{"text":[[{"start":12.47,"text":"As the price of bitcoin has surged, the hidden costs of the cryptocurrency boom are becoming clearer. "}],[{"start":18.69,"text":"Awareness of the environmental consequences of using a vast array of computer equipment to produce bitcoins has been rising. "},{"start":25.344,"text":"Bill Gates has been among those to flag concerns, pointing out that so-called bitcoin mining uses more electricity per transaction than any other method known to mankind. "}],[{"start":35.010000000000005,"text":"Much less discussed, and yet perhaps more immediate, is mining’s impact on costs of chips — which go into everything from smartphones and TVs to cars. "}],[{"start":43.800000000000004,"text":"Bitcoin is created by bitcoin miners, who are issued with the cryptocurrency in return for completing massive volumes of computations to verify transactions. "},{"start":52.717000000000006,"text":"This requires a high energy input. "},{"start":55.072,"text":"But miners also require increasingly powerful computer equipment, or rigs, for the process. "}],[{"start":61.010000000000005,"text":"How quickly bitcoins can be mined is directly correlated to how advanced chips inside the rigs are. "},{"start":66.56400000000001,"text":"As the price of bitcoin rises, so does the profitability of mining. "},{"start":70.619,"text":"The fixed costs of mining a single bitcoin stand at an average of $5,000. "},{"start":75.349,"text":"With bitcoin trading around $58,000, fat margins have pushed mining revenue to a record $1.4bn last month. "},{"start":83.117,"text":"As a result, miners are splurging on more and more computers and high-end chips. "}],[{"start":88.85000000000001,"text":"The problem is that even without that growing demand from cryptocurrency miners, the semiconductor industry is struggling with a global shortage. "},{"start":96.40400000000001,"text":"The pandemic, snowstorms in Texas and fires have caused severe disruptions to production and supply chains. "}],[{"start":103.01,"text":"“Added demand from cryptocurrency miners is coming when the chip industry is dealing with simultaneous crises — from supply constraints to a structural shortage of high-end chips,” says CW Chung, head of research at Nomura in Seoul. "},{"start":115.852,"text":"“The squeeze should last through the end of the year. ”"}],[{"start":119.30000000000001,"text":"Shortages are affecting a broad range of industries. "},{"start":122.55400000000002,"text":"Automakers including Toyota and Volkswagen have slashed production of cars as a result. "},{"start":127.45900000000002,"text":"Smartphone makers are delaying launches of new models. "},{"start":130.52700000000002,"text":"A shortage of gaming chips has forced chipmaker Nvidia to programme a new chip to throttle mining efficiency by half when it detects it is being used to mine cryptocurrency. "}],[{"start":140.11,"text":"TSMC and Samsung, the world’s largest chipmakers, make most of the chips used in cryptocurrency mining. "},{"start":146.727,"text":"The two are also the main supplier for the world’s tech groups such as Apple and Intel — which make up a much larger portion of chipmaker revenues than bitcoin miners. "},{"start":155.36900000000003,"text":"Even so, production capacity for chips has been diverted away from industries that need a continuous supply. "}],[{"start":162.17000000000002,"text":"Besides specialised chips, miners are snapping up more computers and servers — which is pushing up demand for traditional Dram chips used in PCs. "},{"start":170.524,"text":"It does not help that the second quarter is traditionally the peak season for chips used in servers, crucial to the businesses of big tech groups like Google and Facebook. "}],[{"start":179.86,"text":"All that has played a part in pushing prices of Dram chips up over 60 per cent in the past three months. "},{"start":185.65200000000002,"text":"While those have boosted chipmaker profits, the shortfall has wreaked havoc on the sector's previously predictable price cycle. "},{"start":192.06900000000002,"text":"Chip prices had been expected to fall last year. "},{"start":194.86200000000002,"text":"Now, another 20 per cent rise in consumer chip prices is expected from the second quarter as the shortage intensifies. "}],[{"start":202.47000000000003,"text":"“Cryptocurrency industry demand can have a significant influence on the chip market — during the last bitcoin rally, they were a tenth of TSMC's entire sales,” says Chung. "}],[{"start":212.69000000000003,"text":"Structural changes are making the situation worse. "},{"start":215.98200000000003,"text":"Smartphone and game console makers have changed purchasing habits, stockpiling months’ worth of chips ahead of a prolonged period of high prices. "},{"start":223.71200000000002,"text":"An engineer shortage cannot be ruled out either. "},{"start":226.49200000000002,"text":"Taiwanese prosecutors have accused Beijing-based Bitmain Technologies, the world’s largest crypto-mining equipment maker, of allegedly poaching more than 100 local engineers. "}],[{"start":237.29000000000002,"text":"Critically, chips are one of the most expensive components of consumer electronics devices such as smartphones and PCs. "},{"start":244.157,"text":"Increased supply to bring down prices will not be fast in coming. "},{"start":247.74900000000002,"text":"The process of sourcing raw materials and producing chips, which used to take at least three months, is getting longer. "},{"start":253.66700000000003,"text":"Building capacity takes years. "},{"start":255.69700000000003,"text":"There are few other suppliers that can produce at scale. "}],[{"start":259.51,"text":"What then? "},{"start":260.889,"text":"Previous patterns of behaviour show that bitcoin mining stops being profitable for most miners when the price of bitcoin falls below $3,800. "},{"start":269.24399999999997,"text":"At current levels, that is a long way away. "}],[{"start":271.9,"text":""}]],"url":"https://creatives.ftacademy.cn/album/001091898-1616551185.mp3"}