Ether Miners Rent Boeing 747s to Ship Graphics Cards

When we heard back in June that AMD’s stock prices were skyrocketing because of the sales of their graphics cards to cryptocurrency miners, we thought that was just a metaphor. However, Genesis Mining executive Marco Streng recently informed Quartz that the company is “renting entire airplanes, Boeing 747s, to ship on time. Anything else, like shipping by sea, loses so much opportunity.” If there was ever an event that perfectly illustrated the incredibly volatile nature of cryptocurrency, this is it. Time is of the essence. Shipping the graphics cards in the conventional way (by sea) would be far too slow. 

The explosive rise of the value of Ethereum over the past year (1,584% since last July) is eye-popping, even for the most experienced cryptocurrency veterans. This rise has been echoed in the fiat world with the swelling of AMD’s stock prices, which have grown 152% in the same time period.

In order to mine cryptocurrency (such as Ethereum) at a profitable rate, miners need to use GPUs (graphic processing units) to solve complex equations. In the early days of Bitcoin, it was possible for individuals to use their home computers to complete this task. However, as the scale of blockchain has increased so vastly, the amount of processing power needed to actually make a profit with mining (to mine past the cost of equipment and electricity) has grown along with it. Now, warehouses filled with computers serve as the most efficient way to mine cryptocurrency.

About 36,000 new units of Ethereum are produced per day, and at about $200 a pop, that works out to be about $7.2 million worth of Ethereum that miners are competing for every day. Although there have been some recent fluctuations in the market, it seems clear that blockchain is here to stay, and that Ethereum’s value will only continue to increase in the long term. With an increasing number of large-scale investors buying into the blockchain game, and crypto hedge funds popping up like weeds, the urgency that caused Genesis to rent the planes becomes a little more understandable.

In a sense, the volatility of the market is making it much less sustainable for independent miners to invest in the equipment necessary to support a decent mining rig. The same thing that happened with Bitcoin is happening at a much faster rate with Ethereum. A sign of the times: the sudden appearance of gently used mining rigs on eBay as Ethereum prices fluctuate around a settling point of $200USD. However, it seems companies that can afford to rent private planes to fill with graphics cards and fly over the ocean can afford to absorb the ups-and-downs of the crypto markets.

The graphics cards themselves have become another object of competition. Dr. Lisa Su, CEO of AMD, acknowledges that their stock has become “quite lean”; at the same time, Streng says that “Now more and more miners are coming, and you have these scenarios where you experience shortages.” Streng manages to stay at the top of the game by maintaining “very close connections” with suppliers; he is also one of the lucky (or perhaps just wise) ones who got into Ethereum very early in the game.

However, Dr. Su does not count on the crypto-craze as a long-term driver of AMD’s sales. “Relative to cryptocurrency, we have seen some elevated demand, but it’s important to say we didn’t have cryptocurrency in our forecast, and we’re not looking at it as a long-term growth driver. But we’ll certainly continue to watch the developments around the blockchain technologies as they go forwards.”