With the cryptocurrency revolution well underway, millions are seizing on the opportunity to invest in blockchain technology. No-doubt cryptocurrency has been profitable to many and has the potential to bring vast sums of wealth to many more. Overlooked, however, are ancillary industries that are also profiting from the crypto boom. One such industry is the hardware manufacturers, which have enjoyed significant growth and profit as cryptocurrency use has intensified.
Most cryptos incorporate a proof-of-work (POW) model for mining, which requires computers, and more commonly mining pools, to compete against each other for coin blocks. This has created an arms race for processing power. Demand for the chips, and other hardware, needed to successfully mine crypto has thus skyrocketed. The increase has been particularly notable over the past few months, as Bitcoin and many altcoins have experienced huge growths in fiat value.
The growth in mining has resulted in significant profits for hardware manufacturers. Nvidia, for example, has seen its market value increase by 180% in the past twelve months amid very strong sales. Advanced Micro Devices (AMD), which was struggling a year ago, has had a very profitable Summer. AMD posted a $25 million profit in the second quarter of this year. Q3 earnings, which will be announced soon, are rumored to be even better. Both companies have seen increased stock prices as well.
The demand for mining hardware has become so strong that shortages have emerged; some manufacturers have even acknowledged that they cannot make mining processors fast enough. The most advanced GPU graphics cards, which are most effective at crypto mining, sell out within minutes of release. It is not surprising that prices have risen substantially to reflect this demand.
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