In a bid to capitalize on the run in cryptocurrencies, graphics chip giant NVIDIA Corporation (NASDAQ: NVDA) unveiled Thursday a new chip to be used exclusively for mining.

What Happened: Nvidia unveiled the Nvidia cryptocurrency mining processor, or CMP, product line for Ethereum mining, the company said in a blog post. Ethereum is the second-largest cryptocurrency after Bitcoin and is currently perched at a record high above $1,900.

The GMP products are meant for professional mining and do not meet the specifications required of a GeForce gaming GPU, Nvidia said. They will be available for sale through authorized partners.

These chips, the company said, are optimized for the best mining performance. They lack display outputs, allowing improved airflow and the scope for dense packing. Additionally, they have a lower peak core voltage frequency to improve mining efficiency.

“With CMP, we can help miners build the most efficient data centers while preserving GeForce RTX GPUs for gamers,” the company said.

As part of the initiative, Nvidia said it has taken measures to downgrade the performance of its GeForce RTX 3060 graphic chips, due for launch Feb. 25, so that it’s less viable for mining.

“RTX 3060 software drivers are designed to detect specific attributes of the Ethereum cryptocurrency mining algorithm, and limit the hash rate, or cryptocurrency mining efficiency, by around 50 percent,” the company said.

Related Link: What is Cryptocurrency Mining?

Why It’s Important: Not too long ago, chipmakers such as Nvidia and Advanced Micro Devices, Inc. (NASDAQ: AMD) derived a substantial amount of revenues from mining chips.

A lawsuit filed in 2017 alleged that about 60% to 70% of Nvidia’s GeForce revenues in China were from sales to crypto miners and not gamers.

As these digital currencies fell out of favor with investors in the subsequent years, mining revenues of the chipmakers tapered off.

A logical extension of the resumption in crypto rally is increased mining — a term used to refer to adding transactions to blockchain, which entails verifying and securing transactions. It requires a computer with superior processing power and a special program for solving complicated mathematical problems to validate transactions.

At last check, Nvidia shares were down 1.35% to $588.19.

© 2021 Benzinga does not provide investment advice. All rights reserved.

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