Cryptomania Fuels GPU Price Bubble, Causes Worldwide Shortage

Gamers, casual PC enthusiasts and content creators everywhere have been suffering since the middle of2017 as prices of GPUs (Graphics Processors or Cards) have gone through the roof, even here in SriLanka. These massive increases in retail prices are driven by the cryptocurrency mining craze that reached epic proportions in 2017. Along with increased prices, the high demand from miners has also resulted in massive shortages worldwide.

Cryptocurrencies like Bitcoin and Ethereum shone during 2017. Their astronomical gains led many to believe in them as assets of the future. However, like any system of electronic value transfer, a networkneeds to be in place to facilitate and validate transactions and Crypto Miners provide this transactional network infrastructure.

Crypto Mines are essentially massive computer rigs with 10s if not 100s of GPUs linked together to work on what is called hashing, the solving of complex mathematical problems, in order to validate transactions. In return for their effort, the miners receive a certain amount of the Cryptocurrency they’re validating to keep for themselves.

The craze has taken hold even here in Sri Lanka. We were surprised when we spoke to industry insiders at Unity Plaza, Sri Lanka’s biggest IT mall. While asking to remain anonymous, they confirmed that there was a massive shortage of GPUs, particularly at the high end with many costing more than twice their actual worth, if you can even find one.

The situation has become so bad that retailers here and abroad are now refusing to sell more than a single GPU to an individual, maybe two if it’s clear the person is genuinely setting up a high end computer. According to our sources, there are a number of clandestine, solar powered Bitcoin mines operating in Sri Lanka and these miners are zapping up high end graphics cards like the NVIDIA GeForce GTX 1080 at prices exceeding LKR 120,000/-, which is double what the card is worth. Even mid-range
cards have significant premiums added to their prices.

Companies like NVIDIA and ATI have recently come out strongly against the prevailing status quo, even going so far as to request that retailers restrict bulk sales so that sufficient supplies can be made available for genuine users. These companies have also worked to release mining specific GPUs that are designed especially for cryptomining and provide far superior performance than ordinary consumer cards to ease the situation. This, along with small scale mining becoming less profitable with recent
drops in crypto prices and increased numbers of miners may see the prices of GPUs come down slightly in the future along with supply levels reaching normalcy.

The crypto mining craze has also spawned a plethora of malware that highjacks unsuspecting users’ system resources (CPU,GPU) to run mining software for unscrupulous miners. If you find your computer is slow, warmer than usual or hangs frequently check your task manager to see what’s running in the background. Every so often you’ll find it’s crypto mining malware. Good antivirus/malware software can
help prevent such disasters.

Speaking of mining software, do you know that you can mine cryptocurrencies too? If you have extra computers or keep your computer running at night you can use software such as NiceHash, whichis very easy to install, to mine cryptocurrencies and receive Bitcoin in return for your efforts. Even a small amount can be significant if the uptrend in prices resumes as many expect it to.

But hey, if cryptos crash or don’t recover again properly, the market will be flooded with cheap GPUs and gamers and other users will be spoilt for choice.

What do you think about cryptomania, mining and unscrupulous activity in its name? Let us know in the comments below!

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