Effect of GPU prices on Ethereum Miners
Effect of GPU prices on Ethereum Miners, GPU costs have been progressively declining in recent months as demand from Ethereum miners has decreased. Here are some of the variables that are fueling this trend.
Throughout much of last year, it was not uncommon to see GPUs trade for hundreds of dollars more than the suggested retail price. Because of the scarcity of units, some Ethereum miners have resorted to mining on their computers. However, since demand for Ethereum miners has decreased, this trend appears to be reversing.
Since at least the beginning of 2022, prices for GPUs (graphics cards) have been steadily declining
Since the beginning of the year, Mark D’Aria, CEO of Bitpro Consulting, a retailer of secondhand GPUs, has seen prices drop by 3 percent to 4% per week.
The business keeps track of the selling prices of over 40 GPU models, ranging from entry-level to high-end. The average of that index was $760 on December 5 and $453 on April 17, according to data provided with The Block. Effect of GPU prices on Ethereum Miners
D’Aria told The Block, “What we’re really witnessing here is a change in demand away from miners.” High Ethereum mining income explain why, in 2021, the industry “totally” controlled the pricing of these GPUs, whereas there was “little any demand” from miners in previous years, he noted.
In May 2021, Ethereum mining income reached a new high
However, since November of last year, that figure has been declining, with a minor recovery in March and April 2022. Meanwhile, the network is getting closer to adopting a proof-of-stake consensus process that does not require GPUs.
As a result of miners scaling down their investments and “some sell pressure,” Ethan Vera, COO of Luxor, which runs an Ethereum mining pool, noted that Ethereum hash rate growth has halted dramatically in 2022 compared to last year. Pools allow miners to pool their hashing power and increase the likelihood of finding a block jointly. Effect of GPU prices on Ethereum Miners
Ethereum’s hash rate increased by roughly 604.72 terahash/second (TH/s) between January 1, 2021 and January 1, 2022, according to statistics from The Block Research. It has risen steadily in recent months, although at a lesser pace. The hash rate increased by 106.94 TH/s from January 1 and May 2.
An inclination to sell
Ethereum’s move from proof of work to proof of stake has been in the works since 2016, and despite several delays, developers successfully tested proof-of-stake on mainnet last month. Tim Beiko, an Ethereum core engineer, recently stated that “the merging” will most likely take place a few months after June.
GPUs will be obsolete as a result of the change. While proof-of-work requires miners to solve difficult mathematical problems, validators stake ETH in order to participate in the system and are selected at random to produce new blocks.
Change over to new coins
D’Aria further said that some miners who have continued to grow have the false belief that if Ethereum switches to proof-of-stake, they would simply be able to move on to mining other coins.
In actuality, he argued, when hashrate shifted to those other coins, profitability would plummet. Effect of GPU prices on Ethereum Miners