Rising Price of Graphic Cards ( GPUs ) due to Crypto Mining (By Sayan Das)

 Before 2009, there was no such thing as cryptocurrency. As technology advanced to keep up with the rampant demand, cryptocurrency mining became a reality for many on their home computers. Over the years, the mining process and its efficiency have improved with the use of better hardware. Graphics Processing Units (GPU) have been used in the mining process for years, simply because they are more efficient than their immediate counterparts.

How Do GPUs Help in Cryptocurrency Mining?

Cryptocurrency mining was originally performed using CPUs, or Central Processing Units. However, its limited processing speed and high power consumption led to limited output, rendering the CPU-based mining process inefficient.

Enter GPU-based mining, which offered multiple benefits over the use of CPUs. A standard GPU, like a Radeon HD 5970, clocked processing speeds of executing 3,200 32-bit instructions per clock, which was 800 times more than the speed of a CPU that executed only 4 32-bit instructions per clock.

It is this property of the GPU that makes them suitable and better for cryptocurrency mining, as the mining process requires higher efficiency in performing similar kinds of repetitive computations. The mining device continuously tries to decode the different hashes repeatedly with only one digit changing in each attempt.

GPUs are also equipped with a large number of Arithmetic Logic Units (ALU), which are responsible for performing mathematical computations. Courtesy of these ALUs, the GPU is capable of performing more calculations, leading to improved output for the crypto mining process.

How Cryptocurrency Mining is leading to a worldwide shortage of GPUs?

The past year has been rough for gamers. Just as covid-19 brought in-person entertainment to a halt, the cost of graphics processing units (GPUs) needed to run computer games soared. Graphics cards like Nvidia’s RTX 3080, with a suggested price of $699, have fetched up to $2,400. When bricks-and-mortar stores get a few in stock, buyers queue up overnight.

Prices for all types of chips have risen of late, for myriad reasons. Silicon wafers are scarce. Manufacturers have suffered disruptions. Scalpers use bots to buy up inventory. Chinese-made chips face American tariffs. And demand for personal computers is the highest since 2010.

Prices for GPUs have risen so much that even geriatric graphics cards, such as AMD's RX580, have gained value. It was released in 2017 at a suggested price of $229, and is now listed at more than $700.

In theory, such appreciation could reflect the growing popularity of gaming and machine learning. However, secondhand market data suggest a different cause.

Since 2015 asking prices for six GPUs tracked by Keepa have moved in lockstep with Ethereum’s value. In late 2017 the currency’s first big rally coincided with a surge in listed GPU prices. Once the crypto bubble burst, GPU costs fell back to earth.

Another boom began last year. As Ethereum’s price rose from $107 in March 2020 to $4,400 last month, the value of mining hardware once again followed suit. In six months, the six GPUs' listed prices climbed by 150%. Those of CPUs' barely budged.

The GPU shortage has hurt data scientists and computer-aided-design users as well as gamers. Some relief may be on the way. Ethereum’s price is now 40% below its record high. GPU prices have yet to fall, but if history is any guide, they probably will soon. Moreover, Nvidia has tried to cripple its GPUs' mining power, while promising to sell new cards targeted at miners. It is also cutting back on its output of older products to focus on newer ones.

However, without greater production, customizing chips will not end the shortage. Nvidia’s RTX 3080 Ti, one of its first cards with reduced mining power, is listed on Amazon at double its suggested price.

Meanwhile, Ethereum’s overseers said in May that they will rejig its blockchain to require less computation, and thus less electricity. If implemented, this might lower GPU prices. However, as long as other cryptocurrencies, such as Monero, rely on power-hungry protocols that reward good GPUs, miners will pivot to different coins—and gamers will once again cry foul.

                                                                                             By : SAYAN DAS