Graphics Cards Get Cheaper As Bitcoin Mining To Reduce Further

With Ethereum, a major cryptocurrency, announcing a change in its algorithm, graphics card prices are expected to get even more cheap.

In recent years, the prices of graphics cards had reached unimaginable levels.

While all microchips were affected by this, graphics cards, which contain a microchip processor called GPU, in particular, were even more affected.

In fact, so much so were the prices that some graphics cards were sold at twice the MSRP prices.

Take Nvidia GeForce RTX 3090 Ti graphics cards for example which have an MSRP of $1999. The MSI Gaming GeForce RTX 3090 Ti 24GB, according to price tracker Keepa, was being sold at almost $4,500 on Amazon.com just a few months ago. It’s currently priced at $1,400.

Imagine paying $4,500 for a graphics card. While this is an extreme example, such a crazy increase in prices were seen across various graphics card models.

This had happened mainly due to two reasons.

The first reason was the pandemic induced international lock-downs and work from home meant that people were spending more time in home. This led many to spend more time on their computers and laptops and other gadgets. This led to a major increase in the demand and lock-downs meant that supply wasn’t able to fulfill it.

The second reason was the cryptocurrency mining. In recent years, we have seen many people invest in cryptocurrency and also indulged themselves in it’s mining. This is where graphics cards are used by some cryptocurrencies to mine the crypto-coins.

Environmental impact

Mining of Bitcoins and other cryptocurrencies has an impact not only on the graphics card prices, it has had an impact on the environment too due to global increase in energy consumption. In-fact, data analytics site Statista, quoting Cambridge Centre for Alternative Finance’s Bitcoin Electricity Consumption Index, had reported in 2021 that Bitcoin mining was consuming more electricity than some big countries in the world.

Just for example, Bitcoin mining was consuming 143 Terawatt-hour (TWh). Compare that to just 56 TWh used by countries like Switzerland. That’s how bad bitcoin mining has been.

It must be mentioned that, unlike the popular belief, Bitcoin is neither the only cryptocurrency out there neither it’s the main contributor to the graphics cards prices being so high. The main culprit for the graphics card prices and power consumption due to mining from graphics cards is Ether. It is the cryptocurrency from Ethereum. It’s look like it’s going to change soon.

Ethereum’s Algorithm Changes

Ethereum has announced, starting 15th of September this year, it’s going to move from Proof-of-work (PoW) protocol to Proof-of-stake (PoS) one. It’s calling it “The Merge”.

Proof-of-work meant that graphics cards were used for mining Ethereum cryptocurrency. Now switching to Proof-of-stake means graphics cards basically will not be required for mining cryptocurrency and instead servers will generate them for you – to put it in an extremely simple language.

It’s not a new thing, though. It’s been in the works since December 2020. When Ethereum announced depreciation of Proof-of-work graphics card mining protocol in October 2021, we saw a gradual decrease in mining with graphics cards.

Mining Ban And Reduction In Power Consumption

Bitcoin Mining Council, a voluntary global forum of Bitcoin mining companies, in its press released had noticed a 25% decrease in energy usage by Bitcoin mining in Q1 2022.

A big contributor to this was a ban. In September 2021, China decided to ban all cryptocurrency transactions. This meant that the biggest country contributing to the cryptocurrency mining was theoretically out of the race in Bitcoin mining.

To understand the impact of China’s contribution to Bitcoin mining, one needs to look at total international mining numbers. According to Cambridge Centre for Alternative Finance’s Mining Map, China was responsible for 75% of world’s Bitcoin mining in September 2019. Even a year later, in 2020, China’s share was 67%. Compare that to just 21% in January this year. While latest figures are not being shown, we expect the numbers to decrease further.

All this has had a direct impact on the graphics card prices.

Continuous Decrease In Graphics Card Prices

German analytics site 3DCenter reports that for the first time ever, graphics cards are going below MSRP levels in Germany.

It touched 294% of MSRP levels in May 2021 and decreased to 97% of MSRP levels in August 2022 this month.

See how graphics card prices started decreasing. After one, things opening up, two, Chinese ban slowly taking effect and Ethereum announcing change in its protocol and it not being profitable anymore to mine cryptocurrencies anymore.

With newer reports emerging that graphics card companies are trying their best to sell all the current inventories before launching the new-gen graphics cards, it’s expected that the current generation of graphics cards will continue to get even cheaper for everyone.

Graphics Cards Get Cheaper As Bitcoin Mining To Reduce Further