Chipmaker Intel is discontinuing a line of dedicated Bitcoin mining processors just a year after it launched.
The Blockscale range was intended to help Intel capitalise on opportunities in the cryptocurrency space, but the company said this week that it will stop taking orders for the product later this year.
Since Blockscale launched, cryptocurrencies have suffered a series of high-profile problems. Intel, meanwhile, has its own issues, having seen revenues hit hard by the global economic slowdown.
Why Intel cancelled Blockscale
Intel announced Blockscale, which it initially referred to as Bonanza Mine, in February last year. The application-specific integrated circuit (ASIC) for Bitcoin miners was launched as part of a wider blockchain roadmap for the company.
Mining is the process of creating new tokens on the Bitcoin blockchain, and is notoriously energy intensive. At the time, Intel was keen to push the efficiency benefits of the ASICs, claiming it offers 1000x better performance per watt of energy compared to mining with a GPU, the other widely used method of generating Bitcoin.
“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.”
Blockscale launched with several high-profile clients, including Twitter founder Jack Dorsey’s digital payments platform, Block, but 12 months later the project has bitten the dust. Intel says it will stop taking orders for Blockscale in October, and discontinue support for the products in April next year.
An Intel spokesperson said the company was focusing its investments on its IDM 2.0 strategy, which will see it offer chip production services to third parties in a bid to compete with market leader TSMC.
“As we prioritize our investments in IDM 2.0, we have end-of-lifed the Intel Blockscale 1000 Series ASIC while we continue to support our Blockscale customers,” the spokesperson said.
Blockscale launched at the start of a ‘crypto winter’
Experts who spoke to Tech Monitor about Blockscale last year were dubious that it would achieve its stated aim of cutting Bitcoin’s carbon footprint, and said the ASIC was likely to add to the problem of e-waste, with miners discarding old machines to upgrade to better models.
“With Bitcoin, the only thing that matters to miners is how much money they make,” said Alex de Vries a researcher and founder of Digiconomist. “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.
“The main effect of Intel coming up with a new ASIC will be more electronic waste. Electricity consumption is likely to remain broadly the same.”
Aside from this, the product may have been the victim of bad timing, having hit the market at the start of a difficult period for crypto assets. The collapse of the so-called stablecoin Terra last year led to values of digital currencies tanking, and in November, crypto exchange FTX went bust amid allegations of fraud, causing investors to lose millions of dollars.
Intel meanwhile has been making cuts across the business after seeing revenue slump 32% year-on-year in the fourth quarter of 2022, causing it to cut its forecasts for 2023. It will release its first quarter results for this year next week.