Ethereum and Custom Mining Cards Currently we are in the center of a world-wide buying frenzy for graphics cards brought on by the sudden rise in Ethereum (a digital crypto-currency).In this article, we are going to explain to the newcomer the basis for increased graphic card sales, current demand, and the precise situation gamers face.Then we will take a look at what AMD's and Nvida's options are for alleviating the current challenges.This solution will matter greatly to investors because there is the possibility of potentially new product lines being introduced.We wrote about crypto currency on 5/31/17 here.Since then demand for AMD graphics cards has accelerated.To put the demand in perspective, I accepted a challenge from a certain member of our community at Seeking Alpha.I physically went into my third Best Buy store this week and the shelves looked barren.No AMD RX 580s or 570s were to be had (even at inflated prices).Not to be discouraged, I attempted to order an AMD RX 470, 480, 570, or a 580.

According to the store associate, every Best Buy in my region was out of stock.The associate noted he was unable to go outside of his region (22 stores) to order items, so it is possible (but not probable) that if you live in another region you might see some inventory in stock at vastly overinflated prices.The point being herein that supply problems due to excessive demand are continuing. (since it was the only thing to be found).Needless to say, it was a risk and the card turned out to be damaged.We iinquired with Newegg about their supply situation.(Note that the customer service rep's name has been edited out, but his replies are in green text - I apologize for the small text.You may have to save the picture and expand it in a program to read it easily.)To recap, per the rep, Newegg is not going to replenish the stock of AMD RX 480.Monitoring the various tracking sites, they are getting in a trickle of AMD RX 580s.Glancing at 29 models of AMD upper range cards - zero are in stock at Newegg.

- all sold out.I was informed however that AMD Vega Frontier will be in stock on 7/1/17.This is the ultra high end workstation cards.As various crypto-coins rise in price, the demand is intensifying.When last we wrote on 5/31/17, the price of Ethereum was $229.As of 6/19/17, it is $356 (a 55.4% increase in a little over 2x weeks).The present demand is so intense that newcomers unable to find AMD cards are substituting Nvidia 1060, 1070, (and in some cases even 1080s) in an attempt to join the coin hysteria.This benefits both companies, but more so AMD.We view Nvidia as being a short candidate (given its high PEG ratio), but due to lack of AMD supply in the channel (concurrent with the excessive demand), Nvidia may well increase to even higher prices due to gaining sales due to lack of AMD supply.For now, we will wait and watch Nvidia.Once the mining-mania subsides, we may revisit our short thesis.As prices of crypto currencies have risen, so has demand for the graphic cards.In order to meet demand and help gamers AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) are rumored to be making dedicated graphics card for mining.

We think this rumor is very likely and we are not alone. gives credence to our theory that it will happen.Both gamers and miners stand to benefit from a dedicated solution.Let's explore - shall we?uusi bitcoinThis is the easy approach.bitcoin gbp graphAMD and Nvidia simply take an existing graphics card and remove unnecessary parts such as video connectors.bitcoin sec review dateThus the card could not render a display and would be available to simply crunch the math necessary to solve for various crypto currencies.ethereum april 28The benefit would be that miners would possess cards that are cheaper on a hardware basis, while possibly receiving special drivers that could allow for higher computational returns per card.bitcoin faucet 1 minute

An additional benefit for the companies would be that the cards would not have any resale value when it comes to the gamers' market.Thus, gamers would not be motivated to log into eBay and buy a mining card that has been run very hot and might have stability issues (thus damaging the reputation of AMD or Nvidia).bitcoin ipo australiaPreventing gamers from buying cards to run in parallel could be accomplished via an extra hardware chip or even via drivers.AMD / Nvidia could devote the resources and personnel to create a dedicated card as an offshoot from its current graphic cards.Custom designed, it could save on silicon space per ship by eliminating areas that are unnecessary for a mining card.With saved space, further optimizations or features could be added that would benefit the dedicated miner (i.e., lower costs, increased performance, or power savings).Of course, AMD could mimic Nvidia by selling very high-end custom solutions in-house rather than allowing third parties to sell them.

This could be a road to go down for only the highest of custom-mining solutions, while the mainstream mining parts are distributed by the third parties (much like they do with graphic cards).Thus, AMD or Nvidia could capture higher margins on their very high-end, custom mining cards.The rising crypto currency tide raises all graphics card sales for both companies.While we think Nvidia is overvalued with its PEG ratio of 4.03, the company may continue to trade even higher because of additional graphic card sales (since AMD GPUs are out of stock).Thus we will take a wait-and-see approach.AMD is set to release Vega soon which (while late) will attack the high-end GPU arena of which Nvidia has enjoyed zero competition.This will obviously bite into Nvidia GPU sales.Currently, we have a small short position in Nvidia.We may cover this as the crypto frenzy is fueling sales for both companies.We like AMD and are holding our current position of common stock and call options to ride out the demand and what we suspect will be an earnings beat.