Ethereum and Bitcoin are recovering – which is bad news for gamers

Ethereum and Bitcoin are recovering – which is bad news for gamers

After the larger cryptomarket crisis a few weeks ago, prominent cryptocurrencies like Ethereum and Bitcoin have started to surge in value again swiftly this weekend, putting cheap graphics cards at danger of inflation once more.

According to Coindesk, this weekend saw the first gain for both Bitcoin and Ethereum since the market meltdown in June, with Bitcoin rising to 5% (though it’s important to keep in mind that the crash erased 34% of its value) and Ethereum achieving a tremendous 20% growth in the same time frame.

While this is fantastic news for anyone who still has assets in any of the currencies that are recovering, if cryptomining becomes profitable once more, GPU prices might start to skyrocket. Because it can’t be mined efficiently with a consumer graphics card, Bitcoin is less problematic than other cryptocurrencies, but because it’s the most valuable and well-established one, its health typically has an impact on the health of the others as well.

On the other side, Ethereum poses a possible risk to the period of time when GPU prices are still quite low. The currency continues to utilize “proof-of-work” despite pledges to switch to the same “proof-of-stake” validation that Bitcoin employs (a mechanism that uses randomly chosen miners to validate transactions) (a competitive validation method that can be exploited by miners).

GPU Shortage 2: Electric Boogaloo

Proof-of-work allows miners from all over the world to compete to be the first to complete a “math problem,” and the winner receives a tiny part of the cryptocurrency in exchange for updating the blockchain first. The likelihood of someone solving the riddle first increases with access to hardware with a higher hash rate, which is a gauge of the number of computations that can be performed per second.

These ‘puzzles’ can be solved on traditional graphics cards as opposed to specialized mining devices known as ASIC miners (application-specific integrated circuit), though ASICs do tend to provide much better hash rates – for a price. As such, ASIC miners were typically only used with Bitcoin since it moved to proof-of-stake, but if Ethereum can still be effectively mined on consumer graphics cards then PC gamers aren’t out of the woods yet.

There’s no guarantee that history could repeat itself, but with the price of popular graphics cards having stabilized after a turbulent two years, the low prices could entice miners to jump back into Ethereum mining while GPU prices are low and the currency is still viable to mine on them, and that’s not even including the many other smaller currencies that also still use proof-of-work validation.

This is particularly depressing because AMD’s RDNA3 cards and Nvidia’s Lovelace series are anticipated to go on sale later this year. As a result, gamers may find themselves in a similar situation where they must hurry to get an RTX 4080 before miners and scalpers scoop them up in droves. I believe I’ve seen this movie previously, and I didn’t enjoy the conclusion, to quote Taylor Swift.

Should you buy now, or wait for next-gen?

When I first started writing about the rising costs of recently released GPUs, like the Nvidia GeForce RTX 3080, 12 to 18 months ago, some of AMD and Nvidia’s most well-liked next-gen products had prices that were almost three times the MSRP, making them virtually impossible to find in stock and out of reach for the majority of consumers. Crypto miners, from small-scale operations to massive industrial farms, have received some of the blame since they had the purchasing power to use bots to snag up all the merchandise from online retailers.

It was recently discovered that Ethereum miners spent $15 billion on GPUs in the last two years. This doesn’t even include additional components needed to make a mining rig; it’s just graphics cards. This should give you a sense of the sheer scope of how horrible this may be.

While all this is scary for PC gamers and it certainly helps to be prepared, remember – it’s not guaranteed. We’re seeing signs that history has the potential to repeat itself but that doesn’t mean it will, and there are plenty of things that could happen between now and the launch of next-gen graphics cards. Should ETH finally move over to proof-of-stake, one of the largest issues will be solved off the bat for example.

Keep an eye on market prices if you plan to purchase an RTX 4060 at launch, but for those who can afford it right now, please don’t discount the possibilities of current-gen cards.

We can at least take advantage of some discounted graphics cards before all potential hell breaks loose once more because there are a ton of deals currently available on Radeon RX 6800 XT and GeForce RTX 3080 GPUs, and many of the current-gen offerings will still be an excellent buy for a few years to come.

Leave a Reply

Your email address will not be published. Required fields are marked *