Bitcoin and other popular cryptocurrencies such as litecoin, ripple, and Ethereum soared in value in Q3 of 2020, thanks to the unwavering interest from many investors. As the price of bitcoin increased, graphic cards also saw a big price increase mainly because of the retail stock shortages. A wide range of high-end and mid-range graphic cards from NVidia or AMD are in high demand, primarily because cryptocurrency miners are buying the computer chips in bulk to build powerful machines to mine cryptocurrency.
A recent report shows that NVidia’s GeForce GTX 1070 should retail for about £273, but some graphic cards are currently retailing for over £502 because of the stock shortages and high demand – an increase of over 80%. Bitcoin miners use several graphic cards to solve different mathematical problems needed to authenticate transactions within the network and create a bitcoin. With only a limited number of bitcoin available for mining, and since that’s the way that this network is designed, every single bitcoin needs more power. This has resulted in increased demand for powerful graphics cards to handle multiple cryptocurrencies.
Gamers Desperate For Graphic Chips Struggling To Get Them
The global shortage of graphic chips has become a nightmare for avid PC gamers mainly because they can’t seem to get them. The shortage can be attributed to the fact that cryptocurrency miners are buying semiconductors in bulk.
Essentially, it has become almost impossible for the average person to purchase an NVidia graphics card if they aren’t willing to pay the high prices. The imbalance in demand and supply has become so bad that Newegg; an online PC store is now conducting lotteries every week for people to buy the graphics card at a 60% rise. The shortage has also fueled smuggling with the recent report of a Hong Kong fishing vessel found carrying about 300 NVidia cards. Furthermore, frustrated PC gamers are now flooding Internet message boards and forums with posts over lack of availability and price gouging.
Much of the increased demand for these cards is from PC gamers looking to play their favorite games with high graphical performance. Although NVidia Corp. has said that the shortage isn’t caused by crypto miners; the surge in bitcoin prices is without a doubt worsening NVidia’s shortages.
Cryptocurrency miners use graphics cards to mine new cryptos by doing mathematical work to verify transactions for virtual money. Unfortunately, for gaming aficionados, NVidia’s graphic cards are perfectly suited for mining bitcoin, the most popular crypto. The prices of bitcoin have skyrocketed since Q3 of 2020, making bitcoin mining more profitable.
While more enthusiastic buyers may sound great for the chipmaker, there is a problem, in that cryptocurrency mining demand isn’t predictable and might prove unsustainable. However, these customers tend to disappear immediately after the coin prices start dropping. For example, back in 2018 when bitcoin prices were surging, this resulted in shortages of the graphics card. However, when the price dropped later the same year, crypto miners flocked second-hand shops with used graphic cards, adversely affecting the chipmaker’s prices.
Nonetheless, the chipmaker doesn’t want history to repeat itself. NVidia Corp has made progress in trying to ensure gamers aren’t affected. The company recently launched products that don’t have display outputs, tailor-made for crypto mining. Also, it has installed special software for some of the cheaper cards, which cuts the efficiency of bitcoin mining, making them less appealing for non-gamers.
But even though specialized crypto mining cards could help curb the shortage, the volume is pretty small. And especially because most bitcoin miners prefer ordinary gaming cards due to the fact that they have better resale values. As a result, NVidia might have to go an extra mile to impede the mining demand for its new products if the company really wants to make a huge impact. Rather than one card, the company needs to make permanent software and hardware changes to lower the crypto mining efficiency across their lineup. Also, the company should consider working with retailers in order to find new ways to stop the shopping bots. One of the things they can do is limit the orders per billing address or household.
To sum up, the only way through which cryptocurrency miners have ruined the gaming world is bulk buying graphics cards, which exacerbated their shortage. Many PC gamers are frustrated because of this shortage because they can no longer get the new graphic cards to enjoy the latest titles with optimal performance.
Bloomberg. (n.d.). Bloomberg – Are you a robot?. https://www.bloomberg.com/opinion/articles/2021-04-14/nvidia-risks-a-reckoning-as-crypto-miners-deprive-gamers-of-graphics-cards
Nvidia limits crypto-mining on new graphics card. (2021, February 18). BBC News. https://www.bbc.com/news/technology-56114508