Bitcoin miners are moving to other business ventures, including offering high-performance computing (HPC) services to the fast-growing artificial intelligence industry, according to a JPMorgan research report. The report attributes the move to crypto miners’ desire to reduce their reliance on crypto, enter new business sectors, and access new revenue streams.
Nikolaos Panigirtzoglou, an analyst at JPMorgan, noted:
“With the rapid growth of AI, the increased demand for high-performance computing is now opening a new and perhaps more profitable avenue for utilizing GPUs previously used for ether mining.”
In the migration to AI companies, Bitcoin miners are at the forefront, the bank said. However, Ethereum (ETH) miners also add to the growing statistics. Since Ethereum Merge, there has been a significant increase in the number of graphics processing units available for sale on the secondary market. The GPUs previously used for mining ETH lost their value and usefulness.
The Merge is the transition of the Ether blockchain from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. In POS, validators have to stake part of their digital assets to validate transactions and add blocks to the network rather than using expensive mining hardware.
Many ETH miners sold their GPUs to recover their investment, according to the report. However, others repurposed their computers for video, photo, gaming, and video-making services and mining alternative PoW digital currencies such as Ravencoin (RVN), ergo (ERG), and Ethereum Classic (ETC). Notably, mining of these alternative cryptocurrencies is less profitable due to their uncertain long-term viability and lower market caps.
Also, Bitcoin miners want to spread across different places. Russia has become a prominent player in terms of BTC mining electricity consumption, second only to the US, the report highlighted.
Another Way For Blockchain Firms To Boost Their Revenue
Digital mining companies are mainly moving to AI to increase profits. As per the research report, a number of mining companies have tried out beta tests where they provided HPC services to other firms using some of their equipment.
The test results suggest that offering HPC services to AI firms gives higher profits than BTC mining. This is because mining requires a lot of energy.
Last year, digital assets hit multi-year lows as several assets, including ETH and BTC, lost over 55% of their value. This collapse also urged people to leave the crypto industry.