If you’ve invested in popular cryptocurrency, then most likely you’ve had an extremely difficult few months. While the bulk of the media coverage about the current crypto market crash focuses on Bitcoin, however, the collapse of Bitcoin has brought a number of other coins such as Ethereum into the abyss.
At its peak in the past, one Bitcoin at the time was valued at around $64,400. This means that if one bought $1,000 worth of Bitcoin back on the 12th of November 2021, the amount will be worth $326 at present. In the same way, the cost for Ethereum dropped to $1,112 in the week that passed which is down from $4,600 in November. It was the primary currency that was being mined by using graphic cards for consumers, not application-specific integrated circuit ( ASIC) miners.
This is not good news for crypto enthusiasts however, it could be good news for those who’ve been waiting for the cryptocurrency market to fall even if some aren’t gaining anything from the decline of Bitcoin. One of them is computer gamers and enthusiasts who blamed crypto miners for the massive rise in the cost of graphics cards in recent years. But will the current market slump result in a flurry of inexpensive GPUs?
It’s certainly possible however, it’s not always all black and white. Bitcoin isn’t an problem for gamers since it’s impossible to mine with the standard graphics card used by consumers. The smaller cryptocurrencies did not have this problem however Bitcoins fame and popularity seems to have brought a lot of smaller currencies along with it.
Twelve to 18 months ago, when I reported on the increasing cost of recently launched GPUs like Nvidia GeForce RTX 3080. Nvidia GeForce RTX3080 Prices were been soaring to three times that of the retail price for certain models from AMD and Nvidia’s top new-generation offerings, making the GPUs impossible to locate in stock and completely unaffordable for the majority. The blame for this was attributed to crypto miners, from small scale enterprises to huge industrial farms, since they had the power to buy all the available inventory through online retailers with the help of bots.
Covid-19 exacerbated the issue since brick-and mortar stores were closed for months and forced potential buyers to search for new GPUs online, whether it directly from a retailer or by paying scalpers through third-party websites like eBay and Facebook Marketplace.
Wait, is it true that cryptocurrency miners to blame?
Computer builders and gamers had an unsettling couple of months when it seemed that prices wouldn’t drop and the shortage would be unavoidable. When I look back on what was the overall “vibe” at the time I was pretty tired of hearing about new graphics cards that were released since very few consumers could purchase them at an affordable price. It’s not surprising that there were those who hoped that the market for crypto would fall – even if this was more out of anger than an expectation that it could help bring about a change in the market.
Crypto miners definitely didn’t cause the most problems however, they caused the market to be competitive over the limited stock that was available. At the end of the day, Team Green (Nvidia) implemented measures that made its popular graphics cards more attractive for those who wanted to to mine currencies like Ethereum through the installation of anti-mining technologies throughout the Ampere range.
The fact is, the GPU market is slowly recovering for a while now and the recent slump is probably only a tiny part to play in.
Asus made it clear during its Q1 earnings conference that the decline in demand could have been caused by the cryptocurrency industry’s decision to shift away from mining using GPUs for Ethereum which is the second-most popular cryptocurrency, just behind Bitcoin.
This is due to the fact that Ethereum is now moving to proof-of-stakeinstead of the earlier proof-of-work method employed by Bitcoin. Simply put, proof-of-work is a way to verify transactions. computers compete in order to be the first to solve difficult “puzzles” that the one who wins is able to upgrade the blockchain with the most recent transactions that have been verified, and is awarded with crypto as payment.
This leaves the validation open to miners who use storage facilities stocked with consumer graphics cards to work out the puzzles. Large quantities of electricity are pumped into and out comes cryptocurrency.
The proof-of-stake system instead employs validators to determine blocks based on the amount of tokens they have and removes the requirement for these “puzzles” which need solving. Therefore, even though it was profitable in the past to mine Ethereum using consumer graphics cards however, it will soon become unprofitable to mine it.
The downturn in mining doesn’t only mean that miners will earn less cash if they continue mine and extract minerals, but it may also result in people quitting mining entirely and selling off large quantities of hardware in order to make some money. There is a chance for an influx of used, cheap old graphics card to hit the market, although you’d have to buy them with your own extra risk, given how long they’ve been in continuous use.
Even without the use of GPUs dominating sites like eBay as well as Facebook Marketplace It is possible to anticipate PC gamers to experience lesser opposition from cryptocurrency miners over the next few months, making it easier to get the GeForce GTX 3060 you’ve been eyeing for a while.
We’ve already seen some of the most recent generations of graphics cards being sold at a discounted price from the latest but the inclusion of the term “already” may cause some pain since a lot models are approaching their second birthdays.
We’re only a few months away from discovering how much AMD and Nvidia have to offer with regards to next-gen hardware and Intel has already begun conducting tests of its GPUs for desktop use in the Chinese market. Arc Alchemist Arc Alchemist will be one generation further behind Lovelace as well as RDNA3 when it is launched and is expected to aid in preventing an oversupply.
This certainly seems to be a great option for …well everyone who’s not a cryptocurrency miner. Since crypto is tanking, there is lower competition from miners into the next generation release and there will be a lot of cheap equipment for those on a strict budget. The main risk here is that there’s different currencies available that employ the proof-of-work method which means that even if ETH is finally able to abandon proof-of-work mining, it could be profitable once the market for crypto recovers.
At the moment it seems that PC players and developers can rejoice the victory over what was believed to be a major obstacle. The cryptocurrency market is likely to recover in the future, but we should at least get some discount graphics cards prior to the possibility of a rebound.