Bitcoin hit the headlines at the end of 2020 after breaking its all-time record price and surpassing the $20K mark. But the price has continued to break records, and the cryptocurrency was trading at around $50,000 at the beginning of March 2021.

There have been many beneficiaries of the cryptocurrency gold rush of the past few years, and one is the graphics processing unit (GPU) industry. As a vital component for mining computers to efficiently solve hashing algorithms, GPUs have become a premium commodity, leading to a scarcity in supply and a spike in prices for even lower-tier graphics cards.

This has created a complex situation that has left many sectors without access to technology vital for their work. In addition, consumers have seen supply shortages and heavily distorted prices. Even so, the market is booming, and blockchain is largely to thank. Without GPUs, it would be significantly harder and take substantially longer to mine coins. However, the relationship seems to be a two-way street. Now, new blockchain applications are offering new use cases that could continue driving GPU prices higher while simultaneously sustaining demand at current levels.

The introduction of computing power as a service, and especially on the blockchain, is redefining computer usage. With blockchain’s ability to incentivize participation, companies that offer GPU-as-a-service are encouraging users to create GPU pools that can be monetized or convert their mining rigs as they replace GPUs with ASIC mining tools. Whatever the case, the GPU will continue its upward trajectory, propelled by blockchain.

A Growing Problem

The cryptocurrency boom has made mining an incredibly profitable endeavor, even as the difficulty of mining continues to increase exponentially. What was once possible with a single computer now requires large operations with hundreds of computers networked and pooling processing power to solve hashes more effectively. Additionally, regular CPUs do not have the dedicated memory capacity to process hashing algorithms quickly enough. GPUs, on the other hand, have built-in dedicated memory that makes them ideal for mining.

The need for bigger and faster mining computers has created a serious problem in the GPU and computer components markets as miners rush to purchase every available GPU as quickly as they can. Prices have skyrocketed for even lower-tier graphics cards, and many stores and retailers have even had to establish measures to prevent single users from buying out their supply. Nvidia’s GeForce GTX 1070 had a suggested price of $690 in Jan. 2021, and Nvidia’s GeForce GTX 1070Ti, for example, is out of stock. Similar mass shortages have affected retail users and even academia, where scientists require heavy processing power for advanced studies such as astronomy, genetics, and mathematics.

The industry also sees no end to the status quo. Industry experts predict GPU prices will continue to rise, and business is booming for major GPU makers like AMD and Nvidia.

In Feb. 2021, Nvidia showed record quarterly revenue helped by the COVID-19 epidemic that fueled demand for its products. The GPU market is expected to continue growing for the foreseeable future. The global GPU market size was valued at $19.75 billion in 2019, and is expected to reach $200.85 billion by 2027, a growth rate of over 33% from 2020 to 2027 as GPUs are becoming valuable to blockchain.

Blockchain Optimizes GPU Usage

Outside of mining, blockchain and GPU represent an ideal coupling. The former’s distributed networks offer users a new way to conceive of computing power, leveraging the sum total of its users to create "virtual supercomputers" that rely on the collective power of the network. Moreover, there is an increasing demand for computing-as-a-service, evidenced by the growing popularity of cloud computing and the GPU-as-a-service market.

Several tech giants already offer these services, though they remain fully centralized, and thus somewhat inefficient. Google Cloud offers GPU services, as does Amazon Web Services, and even Nvidia has started delivering solutions. Now, several blockchain-based platforms are ready to compete by employing a model that relies less upon central control by focusing instead on more democratized networks.

Online rendering firm Leonardo Render, for example, is already planning big things using blockchain. The company offers real-time rendering services by leveraging its network’s GPU power to offer users fast and low-cost tools. The company already counts upon 23,000 GPUs thanks to its partnership with GPU hosting giant Giga-Watt, in an effort to help creatives and agencies scale their graphic turnover.

Similarly, Golem uses blockchain to combine its users’ spare computing power to create a virtual supercomputer. The company plans to make it accessible to all, though it is still in initial phases, so its impact on the market has not yet been grasped. Others like OTOY are converting their services to the blockchain to continue enhancing their offerings.

GPUs For Cyptocurrency Miners

In January of 2021, the CFO of Nvidia suggested that the company was considering restarting the production of dedicated graphics processing units (GPUs) for cryptocurrency miners, which are called CMPs. CMPS are GPUs without video output, so they are cheaper to produce. Although cryptocurrency mining is not expected to be a major source of demand for Nvidia' products, the gaming sector is, and restarting CMPs would allow the company to meet the demand for gaming GPUs.

A Future Boom

As the price of physical components continues to soar—something that seems likely as mining remains as popular as ever—more regular users will be faced with the need to access GPU computing power with no physical solution.

Blockchain allows the GPU industry to collectively revolutionize its sales model, deprioritizing retail sales and creating massive networks that users and companies can leverage to unleash unparalleled processing and power. As GPUs are replaced by components like ASICs, used for bitcoin mining, the flood of used components may even make it profitable to continue using them for a different, albeit blockchain-related, network.