Crypto currency gpu apoc

In the current market, we'd exercise caution, particularly on models that were popular mining cards. Basically, you get what you pay for. May GPU Pricing Summary: Oversupply Incoming Image credit: Shutterstock Just like we saw with the last major cryptocurrency boom in late to mid , eventually things return to some semblance of normal. Basing production and sales forecasts on the cryptocurrency market is risky, and with the long expected collapse now upon us, all the new AMD and Nvidia GPUs getting manufactured now have to compete with used cards flooding the market.

We suspect AMD and Nvidia were more cautious this round, but there's still a good chance to see some cards selling well below MSRP in the coming months. Again, are you mining hash, or are you mining crypto? Many ASICs draw about watts. And since everyone else is buying the same ASICs that you are, everyone ends up in exactly the same place — burning the same watts for the same relative slice of the profits. The only real winner in this arms race is the company building the ASICs.

In , the numbers have gotten much bigger, but the point still stands. For most small-to-medium-size miners, the first bottlenecks you inevitably bump up against are: the total amount of power your electrical service can deliver, the amount of heat your space can deal with. With GPUs, you will simply be able to pack more profit in before you hit that wall. But let us never forget the 1 Cardinal Rule of Mining — profitability is always inversely proportional to how easy it is to mine something.

Mining is a competition. What happens? Even so, the 1 Cardinal Rule still stands. Because when you take the easy route, everyone is building the same rigs you are, buying the same GPUs you are, and mining the same Ethereum and Ravencoin that you are. Optimize in ways that no one else is talking about.

Cardinal Rule 1 strikes again. An ASIC is a one trick pony — it can only mine a specific coin. Basically, an ASIC is solely a bitcoin mining machine. Whereas with GPUs, a significant amount of them come from gaming rigs that are mining in their off time or casual miners with a rig or two. When profitability gets low, gamers stop mining and casual miners sell their GPUs to gamers. Which means when the going gets tough, things get easier for the GPU miners that stick with it, because a lot of the competition simply goes away.

Things get even worse when you look at the effect this has on the secondary market. If income no longer exceeds the cost in electricity, your ASIC is worthless to you, at least. Resale value rapidly approaches zero as the ASIC approaches unprofitability. For people now in your situation, at least. But it gets even worse! A subtle factor in this equation is that everyone pays a different price for electricity. They have the pick of the litter so you will get pennies on the dollar.

But something is better than nothing. So the vast majority will still resell their ASICs to someone with cheaper electricity instead of throwing them in the garbage or leaving them on the shelf, which means those ASICs effectively never get turned off, they just get moved around. The rate of growth barely even slows down when the market crashes. Short of a natural disaster that wipes out tons of miners at once, hashrate never goes down.

Note: In May , China banned mining. So these black swan events do happen from time to time. This equipment is rapidly being relocated elsewhere, as demonstrated by the even more rapid rise of hashrate after the drop. So this is just a short term pause that will have little net effect on the inexorable rise of hashrate. The only way your profitability ever rises above where it was on day 1 is if the market price of bitcoin increases — but then you have to ask yourself why you bought an ASIC and not just bitcoin itself.

But more importantly, how much did your hardware depreciate in value over that year? Because that is the true measure of how much the hardware cost to own — and your ASIC is going to be worth significantly less if worth anything at all, and the GPU and all of the associated parts in the rig will be worth at least half or more of what you paid for them.

Overall, GPUs are a little more expensive upfront but cost less to own over time. With crypto being such a volatile market, we can hope for the best, but still need to prepare for the worst. What happens to GPU mining when the market crashes to the point where mining is barely profitable? From Mid-September to November, difficulty was flat. As the market bubbled over in Dec-Jan, there was a huge influx of GPUs as profitability was through the roof. As the market continued to slide down through March, it pretty much flatlined again.

In May we saw a momentary recovery, and a corresponding bump in growth, but nothing dramatic. However, the real story is in the profitability charts. December sure was a great month, but the May bump is barely perceptible. Profitability went from a miserable 0. Profitability more than doubled in the same time period that Bitcoin barely edged upwards. This was because at this point, so many had given up on GPU mining, leaving those who stuck with it to reap all of the rewards. Whereas with ASICs, profitability is down to roughly half of what it was in April, with no end to the decline in sight.

Note: I have left the original charts from intact, as the latest drop in May was unlike the early crash in that GPUs and ASICs still remain extremely profitable right after the crash, especially due to the China ban. They are not flexible, period. Sure, there are ASICs that can mine more than one algorithm, or more than one coin, but at the end of the day, all they will ever be able to do is the only thing they were specifically made to do.

You run your GPUs, and you get Bitcoin in return. Let that one sink in.

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