Prices for many popular GPUs, such as Nvidia’s RTX3080, are down nearly 60% in the last 90 days in some parts of the world.
Ethereum’s long-awaited transition to a proof-of-stake (PoS) consensus mechanism went live on September 15, finally putting its old transaction woes behind it. Until now, the network is capable of processing between 20,000 and 100,000 transactions per second (tps), up from its previous rate of just 30 tps.
Furthermore, with the merger, the Ethereum network has become up to 99.9% more energy efficient compared to its previous version, thus allaying fears about its excessive energy consumption, a criticism that still lingers quite strongly in relation to Bitcoin ( BTC).
Amid these advances, however, there is one question that has continued to pique the interest of many cryptocurrency enthusiasts: “What happens to the graphics processing unit market now that the transition is over?”
It is worth noting that after the Merger, the blockchain transitioned from its energy-intensive proof-of-work (PoW) mechanism to a PoS framework.. As a result, miners who used to process transactions and produce blocks have been replaced by ecosystem participants who can now stake their Ether (ETH) holdings to become validators for the network. As a result, mining focused on Ethereum’s graphics processing units (GPUs) has been completely removed from the picture.
numbers don’t lie
Following the completion of the update, the value of numerous coveted GPUs has dropped quite drastically. For example, reports indicate that the value of Nvidia’s very popular RTX 3080 has dropped from $1,118 to approximately $700 (in the last three month stretch) within China. Similarly, the price of GPUs made by firms like MSI has dropped $280 since the end of July.
To get a better idea of whether these price drops could have been influenced by the hype surrounding the Ethereum merger, Cointelegraph contacted Crypto White, the pseudonymous CTO of ZK.Work — a test mining platform. zero knowledge. He noted that before the Merger, ETH had a total of 860 TH/s of hashing power, of which less than 200TH/s went to Ethereum Classic (ETC) and ETHW, a PoW fork of ETH that went live afterward. of the upgrade, along with other mining projects, while 660TH/s was temporarily shut down.
Referring to the ETC hash rate chart shown above, White noted that incoming hash power appears to have been gradually leaving the network since mid-September, i.e. at the time of the merger. In this sense, it is speculated that the price of ETC did not rise as expected, since the influx of this computing power led several miners to close their operations permanently. White added:
“This shows that the cryptocurrency mining market has a lot of idle GPUs and traditional mining revenues cannot support their running costs, so they are shutting down and facing the choice of waiting for new mining opportunities or selling them off. second hand”.
In addition, he stated that many second-hand NVIDIA 30-series GPUs have recently entered the secondary market for sale, further lowering their price. Nevertheless, as potentially lucrative short-term minable coins continue to enter the market, White believes these GPUs could once again find their usefulness.
What awaits the GPU market?
As is evident by now, the merger of Ethereum has been a significant technical and industrial improvement for the cryptocurrency mining sector as a whole. Ilman Shazhaev, founder and CEO of blockchain gaming metaverse Farcana, has stated to Cointelegraph that despite this apparent setback, the GPU industry is now an evergreen niche, especially with the continual emergence of different PoW protocols every day. What’s up:
“Despite the transition, there is no reduction in the number of protocols that require GPUs and this will help maintain demand for these devices in the near future. Also, with the gradual adoption of metaverse-focused innovations, the demand for GPUs, which are a key component of most gaming consoles, will continue.”
In White’s opinion, GPUs aren’t going to get much cheaper anytime soon, as their prices have most likely stabilized around their current ones. In fact, he believes that the price changes we’re seeing now were “already accounted for” before the merger, adding that in order to boost the launch of their next GPUs, manufacturers like Nvidia had already started clearing their inventories long ago. According to him, the price of used GPUs is very high:
“I think the price of second-hand GPUs will slowly decrease, and low-end GPUs are likely to disappear from the market altogether. On the other hand, I think the demand for high-end GPUs will increase.”
Lastly, it should be noted that in a scenario where there are no tokens to mine, it stands to reason that GPU prediction rates would also suffer, as manufacturers will most likely go back to their “production” processes. to order”, as the mining boom of recent years had led to a massive build-up of stocks.
ETH Price Action Lackluster Despite Increased Efficiency
As noted above, with the conclusion of the Fusion, Ethereum’s power consumption has dropped a staggering 99.9%, resulting in a 0.2% reduction in global power consumption. However, despite these significant gains, ETH’s price action has been extremely poor, almost unexpected in the eyes of many.
As can be seen from the chart above, since September 16, the altcoin has slid from $1,630 to its current price point of $1,330, showing a loss of about 22%. In this sense, experts believe that this lack of positive momentum in the price could be due to the fact that the upward movements had already been discounted in the value of the coin a couple of weeks before the update.
Therefore, Even though the Ethereum network has gotten rid of GPU mining altogether, it is possible that some sectors of miners are still trying to keep their cash cow running, as evidenced by the fact that several proposals to copy the Ethereum blockchain, like ETHW, retaining mining capabilities, have gained some traction. That said, while it is fairly easy to develop such a token, it is extremely difficult to convince people to use it. So it will be interesting to see how the future of the various Ethereum PoW forks and the GPU market unfolds from here on out.
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