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Submitted via IRC for Bytram
Over the past few months, there has been a GPU shortage, forcing the prices of mid-range graphics cards up as cryptocurrency miners from across the world purchased hardware in bulk in search for quick and easy profits.
This has forced the prices of most modern AMD and certain Nvidia GPUs to skyrocket, but now these GPUs are starting to saturate the used market as more and more Ethereum miners sell up and quit mining. Some other miners are starting to look at other emerging Cryptocurrencies, though it is clear that the hype behind Ethereum is dying down.
Earlier this week Ethereum's value dropped below $200, as soon as the currency experienced a new difficulty spike, making the currency 20% harder to mine and significantly less profitable. This combined with its decrease in value has made mining Ethereum unprofitable for many miners, especially in regions with higher than average electricity costs.
Now Ethereum is valued at less than $150, with the currency costing $134.97 at the time of writing, which is less than half of the currency's peak value. The currency has the potential to bounce back, though it is difficult to see the currency go back over £250 [sic*] in the near future.
On second-hand sales websites like eBay and Gumtree, we have seen a lot of new GPU listing appear in recent days, with plenty of used AMD RX series GPUs appearing over the weekend. More hardware is expected to hit these sites over the coming days as some miners wind down their operations, though many will simply move to a more profitable currency or to invest their computing power into an emerging Cryptocurrency that has the prospect of high values in the future.
Recent related Ethereum/GPU coverage: Ethereum Mining Craze Leads to GPU Shortages; and Cryptocoin GPU Bubble?
[* I'm not sure where they got a pound value from, or why, but a little bit of research shows ethereum peaked at $401 on June 13. (Needs javascript from *.coindesk.com and *.hotjar.com). Ooops, spent too long editing this, it went out before I'd completed my changes, sorry -- Ed.(FP)]
(Score: 4, Interesting) by MrGuy on Monday July 17 2017, @03:48PM (3 children)
It's not clear to me that the link between "the value of the currency fell and suddenly everyone is selling their mining rig" is as obvious as TFA seems to make it out.
It's been the case for awhile that "casuals" can't really mine cryptocurrencies with space CPU cycles - this is why big GPU heavy rigs are required to mine the currencies in the first place.
If you're putting many thousands of dollars into building a mining rig, you're looking at the long haul. It takes YEARS to get a return. Are there people who didn't do the math and are now caught out? Maybe. But it's also the case that if you spent thousands of dollars, you KNOW you're not coming close to breaking even selling your rig for used parts. Either you ride it out and make what you can mining Ether, or you switch to some OTHER currency where you think you can make more. But it's hard to believe that there's a mass movement to disassemble rigs and sell them for parts, presumably to other miners.
Please. Take a look at Bitcoin or Etherium or any other cryptocurrency over time and tell me that the value trend is highly predictable or stable.
"It's difficult to see..." the value of a currency "bounce back" to the level it was at less than 3 months ago? Citation needed. The value of a currency isn't tied to any question of "how easy is it to mine?" It's possible that the current value is the long term value. But anyone with a long term focus (e.g. almost anyone who dropped thousands on a mining rig) isn't going to sell off their hardware for pennies on the dollar betting that things will never recover.
You're going to need to cite more than "we've seen a lot of new listings!" anecdotally to credibly predict a trend. Compared to WHAT? What's the baseline and where's the spike?
Some alternate explanations - there was a shortage before, and now manufacturers have caught up, so there's less demand for used equipment than there was before, forcing the SAME amount of used supply to eBay instead of bulk sales. Or, maybe people are building fewer mining rigs (because the long-term economics look less favorable right now), so auctions are lasting longer, leading to more visible on the site when you look. Neither explanation is consistent with "people are selling off mining rigs en masse."
The prediction that "some miners (will) wind down their operations" in the near future is unsupported and (again, in my opinion) a tenuous one. It's guaranteeing a long-term loss. The notion of "turning attention elsewhere" is a more likely one.
(Score: 2) by FatPhil on Monday July 17 2017, @04:27PM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 3, Interesting) by DECbot on Monday July 17 2017, @06:43PM
I can't dig for the article now, but I seem to recall that there were two key events that would directly change the economic model of mining Ethereum.
My memory isn't perfect, and I haven't been following cryptocurrencies, but the headlines I've been seeing in regards to Ethereum scream that the currency should lose value rapidly as the easy mining conditions evaporated.
I can see rigs being decommissioned or being switched from ETH to another currency, but not getting parted out by the miners themselves. My hunch is it is like some of the other posters have said and the perceived additional used GPUs available are not related to mining rigs. I wonder if these are refurbished boards that the manufactures are unleashing onto ebay to get rid of them. On the other hand, perhaps these were GPUs from leased mining rigs that are getting parted out by the manufacturer after the lease is ended.
cats~$ sudo chown -R us /home/base
(Score: 1) by khallow on Tuesday July 18 2017, @06:00PM
Everything I've heard about these markets is either you make the investment back inside of a year or GTFO. There's no room for playing the long game due to the massive decline in the expected return of your rig over time due both to the difficulty spikes (which by themselves will eventually make the gear uneconomic to run unless you have access to free electricity) and to the competition with faster gear that enters the market in the future.
The rest of your analysis looks on the spot. If you have invested in this gear, win or lose, you still have to make a decision whether to keep the lights on. You aren't going to get much of anything when you let go of the equipment (particularly, if bunches of other people have the same idea). So the tail end of the life of this equipment is going to almost completely depend on whether they can do computations more valuable than the electricity they consume. Once that's no longer true, then it's time to turn it off and get what you can out of selling the equipment. Having alternate currencies to tackle or other computation markets out there can extend the lifespan of your gear.