Bitcoin mining hardware from Intel Corp. (Nasdaq:INTC) is seen as the first major challenge in years to Chinese companies that have dominated the industry.
The Santa Clara chip maker, which employs 12,000 people at its Chandler campus, recently announced a custom cryptocurrency product group within its new graphics chip business unit as it introduced its first generation BonanzaMine chip. San Francisco-based digital payment company Block Inc. and two mining firms — Griid Infrastructure and Argo Blockchain — are set to get the first ones later this year.
High-performing chips from China-based Bitmain and MicroBT currently have most of the market for the high-performance chips needed to make bitcoin. Bitcoin miners using such hardware earn rewards by using computers to secure the cryptocurrency’s network. The mining industry earned about $15 billion in revenue in 2021, more than double what it scored in 2020.
Part of Intel’s advantage could be more certainty in pricing because of its scale and influence in the industry, industry watchers say. There is also a 25% tariff imposed on imported mining machines from China.
“Having a U.S.-based manufacturer with the size, scale and credibility like Intel is fantastic for the entire crypto industry,” Dave Perrill, CEO of Minnesota-based data center provider Compute North, told Bloomberg. “Competition is a good thing.”
Some important details about Intel’s chips haven’t been disclosed yet, causing some to be skeptical. But they welcome the competition.
“It could take a few years for Intel to catch up with Bitmain on all fronts,” Lei Tong, whose Hong Kong-based Babel Finance provides lending services for bitcoin miners, told Bloomberg. “But Intel’s entry is definitely a good thing for the industry.”
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