Blake Teeter is a cryptocurrency miner based in Colorado, and a year ago Nvidia tried to stop people like him from buying the company’s graphics cards.
The result was the Nvidia Lite Hash Rate (LHR), a software limitation the company installed across most of the RTX 3000 GPU series to nerf their Ethereum mining capabilities. But if you thought the LHR series discouraged Teeter and his peers from buying them up, you’d be wrong. “I have approximately 20 LHR cards I mine with,” he tells us.
In total, Teeter’s mining rig spans about 95 GPUs. And lately, he’s been adding LHR Nvidia graphics cards to the mix because they can still rake in enough profits, despite their limitations. On average, his mining rig generates about $4,500 in Ethereum per month, after electricity costs.
“Yes, I feel LHR was pointless,” says Teeter, who began mining a year ago as a hobby. Return on investment with LHR “isn’t a deal breaker for miners.”
Still Profitable
Teeter’s mining rig underscores how the cryptocurrency community can take precious GPU supplies away from gamers. In Teeter’s case, he bought his graphics cards from various retailers, including Micro Center and Newegg’s lottery system.
However, Nvidia’s attempt to prevent the cryptocurrency craze from depleting GPU supplies seems to have flopped, according to miners in the community.
“This did not discourage miners at all,” says NiceHash, a cryptocurrency platform that helps PC owners lease their computing power for mining purposes.
A big reason why is because Nvidia’s LHR graphics cards only halved the Ethereum mining to 50%. In the months since, the mining community, including NiceHash itself, has come up with software programs that can raise the mining capability to over 70%.
As NiceHash points out, an LHR model RTX 3080 and RTX 3070 Ti could have generated about $125 and $108 in profit per month, respectively, in December when Ethereum’s price topped $4,000. That’s a higher output than what a non-LHR RTX 3070 and RTX 3060 Ti can produce.
“Of course if they have a choice, miners will chose non-LHR cards, but the fact that a card is LHR will not stop them buying it otherwise,” NiceHash says.
Few Alternatives
The other reason why miners are buying up LHR cards is because they have little choice. For over a year now, GPU supplies have been scarce across the board when only two companies, AMD and Nvidia, produce mainstream desktop GPUs.
In a November earnings call, Nvidia said its Lite Hash Rate limiter was shipping across nearly all RTX 3000 desktop GPUs. So you can only avoid an LHR card if you buy a used graphics card or manage to snag certain models, like the Founders Edition series.
Tim Tarshis is another cryptocurrency miner who owns about 30 LHR RTX 3060 models mainly because at the time they were easy to buy. During last year’s third quarter, manufacturers flooded the market with the cards. “Everyone was flipping them (reselling them) for a little over MSRP, so I bought them,” he tells us.
Tarshis has since unlocked the cards’ mining capabilities to between 70% to 74%, and agrees that Nvidia’s Lite Hash Rate limiter did nothing to prevent miners from buying the GPUs, in part because the GPU shortage was still ongoing. “Many people, miners and scalpers, still were buying cards at the same rates as before,” he says.
Sev, another cryptocurrency miner from Canada who declined to give out his last name, tells us he decided to use his pandemic economic stimulus to buy mining rig materials, calling it a long-term investment. But he had no choice but to buy LHR cards. “I bought the LHRs because of scalpers taking everything, not much selection,” Sev says.
However, Sev points out the LHR series only handicaps the mining of Ethereum. The same cards can mine a variety of other cryptocurrencies without limit. “To be honest, mining with LHR versus non-LHR isn’t much of a difference. At this point there’s coin even better than ETH (Ethereum) to mine for my purposes of monthly withdrawals rather than holding,” he says.
The GPU: A Money-Printing Machine
Miners also point out that buying an LHR series card makes sense for them over the long term. Although Ethereum remains the major currency of choice for GPU miners, the blockchain is expected to phase out mining later this year. Whether this will bring an end to the cryptocurrency craze remains unclear, but at the very least it’ll force miners to focus on new currency.
Hence, it’s only a matter of time before the LHR series becomes irrelevant, making the cards attractive to all miners. “If Ethereum becomes unmineable this year, miners will purchase more LHR cards than before,” says Teeter, the cryptocurrency miner from Colorado.
Nvidia didn’t respond to a request for comment. So it’s unclear if the company would ever consider expanding the Lite Hash Rate limiter to more currencies, or restrict Ethereum mining even more. AMD, on the other hand, has responded by creating the Radeon RX 6500 XT, a GPU with only 4GB of video memory, which is not enough to mine Ethereum. And while it’s in stock, the GPU’s performance is so underwhelming that even gamers seem to be avoiding it.
In the meantime, a few miners acknowledge that buying so many graphics cards can deprive others from building their own PCs. “Sure, you could build some gaming PCs with that,” says one cryptocurrency miner on Reddit named Alex, who owns 20 GPUs, five of which are LHR graphics cards. Not helping the matter are scalpers and retailers selling the graphics cards at inflated prices, thanks to demand.
“I’m also a gamer, I don’t like these prices either,” Alex adds. However, he continues to pursue what he considers to be an expensive hobby. His mining rig now pulls in about $50 a day.
For consumers who do successfully snag a desktop graphics card, the temptation to become a miner can also be strong once they realize how much profit can be made. Marko Tarman, a mining hardware specialist for NiceHash, notes that many PC gamers like to mine cryptocurrencies on the side.
“We’ve heard a bunch of stories from users in less than developed countries, where with one GPU, they can feed a family. If you can basically earn money with zero effort, why not?” he says.
NiceHash’s own user base has exploded from 650,000 users in January 2021 to just over 2.5 million now, which occurred as LHR GPUs began circulating.
