The Fate Of GPUS After The End Of Crypto Mining
Cryptocurrencies are undoubtedly an eccentric asset class; though they were established to provide alternative to conventional fiat money, a majority of them are speculative investment tools. To put this into perspective, just look at the large number of online forums that are buzzing about the potential of virtual currencies.
Additionally, digital currencies are generated suing a peculiar method. Instead of being printed periodically or impulsively like fiat currencies, cryptocurrencies are mined. Typically, this mining process requires the deployment of specialized hardware with advanced processing capabilities. When the value of virtual currencies soared rapidly in 2017, a majority of investors resorted to mining.
As a result of the intensified demand for mining rigs, there was a shortage of GPUs all over the world.
The Demand For GPUs
Generating new cryptocurrencies is more of competition than it is a manufacturing process. Fundamentally, the blockchain network operates using the collective processing power of the nodes connected to it.
The first user to solve a complex cryptographic puzzle on the distributed ledger receives the given token as a reward, a process known as mining. For this reason, prospective miners had to purchase high-end graphics cards with massive computing abilities to enable them to compete effectively within the mining pools.
Due to the increased demand for powerful GPUs, coupled up with their limited supply, the volume of sales for these gadgets shot up considerably. Renowned graphics chips manufacturers such as Advanced Micro devices (AMD), Intel, Micron, and NVidia reported an enormous increase in stock during last year’s cryptocurrency craze.
Furthermore, the obsession with digital currencies resulted in a significant increase in the collective processing power of blockchain networks. For instance, the Ethereum network reported an additional $100 million worth of GPU within the first two weeks of June 2017.
Within a relatively short period, GPUs became scarce in the markets, leaving hardcore gamers angry at cryptocurrency miners. On the other hand, the miners were relishing the prospect of raking in large profits from their newly found venture.
However, the good returns that they expected were only short-lived. Among the factors that contributed to the dipping of mining profits include the establishment of corporate mining farms with vast computing resources, overcrowding of individual miners and the introduction of Application Specific Integrated Circuit (ASIC) miners.
For cryptocurrency networks and investors, the premature death of crypto mining is hugely advantageous. This is because mining was only short-term investment option with considerably expensive requirements such as the aforementioned acquisition of high-need GPUs.
Contrariwise, investors who hastily jumped onto the mining bandwagon have been left with vast amount of GPU capability that is presently underutilized. Even worse, most of these miners are struggling to find an application are for these computing resources.
Alternative GPU Use Cases
As mentioned earlier, most of the crypto miners paid hefty prices during the acquisition of the GPUs. Notably, the price of the hardware increased by as much as 80% during the famous cryptocurrency boom of 2017. Now that mining is no longer profitable, investors are disposing their GPUs at throwaway prices. To add to their woes, the prices of GPUs are comparatively lower than last year’s, making it hard to recoup a respectable fraction of the buying price.
According to Marco Iodice, the CEO of Leonard Render, a firm that is finding alternative use cases for dormant GPUs, former miners are compelled to sell the hardware at low prices because it is the only way they can get something out of them. Marco’s company has created a blockchain-driven platform where miners can sell their GPU power to content creators who need such hardware to develop their processor-intensive products.
Similarly, another firm known as VectorDash avails the excess GPU power to AI researchers.
Iodice believes that the alternative use cases for the unused GPU power will continue to increase as the industry evolves, citing the flexibility of GPU as the significant driving factor. Marco also added that innovative entrepreneurs should capitalize on the abundance of affordable GPU power to launch blockchain startups.
Despite the apparent end of the digital currency mining sector, individuals who had invested in it can still make profits. It only takes courage and willingness to adopt a new approach regarding the utilization of their GPU hardware.