Global electronics giant Samsung is getting in on the cryptocurrency craze by developing signature Bitcoin blockchain mining technology.
The South Korea-headquartered electronics corporation is currently developing faster, durable and more reliable blockchain-mining computer chips.
Bitcoins are created on computers via blockchain mining, which is a complicated, hardware damaging, extreme heat generating and environmentally taxing process.
Thus there is a growing demand among cryptocurrency speculators, investors and fanatics who want more efficient methods to mine for Bitcoins.
Some avid video gamers are actually dismantling their gaming systems to remove and repurpose the system’s graphic cards. The graphic cards can be technologically reengineered to mine for the cryptocurrency Ethereum.
By trying to cater to such a growing market of DIY cryptocurrency miners, Samsung is hopeful of supplying this demand.
Samsung will be custom adapting its brand of ASIC, or “application-specific integrated circuit” computer chips to perform complex blockchain mining algorithm computations.
These computer chips can be altered, adapted and functionally repurposed for various computing purposes.
Blockchain mining for Bitcoins involves using computers to solve increasingly difficult mathematical equations. As each equation is solved, the “miner” receives Bitcoins as a reward.
The process is recorded in a public ledger. Bitcoins can only be created online.
Blockchain mining requires and uses up a lot of electricity. Unless a Bitcoin miner is appreciably profiting from their efforts, then energy bills that pay for Bitcoin mining may actually be higher than the value of awarded Bitcoins.
The process of blockchain mining also generates a lot of heat, which damages and can destroys computer chips and computer hardware.
These side effects of blockchain mining is what got Samsung into the building a better blockchain chip.
“Samsung’s foundry business is currently engaged in the manufacturing of cryptocurrency mining chips,” the company said in a release. “However, we are unable to disclose further details regarding our customers.”
Creating, testing and releasing a new chip will be an expensive endeavor that the company is banking on succeeding.
Considering Bitcoin’s wild and volatile valuation ride on global financial markets, however, Samsung seems to be taking a gamble trying to develop a viable business model around blockchain mining.
Analysts believe that Samsung will not see any appreciable profit from its efficient mining chip soon, since mining is a very new and slowly growing market.
“I think the impact from new business is still very small,” said K. Kim, a financial analyst for Japanese investment bank Daiwa.
Kim believes that Samsung’s mining chip venture, when it is fully operational, will generate less than 1% of the company’s annual revenue.
Samsung reported revenues of more than $224 billion dollars in 2017.
The Korean chip giant recently passed Intel as the world’s largest manufacturer of computer chips in terms of revenue generation.