If you have any investments in popular cryptocurrencies, chances are you’ve had a pretty nasty few weeks. While most of the news surrounding the ongoing crypto market crash concerns Bitcoin, its crash has also dragged several other coins such as Ethereum down with it.
At its peak, a single Bitcoin was worth almost $64,400, which means that if you bought $1,000 worth of Bitcoin on November 12, 2021, it would currently be worth about $326 today. Similarly, the price of Ethereum fell to $1,112 this week, down from $4,600 in November, and this was the primary coin still mined using consumer graphics cards rather than application-specific IC miners ( SO C).
That’s bad news for cryptobros, but potentially good news for other stakeholders who have been praying for the market to crash, even if some people have nothing to gain from Bitcoin’s crash. One such group is PC gamers and computer enthusiasts who have partly blamed crypto miners for the rapid inflation of graphics card prices in recent years, but will this ongoing market crash provide a fruitful payoff? of cheap GPUs?
It is certainly a possibility, but not everything is black and white. Bitcoin itself has not been a real problem for the gaming community for years as it is completely unfeasible to mine using a consumer graphics card. Smaller cryptocurrencies didn’t have that problem, but the renown and popularity of Bitcoins seem to have taken many of these smaller coins with it.
12-18 months ago, when I was reporting on the rising cost of recently released GPUs like the Nvidia GeForce RTX 3080, prices had risen to almost 3x the MSRP for some of the most popular next-gen offerings from AMD and Nvidia, which made the cards impossible to find in stock and wildly unaffordable for most. Part of the blame was placed on crypto miners, from small-scale operations to huge factory farms, as they had the purchasing power to seize all available stock from online stores using bots.
Covid-19 added additional frustrations as physical stores remained closed for many months, forcing potential customers to try to source new GPUs online, either directly from a retailer or by paying resellers on third-party sites like eBay or Marketplace. Facebook.
Wait, so the crypto miners are to blame?
Gamers and PC builders had an understandably dismal few months where it looked like prices wouldn’t fall and shortages were inevitable. Looking back at the general “vibe” during that time, I was pretty sick of hearing about new graphics cards being released because few consumers could buy them at a reasonable price. No wonder there were people who expected the cryptocurrency market to crash, even if it was more out of spite than a belief that it would fix the market.
Crypto miners certainly weren’t the biggest problem, but they did create competition for what little stock was available. In the end, Team Green (Nvidia) implemented measures to make their consumer graphics cards less desirable to those hoping to use them to mine currencies like Ethereum by installing anti-mining technology across almost the entire Ampere lineup.
The thing is, the GPU market has been slowly recovering for months, and the current crisis likely only has a small part to play in that.
Asus announced during the company’s Q1 earnings call that the drop in demand was likely due to the crypto industry’s intention to move away from GPU-based mining for Ethereum, the world’s second most popular cryptocurrency behind of Bitcoin.
This is because Ethereum has started to move to proof of stake, from the old proof of work method previously used by Bitcoin. In simple terms, proof-of-work is a validation method where computers compete with each other to be the first to solve complex “puzzles” and the winner gets to update the blockchain with the latest verified transactions, being rewarded with some cryptocurrencies as payment. .
This left the validation open for miners using warehouses full of consumer graphics cards to solve those puzzles: massive amounts of electricity in and cryptocurrency out.
Instead, proof-of-stake uses validators to find a block based on the number of tokens they have, eliminating the need to solve those “puzzles.” So while it was previously profitable to mine Ethereum on consumer graphics cards, it will soon be inefficient to do so.
Not only does the flaw mean that people will make less money if they continue mining, but it could also result in some people giving up mining altogether and selling large amounts of hardware to recoup some cash. We could expect an influx of cheap, used graphics cards to flood the market, though you’d have to buy them at your own risk given how long they’ve been in constant use.
Still, even without used GPU flood sites like eBay or Facebook Marketplace, we can expect PC gamers to find less competition from crypto miners in the coming months, which should make it easier to get your hands on the GeForce RTX 3060. What have you been looking at?
Rejoice, but keep in mind that our luck could change
you_love_to_see_it from r/pcmasterrace
We’re already seeing some of the current generations of graphics cards being sold at a discount to the new ones, although the use of the word “already” might add salt to some wounds given that many of these cards are approaching their second birthday.
We are only a few months away from seeing what AMD and Nvidia have to offer regarding next-gen hardware, and Intel is already testing its desktop GPUs in the Chinese market. Arc Alchemist will be a generation behind Lovelace and RDNA3 when it launches, but its inclusion could help prevent a shortage.
All of this certainly looks good for… well, anyone who is not a crypto miner. With crypto tanking, there will be less competition from miners entering the next generation release, as well as cheap used hardware for those on a budget. The biggest risk here is that there are still other coins available that use a proof-of-work system, so even when ETH eventually moves away from proof-of-work, mining may become lucrative again if the crypto market recovers.
For now though, it looks like gamers and PC builders can celebrate a victory over what many considered to be a huge thorn in their side. The crypto markets could of course recover, but at least we can enjoy some discounted graphics cards before the possible rebound.