Bonanza Mine is an application-specific integrated circuit (ASIC) for Bitcoin miners, announced as part of a wider blockchain roadmap which Intel launched last week. ASICs are chips designed to carry out a particular task, and Intel claims it offers 1000x better performance per watt of energy compared to mining with a GPU. How its performance compares with other ASICs on the market remains to be seen.

“We are mindful that some blockchains require an enormous amount of computing power, which unfortunately translates to an immense amount of energy,” said Raja Koduri, senior vice president and general manager for accelerated computing systems at Intel. “Our customers are asking for scalable and sustainable solutions, which is why we are focusing our efforts on realising the full potential of blockchain by developing the most energy-efficient computing technologies at scale.”

Gelsinger reiterated the company’s position in an interview with Bloomberg yesterday, stating: “A single ledger in Bitcoin consumes enough energy to power your house for almost a day – that’s a climate crisis. If we produce the tech that consumes that much energy, wow, that’s not okay.”

Why is Intel getting into Bitcoin?

Bitcoin mining is a process which checks and verifies transactions on the digital currency system. Miners are rewarded for their work with new Bitcoin. This process is complex and notoriously energy-intensive, and can be carried out using general-purpose GPUs, such as those manufactured by Nvidia and other companies, or ASICs.

“ASIC devices are by far the most common way to mine Bitcoin commercially,” says Dr Richard Jenkins, product development manager at Nexalus, developer of a novel cooling system for chips including ASICs. “A GPU or CPU in a PC can mine Bitcoin, but these are no longer viable in terms of cost, efficiency, and performance. Therefore, ASIC miners are the choice of any business mining Bitcoin commercially today.”

More than 20 companies already develop Bitcoin ASICs, with Chinese company Bitmain and US-based Whatsminer producing the leading systems on the market. But Intel is the first of the major players in the system to take an interest.

Current products have a “high failure rate”, says Jenkins, so a reliable ASIC from Intel could be a hit with miners. “The Bitcoin mining space has never had such a well-established brand such as Intel making ASICs,” he says. “Intel manufactures reliable, high-quality, well-designed and efficient products in the high-performance computing space, so if their ASIC follows the past performance of their other products it is possible for them to take a large market share.”

Grabbing a large market share is probably what Intel is banking on, says Mike Orme, who covers the semiconductor market for GlobalData. “The crypto-mining business isn’t going to shrink,” Orme says. “If the Intel ASIC seriously reduces the power draw involved in mining it will be on to a winner.”

Orme believes Intel could undercut rivals such as Bitmain, which gets its ASICs produced by Taiwanese chipmaker TSMC, because it can do manufacturing on its own well-established, in-house process nodes. “It doesn’t have to get these ASICs, which are typically 14nm jobs, made by a foundry,” he says. “It can knock them out itself.”

Intel has already announced several customers have signed up to its roadmap, including leading blockchain miners GRIID and Argo Blockchain, as well as Block, the digital payments company run by Twitter founder Jack Dorsey. “Dorsey at Block, among others, seems to buy [Intel’s] energy-saving, cost-saving story,” Orme adds.

Bonanza Mine ASIC: can it cut Bitcoin’s carbon footprint?

While the Bonanza Mine ASIC is likely to offer better value than anything else on the market, whether it will impact the heat emissions is less certain.

Dr Jenkins says that previous innovations in this area have not led to significant changes in the amount of heat generated by Bitcoin mining. “These kind of efficiencies alone are only a short-term solution and won’t solve the energy or CO2 issues associated with the Bitcoin network,” he says. “History has shown that even with a 1000x improvement in efficiency from CPUs to ASICs, the power demand of the network has only continued to grow, with no capability of thermal energy recovery.”

Bitcoin is currently on track to consume 147.67 TWh of electricity this year, according to the Cambridge Bitcoin Electricity Consumption Index, produced by the University of Cambridge’s Centre for Alternative Finance (CCAF). This means its power consumption is greater than many countries around. Argentina, for example, consumed 121twH in 2021. Last year the CCAF said Bitcoin would have been in the top 30 countries in the world by electricity consumption.

Alex de Vries is a researcher and founder of Digiconomist, an online platform which tracks the unintended consequences of emerging technologies. He has published several papers on the carbon footprint of Bitcoin, and is sceptical that Intel’s intervention in the market will be beneficial from an environmental perspective. “With Bitcoin, the only thing that matters to miners is how much money they make,” he says. “They’ll spend a certain proportion of that money on energy. So if you give them a machine that is twice as efficient, that just means they have money left over to buy more machines.”

This marks Bitcoin mining out as different to other markets in which Intel operates, De Vries says. “If you look at an area like data centres, they have been pretty stable [in electricity consumption] over the past few years due to the very fact that chips are improving and you can get more computational power for the same amount of energy,” he says. “So you don’t necessarily need to spend more energy. Bitcoin is different: there’s an incentive to use more energy if you can because you will be rewarded, and I think that’s a misunderstanding [from Intel] of how mining works.”

Indeed, far from making Bitcoin mining greener, De Vries believes adding a new ASIC into the mix could add to e-waste. “ASICs are highly specialised equipment,” he says. “They are only good for one job, and once they are no longer generating a profit it’s pointless to even turn them on.”

A research paper by De Vries and Christian Stoll, titled Bitcoin’s growing e-waste problem‘, highlights that the industry generates more than 30 metric kilotons of e-waste each year, with the average life cycle of an ASIC being less than 18 months. “The technology moves fast in this area,” he says. “So if Intel puts a new piece of equipment out there that is more powerful than anything else, everyone will want to have it because the first people to get it will make more profits. This happens with every generation.”

In short, De Vries believes Intel’s intervention in the market is unlikely to lead to greener Bitcoin. “The main effect of Intel coming up with a new ASIC will be more electronic waste,” he says. “Electricity consumption is likely to remain broadly the same.”

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