30 Jun Ethereum Mining and the Price of Computer Components
Ethereum Mining is increasing the price of computer components! You may have noticed the current hike in the price of video cards recently. Perhaps you are in the market for a mid-high range GPU and have seen that the prices listed are 2-3x MSRP.
So what exactly is causing this?
Two words: cryptocurrency mining or Ethereum Mining. The sudden and drastic increase in the number of cryptocurrency miners has driven the prices of mid to high-end graphic cards through the roof. Text book supply and demand is in action and it’s effecting the entire PC industry. Miners across the globe are using anywhere from a few, to thousands of graphics cards for their ‘mining rigs’. This has resulted in nearly all online and physical retailers being completely out of stock or has forced them to sell their inventory at hugely inflated prices.
Here’s a look at a few of the affected GPUs.
RX 570 4GB [MSRP: $179 – CURRENT PRICE: $500+]
RX 580 8GB [MSRP: $229 – CURRENT PRICE: $500+]
GTX 1060 6GB [MSRP: $249 – CURRENT PRICE: $500+]
GTX 1070 8GB [MSRP: $379 – CURRENT PRICE: $550+]
What is cryptocurrency mining? (Simplified Version)
Ethererum mining is utilizing your own computing power to solve complex mathematical problems that underlie the transactions for any given currency.
There are a number of different cryptocurrencies. Bitcoin remains the largest, but increasing concern about transaction speed and cost has recently led to a rise in alternatives. The most prominent of these is Ethereum. Ethereum is designed to be resistant to ASICs (chips designed specifically for cryptocurrency mining), which means that potential miners must stick to consumer video cards.
Eventually, Ethereum will switch from a proof of work (mining) to a proof of stake (based on possession of currency) system. Long story short, this will mean no more video card demand from Ethereum miners. Unfortunately, there is no fixed date for when the switch is due to occur. Just this week (6-26-17), both NVIDIA and AMD have announced plans to introduce cards aimed at cryptocurrency miners, which may help to lower prices of mainstream cards – but those are not due out until Q3 at the earliest.
In the meantime, unless you want to pay outrageous prices for your new GPU, all you can do is wait it out. Cryptocurrency mining is in a bubble and it will pop eventually.