As the Ethereum network’s move to a Proof-of-Stake (PoS) consensus mechanism drives adoption by institutional investors, the prices of graphics processing units (GPUs), often used to mine cryptocurrencies such as Ether (ETH), are down in China.
Following the historic Ethereum meltdown on September 15, previously highly coveted Nvidia GeForce GPUs have become considerably cheaper, according to a report by the South China Morning Post. Peng, a Chinese trader, gave the RTX 3080 as an example, as the price of the GPU dropped from $1,118, or 8,000 yuan, to 5,000 yuan in three months.
According to Peng, when Bitcoin (BTC) mining was at its peak in China, mining companies were making purchases of GPUs. But right now, the trader said no one is buying new PCs, let alone new GPUs.
Another trader named Liu also highlighted that lower-end RTX 3080 cards from manufacturers like MSI are also down about 2,000 yuan compared to prices two months ago. According to Liu, this may be heavily influenced by the hype surrounding the Ethereum Merge.
Merchants in stores are not the only ones affected by the lower demand. The online shopping platforms Taobao and JD have also shown a drop in GPU prices. The RTX 3080 cards on these websites have gradually dropped in price by a few hundred yuan compared to their prices three months ago.
After the Ethereum Merge, the blockchain moved from its energy-intensive proof-of-work (PoW) mechanism to the PoS layer, called Beacon Chain. With this, the miners who used to process the transactions and produce blocks are replaced by ecosystem participants who would block ETH to become the new validators of the network.
Meanwhile, a PoW fork called ETHPoW, went live as the merger began. However, despite its attempts to maintain the PoW consensus, it suffered from technical issues when it launched, causing the price of its ETHW token to drop by 65%.
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