/p>\n
Ether, meanwhile, was designed to consume less electricity and tobe mined via GPUs. <\/p>\n
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Why Nvidia and AMD Continue to Ride the Cryptocurrency Mining Wave - TheStreet.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Shares of GPU makers Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD) havegotten a shot in the arm recently thanks to a resurgence in the cryptocurrency mining market. Continue reading