Semiconductor titan Intel (INTC) recently revealed its first-generation blockchain accelerator Bitcoin mining chip, the “Bonanza Mine BMZ1,” at the 2022 International Solid-State Circuits Conference (ISSCC), establishing the company as essentially the first global tech giant to enter the Bitcoin mining chip space in earnest.

The belated unveiling of the BMZ1, a SHA-256 application-specific integrated circuit (ASIC) mining chip developed in 2017 and 2018, has led some to speculate that this largely amounts to a proof-of-concept move by Intel ahead of the forthcoming, yet still-secretive, rollout of its second-generation chip, the BMZ2, planned for release later this year.

The BMZ1, which consists of 258 mining engines and operates at an “ultra-low voltage” of 355 mV, will also help constitute a 3,600W ASIC mining rig (Intel’s first ever) comprised of 300 or more BMZ1 chips, with a total system hashrate of 40 TH/s. Many of the specifications of the BMZ2 chip remain undisclosed, although Intel has emphasized its continued commitment to improving mining efficiency standards moving forward, or, as SVP Raja Koduri put it last month, in elaborating on Intel’s blockchain ambitions as well as its Bitcoin silicon program, “developing the most energy-efficient computing technologies at scale… that make our tomorrow better than our today.”

(GEN 1 IS) DEAD ON ARRIVAL

On arrival, the BMZ1 already fits in well behind plenty of existing or upcoming ASIC mining rig options currently available from Wattum, such as Bitmain’s Antminer S19j PRO (3,250W, 96 TH/s), in terms of overall power and relative efficiency. However, Intel claims that its BMZ2 will increase efficiency by 1,000x or more per watt, and promises it will “provide more details soon.”

Intel’s report did divulge details of the BMZ1’s dimensions, including its small die size, which, at 7 x 7.5 mm, serves to increase yield and maximize wafer area usage, allowing for up to 4,000 chips per wafer. Some of the ASIC mining rig’s further energy-efficiency optimizations include 3-phase latch-based clocking for 50% lower clock power, die-voltage stacking for 5% more efficient power delivery, and adjustable power usage profiles such as high-performance, balanced, and power-saving.

CUSTOMERS AND COMPETITORS

In addition to its official announcement at the ISSCC, Intel also recently acknowledged an early supply order from Bitcoin mining company GRIID, which will soon go public through a SPAC merger valued at $3.3 billion, and which has already disclosed via its recent registration statement with the SEC a purchasing agreement with Intel that locks in fixed-price hardware on orders for BMZ2 ASICs placed before May 2023. Other prominent customers already publicly onboard include Jack Dorsey’s Block (SQ), as well as Argo Blockchain (ARBK).

Intel’s ISSCC unveiling broadcasts its undeniable conviction in the future of Bitcoin mining (and, by extension, mining of other proof of work cryptos) and perhaps also serves as a warning of sorts to competitors like MicroBT, Canaan, and especially Bitmain, the Beijing-based mining chip designer that currently dominates the industry.

A NEW ERA FOR MINING INNOVATION?

The precise ramifications of this news for the mining chip industry remain to be fully seen, but the more general implications of Intel’s formal entry into the space already speak volumes, implying not only a significant investment on Intel’s part but also a likely influx of increased competition to follow by the likes of AMD (AMD) and Nvidia (NVDA), among others.

AMD, of course, has engaged in a tech and business rivalry with Intel over the last several years, and will need to answer to Intel’s Bitcoin mining chip ambitions if it hopes to continue its persistent climb in overall market share. Nvidia, meanwhile, a pioneer of the mining chip sphere in its own right, and having already devoted significant resources toward developing its Ethereum-driven cryptocurrency mining processors (CMPs), will likely also follow suit in some form—particularly in the wake of the recent fourth-quarter revenue nosedive of its CMP sales by 77%. Such increased competition would almost certainly not only fuel an arms race of further hardware innovation, but also help drive down current prices.

Are the floodgates opening once again? Bitcoin mining has, in recent years, faced some decreased incentivization by way of its shrinking margins alongside plenty of increased stigmatization for its perceived environmental impacts. Symbolically, at least, Intel’s apparent strategy points perhaps less to any final culmination of a decade-and-more of ongoing mining industry trends, than to merely the beginning of a distinct new era of mining development and disruption, with the planet’s largest computer chip maker—and some of its most formidable competitors as well—now poised to throw their weight around.

No matter where the mining chip industry goes moving forward, the Bitcoin mining experts at Wattum are here to help you better understand your choices for ASIC mining hardware, as well as hosting, pooling, buildout, and payment plan options. Get in touch with one of our sales representatives today to learn more.

(UPDATE: During the writing of this post, a new filing by GRIID with the SEC appears to have disclosed further details of the BMZ2. Though GRIID doesn’t name Intel directly, the details match the previously disclosed supply agreement between the two companies and put the BMZ2 near the top of the market in both performance and efficiency.

At 3,510W and 135 TH/s, the BMZ2 rivals competing models from Bitmain, outperforming the S19j PRO and coming in just behind the S19j XP. At 26 J/TH, it’s also 15% more efficient than the S19j PRO, ultimately improving gross profits by 130%. The BMZ2 triples the performance and doubles the efficiency of the BMZ1 prototype.

In addition, the BMZ2 will be listed at $5,625, around half the cost of the S19j PRO–and at fixed pricing, as opposed to Bitmain’s spot pricing, which fluctuates with the value of Bitcoin. This puts the BMZ2’s price-to-performance ratio at the top of the market. Although Intel is expected to begin shipping the BMZ2 in the second half of the year, it still hasn’t revealed a date.

As the only large US tech company to develop Bitcoin mining hardware thus far, Intel seems ready to capitalize on the ongoing Bitcoin mining migration to the US. As a US-based company, Intel will benefit from other logistical advantages as well, such as averting US–China tariffs and sidestepping some supply chain issues.

This development only further cements the general sense that Intel is aiming high in entering the industry and that things are already heating up quickly. Stay tuned.)