Cryptocurrency Mining Is Stalling The Search For Extraterrestrial Beings

  • Researchers at SETI, which listens to potential alien signals, are unable to expand operations due to a GPU shortage
  • GPU maker Nvidia has stated it is working to keep up with demand

According to the BBC, the Search for Extraterrestrial Life (SETI) is stalling its expansion plans due to the lack of available GPUs in the market. Researchers reportedly want to expand their operations at two facilities, but are unable to find GPUs to buy.

GPUs are used by cryptocurrency miners and gamers. The recent cryptocurrency ‘craze’ that saw most cryptocurrencies hit new all-time highs in late 2017 has led to a shortage of these units as demand skyrocketed. Large GPU producers like Nvidia have yet to meet the high demand which has caused the shortages and inflated prices. They’re also used by researchers at SETI, who scan many communications frequencies at once. They do this to ensure they don’t miss any potential extraterrestrial call.

The BBC even reports that at some telescopes, Berkeley SETI has around 100 GPUs working on data. The organization’s facilities in Green Bank, West Virginia, and Parkes in Australia are currently unable to expand. According to SETI chief scientist Dan Werthimer, the organization has the money to invest, but retailers have to keep turning them down due to a lack of stock. He stated:

Earlier this year, gamers reportedly suffered from the shortage as well. Graphics card maker Nvidia, whose CEO recently stated that cryptocurrencies are “not going to go away,” reportedly told investors it is “working really hard” to “catch up with supply” to get more units out on the market.

"We'd like to use the latest GPUs [graphics processing units]... and we can't get 'em. This is a new problem, it's only happened on orders we've been trying to make in the last couple of months."

Dan Werthimer

Other radio-astronomers have seemingly also been affected. A group looking at evidence of the earliest stars claimed that the rising prices of GPUs forced them to use their contingency budget to expand its telescope.

Hacker House’s cybersecurity expert Matthew Hickey explained that GPUs can be used to profitably mine Ethereum and other altcoins. Whereas bitcoin miners largely moved on to specialized ASIC chips that were built for mining. He said:

"[Miners can] use GPUs effectively to turn a small profit, you're not going to make millions but if you put 12 or 24 GPUs together, you'll make back the cost in six months.”

Matthew Hickey

He further pointed out that GPUs are versatile, as cybersecurity experts often use them for password-cracking experiments. In these, computers attempt to “brute force” a password by attempting to crack it millions of times. The unmet demand for GPUs, he noted, led to the inflation of their prices.

Bitcoin Price Surges Above $9,300 for First Time Since June 25

On Monday (July 6), the Bitcoin price managed to surge past the $9,300 level for the first since June 25, a move that was likely powered by the current bullish in the stock markets of China and the United States.

Today's strong rally in the world's major stock markets started was led by China, where the Chinese government is apparently encouraging investors to buy stocks.

According to a report by CNBC, "a front page editorial in state-owned China Securities Journal" (publishe-d earlier today) talked about the “wealth effect of the capital markets” and suggested that a “healthy bull market" was important for the economy at this time.

Peter Boockvar, chief investment strategist at Bleakley Advisory Group, says:

"We have the Fed to juice bull markets, China has its state media."

The CSI 300, which is "a capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange", closed over 250 points higher at 4,670.09, up 5.67%. 

CSI 300 Chart by Google Finance on 6 July 2020.png

As you can see in the above chart from Google Finance, in the past five trading session, the CSI 300 index has gained over 13%, the most in a five-day period since December 2014, and helping the CSI 300 to reach a level last seen in June 2015.

CNBC says that although "China’s economy faces many hurdles, including trade issues with the U.S. and the growing friction as the economies move to decouple",  in the near term, "the prospect of an improving China spilled over to other markets, boosting sentiment for global trade."

Europe's major stock markets followed China's and all closed higher.

As for the U.S. stock market, premarket trading data indicated that the market would be having a good day, and it has not been wrong so far.

Currently (as of 18:37 UTC on July 6), the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq are at 26196.15 (up 368.79 or 1.43%), 3172.03 (up 42.02 or 1.34%), and 10404.81 (up 197.18 or .93%) respectively. The leading sector was (as usual) technology, with Amazon and Netflix setting new all-time highs, helping the tech-heavy Nasdaq to power itself to a new all-time high.

This is what President Trump tweeted around 10 minutes after the U.S. stock market opened:

Today's stock market rally in the U.S. means that the S&P 500 and the Nasdaq are both on a five-day winning streak. 

So, what's fuelling investors' perhaps surprising amount of bullishness on stocks in the midst of the COVID-19 pandemic? This might be especially mystifying in the case of the U.S., where we are seeing around 50,000 new daily cases of COVID-19 (even though, thankfully, the number of death are going down).

It seems that investors and traders believe that:

  • As lockdown measures are eased, the outlook for businesses should keep improving.
  • There are encouraging signs from the pharmaceutical industry that we will soon have good therapeutics in the next few months and reliable vaccines by next year.
  • Governments around the world will continue to support the financial markets with monetary and fiscal stimulus.

Andrew Brenner of National Alliance told CNBC:

"I’m starting to believe the Covid case are an inverse indicator. The worse it gets, the more the market does better because it means more Fed and fiscal stimulus will come towards the markets."

The optimism that is fuelling the stock market rally appears to be also helping Bitcoin since today Bitcoin shake off the lethary of the long Independence Day weekend -- which saw Bitcoin dropping below $9,000 at 21:15 UTC on Sunday (July 5) and bounce back above $9,300 for the first time in 11 days:

2 Week BTC-USD chart on 6 July 2020.png

Featured Image by "WorldSpectrum" via Pixabay.comSave