The tip of Ethereum mining may very well be a bonanza for GPU consumers


Whereas these GPUs have been liquidated following 2018 flooding in China, they supply visible for the flood of GPUs hitting secondhand markets today.

For a lot of the world, yesterday’s long-awaited Ethereum “Merge”—which took the cryptocurrency from proof-of-work mining to a proof-of-stake mannequin—is notable for reducing Ethereum’s power consumption by 99.95 %. However for avid gamers, the Merge has already contributed to a dramatic shift available in the market for GPUs and will proceed to drive down graphics card costs going ahead.

In recent times, crypto miners had been scooping up as many GPUs as they may to energy their mining rigs, resulting in brief provides and closely inflated costs for customers who simply wished higher graphics on their PC video games. That pattern appears to have reversed itself in late 2021, although, as dollar-denominated costs for many cryptocurrencies started a protracted slide that made GPU mining unprofitable in lots of areas.

Costs for GPUs have already plummeted all through 2022, resulting in GPUs routinely going for considerably lower than their MSRP on public sale websites like eBay. GPU producers have been left with an surprising surplus of extra stock.

Final month, Nvidia introduced preliminary outcomes suggesting weaker-than-expected demand for its high-end playing cards. “Adjustments to cryptocurrency requirements and processes together with, however not restricted to, the pending Ethereum 2.0 customary can also create elevated aftermarket resales of our GPUs and will cut back demand for our new GPUs,” the corporate mentioned.

Nowhere to run to, child

You may assume that Ethereum miners may merely transition to different cryptocurrencies that also depend on proof-of-work mining (together with Bitcoin, which continues to be the most important cryptocurrency by market cap). The forked Ethereum Traditional, which is sticking with the token’s authentic proof-of-work mannequin, has emerged in its place making an attempt to fill simply that function.

However a latest report discovered that pre-Merge Ethereum was chargeable for a whopping 20 to 39 % of crypto-asset electrical energy utilization. That is such a big share of the crypto mining house that every one these miners transferring to different tokens en masse would shortly result in a glut of compute provide. That might in flip shortly drive down returns to the purpose the place solely miners with extraordinarily low cost electrical energy may flip a revenue.

We’re already seeing that cycle play out on Ethereum Traditional. As miners began flocking to the fork post-Merge, the elevated provide of compute energy has already made it practically unimaginable for miners to show a revenue.

The total hashrate for the Ethereum network has been falling for months, suggesting some miners may have been getting out well ahead of the Merge.
Enlarge / The whole hashrate for the Ethereum community has been falling for months, suggesting some miners could have been getting out effectively forward of the Merge.

Luxor COO Ethan Vera instructed The Block that solely about 100 TH/s of Ethereum mining capability would be capable of “discover a house” on different proof-of-work tokens after the Merge. That leaves about 90 % of the earlier Ethereum mining community that can “principally haven’t any use for GPUs in crypto mining” post-Merge, Vera mentioned.

“GPU mining is lifeless lower than 24 hours after the merge,” Bitfarms Chief Mining Officer Ben Gagnon tweeted Thursday morning. “The one cash displaying revenue haven’t any market cap or liquidity. The revenue shouldn’t be actual.”

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