Long gone are the days when you’d have to search every corner of the Earth to buy a GPU. We’re currently witnessing the ending of Ethereum mining citing a shift towards Proof Of Stake. Proof Of Work required miners to solve cryptographic puzzles, thus needing the beefy GPU power. However, Proof Of Stake chooses a specific validator, instead of many miners and that too on a ‘merit’ basis to validate a certain node.
A brief explanation regarding Ethereum’s disruption of the GPU market is as follows.
The Crypto Effect
Back when NVIDIA’s Ampere and AMD’s RDNA2 launched, we were already seeing shortages in the first few weeks due to excess demand. However, things took a turn for the worse when the pandemic struck the world. Most people started to work from home, increasing demand for GPUs. Coincidentally, crypto currencies saw a huge spike in their pricing leading to out of the world profits.
This increased demand from miners, overloaded the already burdened and scarce supply of GPUs. This was the perfect recipe for disaster because GPUs are vector processors (What Miners want) but on steroids. Their computational power outmatches even the best CPUs. This is what led to you not getting any GPUs for the past 3 years. Luckily for us, all of this is coming to an end with Proof of Stake (PoS), an integral part of Ethereum 2.0.
Why not mine Bitcoin, you may ask? The main reasons is that Ethereum has (or had after the merge) a relatively low difficulty rate whereas Bitcoin’s difficulty skyrocketed due to excess mining.
The Effect of PoS on GPUs
While PoS only applies to Ethereum (For Now), do bear in mind that ~95% of GPU mining power is directly consumed by Ethereum (Can Vary). People will surely shift to other currencies, but the top dog no longer remains.
This has a direct impact on the GPU prices as the second-hand market is ready to be flooded with used/mined GPUs. The 3090 Ti is now selling for less than $1000 which is a whopping 2x price reduction as compared to MSRP.
For AMD, the RX 6900 XT is now at 69% of its original price. The only discrepancy lies in the lower-end GPUs which are still above MSRP.
Impact on RTX 4000
This is not official, but NVIDIA may bump the pricing because ‘they can‘. The 3090 Ti now sells for less than $1000. The RTX 4090 offering a 2x increase in performance can be priced at $1999, which we sincerely wish is not true. All this happiness can washed over by corporate greed. We expect the next-Gen pricing to be as follows:
- RTX 4090 at $1599
- RTX 4080 16GB at $899
- RTX 4080 12GB at $799
Proof of Stake In A Nutshell
The Ethereum Merge is now in effect with Proof of Stake (PoS) being the first of many additions. Previously with Proof of Work (PoW), miners had to compete for a certain block, effectively wasting a lot of electricity. The new system (PoS) chooses a specific validator instead of a miner who then validates a node. The new method is cheaper because only 1 person does the heavy-lifting (The workload is also decreased as compared to Ethereum 1.0) and the selection is on merit.
Merit = Number of Ethereum Coins one has in their wallet
Anyone can become a validator by depositing just 32ETH as a ‘security deposit’ , officially known as stake’. The more money you have as stake, the higher your chances of being a validator. The con to this strategy is that only the rich get richer. For more information we suggest you to take a look at the official PoS documentation here.
Conclusion
All in all, ETH 2.0 being a massive change, does come in different phases. We here at Appuals will keep you up to date with every massive change brought that impacts the global supply chain.
(Featured Image credit goes to starline)
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