Steep decline in cryptocurrency market has miners dumping their GPUs on Ebay

[Syt]

http://www.pcgamer.com/steep-decline-in-cryptocurrency-market-has-miners-dumping-their-gpus-on-ebay/

Steep decline in cryptocurrency market has miners dumping their GPUs on Ebay

Ethereum, one of the most popular cryptocurrencies, is becoming more difficult to mine. At the same time, volatility is rearing its welcome head, and the value of Ethereum is now less than half of what it was around a month ago. As a result, profitability is way down, and some miners are putting their GPUs up for sale on second-hand sites such as Ebay, CoinDesk reports.

While it is difficult to predict anything when it comes to cryptocurrencies, we are cautiously optimistic that GPU pricing should start trending back to normal in the coming weeks. That could change at the drop of the hat, of course, but with the way things are now, miners are less motivated to stock up on GPUs and mine Ethereum.

That was not the case a month ago when Ethereum reached an all-time high of $300 before recording another high of more than $400 a short while later. More and more miners jumped on the crytpocurrency bandwagon in hopes of making some extra dough, and maybe even eventually striking it rich, as some early adopters of Bitcoin did. But since then, Ethereum has fallen in value, declining to a low of $133 over the weekend. It's currently trading at around $170-$180.

It has also become more difficult to mine over the past month. Have a look at the steep trend line from the beginning of June until now:



From our vantage point, the difficulty in mining has caused about a 10 percent drop in profitability, while the falling price has made Ethereum mining 50 percent (or more) less profitable. Power costs remain constant, so where an RX 580 might have grossed up to $5 per day next last month, it will now only gross around $1.70. That means instead of a net profit of $4, it's now down to a net gain only $1.25 (at a power cost of $0.10 per kWh). Generally speaking, it looks like a typical miner might have to wait six months or more to pay for a GPU hardware investment, compared to two or three months.

This is a good thing for gamers. While crytpocurrencies like Bitcoin (SHA256) are far more easily mined on ASIC hardware, othere's like Ethereum (Dagger-Hashimoto) and ZCash (Equihash) use algorithms that are resistant to ASIC hardware. Combined with Ethereum's spiking value, miners went running for the hills with as many GPUs as they could carry in what became a modern day gold rush.

This resulted in a shortage of many desirable graphics cards from both AMD and Nvidia. The best bang-for-buck options for gaming are also great options for mining, but there just aren't enough parts to meet the demand of both markets. Cards like the Radeon RX 570 have been out of stock or grossly overpriced by third-party vendors, such as this Gigabyte Aorus Radeon RX 570 going for $550. And that's not even the most expensive RX 570 SKU out there. PowerColor's Red Devil variant is listed on Newegg (through a third-party) for $639.

It's a crazy situation, but here's hoping that recent events restore some sanity to the graphics card market. There's an RX 580 8GB currently in stock at Newegg for 'only' $310, which is still way over MSRP, but the coming weeks should see inventories and prices start to return to normal. If you'd rather not wait for inventory levels to even out, you can also check second-hand sites for deals.

Also, if you hope to capitalize on miners dumping their GPUs, buyer beware: http://www.pcgamer.com/is-it-safe-to-buy-a-used-graphics-card-thats-been-mining-247/

[Zanza]

I think I understand how you can use blockchain to make distributed ledgers and transactions more transparent and safe, but I am not sure I get the appeal of crypto currencies. What are they good for? Illegal transactions that cannot be handled in real world currencies?

[Admiral Yi]

I agree.  I can't see any other possible use for crypto currencies.

[Eddie Teach]

It really seems like the article should explain what mining cryptocurrency is.

[Syt]

It really seems like the article should explain what mining cryptocurrency is.

Many Cryptocurrencies are basically designed around solving certain equations in a community effort. "Mining" means solving the equations that credit you said currency. The number of solutions for the equations might be finite finite, or at least has sharply diminishing returns, limiting the total supply of the currency. That makes it harder to mine new currency, requiring more and more processing power. Miners are looking for processors that are most effective in "mining" the currency. New currencies that become popular can create rushes, much like goldmining, to acquire it quickly and efficiently.

[CountDeMoney]

[crazy canuck]

It really seems like the article should explain what mining cryptocurrency is.

Many Cryptocurrencies are basically designed around solving certain equations in a community effort. "Mining" means solving the equations that credit you said currency. The number of solutions for the equations might be finite finite, or at least has sharply diminishing returns, limiting the total supply of the currency. That makes it harder to mine new currency, requiring more and more processing power. Miners are looking for processors that are most effective in "mining" the currency. New currencies that become popular can create rushes, much like goldmining, to acquire it quickly and efficiently.

I think the translation is: mining is find people that will buy into the scheme. 

[The Brain]

The pyramids have stood for thousands of years, as enduring testament to human ingenuity and perseverance. There are worse schemes out there.

[Grey Fox]

It really seems like the article should explain what mining cryptocurrency is.

Many Cryptocurrencies are basically designed around solving certain equations in a community effort. "Mining" means solving the equations that credit you said currency. The number of solutions for the equations might be finite finite, or at least has sharply diminishing returns, limiting the total supply of the currency. That makes it harder to mine new currency, requiring more and more processing power. Miners are looking for processors that are most effective in "mining" the currency. New currencies that become popular can create rushes, much like goldmining, to acquire it quickly and efficiently.

I think the translation is: mining is find people that will buy into the scheme.

Mining is supply.

[Josquius]

It really seems like the article should explain what mining cryptocurrency is.

Many Cryptocurrencies are basically designed around solving certain equations in a community effort. "Mining" means solving the equations that credit you said currency. The number of solutions for the equations might be finite finite, or at least has sharply diminishing returns, limiting the total supply of the currency. That makes it harder to mine new currency, requiring more and more processing power. Miners are looking for processors that are most effective in "mining" the currency. New currencies that become popular can create rushes, much like goldmining, to acquire it quickly and efficiently.

But the solving the equations has no actual value beyond earning you the currency correct?
They exist just to waste large amounts of energy purely to create unique currency keys?

Would be nice if one could exist that at least rewards people for putting their processing time towards something useful.

[viper37]

What are they good for? Illegal transactions that cannot be handled in real world currencies?

A huge part of it is just that, illegal transactions.  Just like the anonimity provided by the Dark Web, it has very legitimate reasons, like journalists in 3rd world countries, but it's mostly used for illegal stuff.

But the other part is the weirdos who seem to believe that having a currency tied to government policies is pure evil.

[The Minsky Moment]

I think I understand how you can use blockchain to make distributed ledgers and transactions more transparent and safe, but I am not sure I get the appeal of crypto currencies. What are they good for? Illegal transactions that cannot be handled in real world currencies?

Correct. but illegal transactions is a very big business and the crypto-currencies have a competitive advantage.

[Tamas]

I think apart from the illegal stuff is just stockbrokers being happy to inflate whatever bubble they can find.

[Grey Fox]

It really seems like the article should explain what mining cryptocurrency is.

Many Cryptocurrencies are basically designed around solving certain equations in a community effort. "Mining" means solving the equations that credit you said currency. The number of solutions for the equations might be finite finite, or at least has sharply diminishing returns, limiting the total supply of the currency. That makes it harder to mine new currency, requiring more and more processing power. Miners are looking for processors that are most effective in "mining" the currency. New currencies that become popular can create rushes, much like goldmining, to acquire it quickly and efficiently.

But the solving the equations has no actual value beyond earning you the currency correct?
They exist just to waste large amounts of energy purely to create unique currency keys?

Would be nice if one could exist that at least rewards people for putting their processing time towards something useful.

With bitcoin, the equations are transaction verifying.

[crazy canuck]

It really seems like the article should explain what mining cryptocurrency is.

Many Cryptocurrencies are basically designed around solving certain equations in a community effort. "Mining" means solving the equations that credit you said currency. The number of solutions for the equations might be finite finite, or at least has sharply diminishing returns, limiting the total supply of the currency. That makes it harder to mine new currency, requiring more and more processing power. Miners are looking for processors that are most effective in "mining" the currency. New currencies that become popular can create rushes, much like goldmining, to acquire it quickly and efficiently.

I think the translation is: mining is find people that will buy into the scheme.

Mining is supply.

And without people willing to buy into the scheme there is no market.