Prices for many popular GPUs, such as Nvidia’s RTX3080, have dropped nearly 60% in some parts of the world in the past 90 days.
Ethereum’s long-awaited transition to a Proof-of-Stake (PoS) consensus mechanism began on September 15, finally pushing long-standing transaction issues aside. At this point, the network can now process between 20,000 and 100,000 transactions per second (TPS), as opposed to the previous speed of just 30 TPS.
The consolidation also resulted in the Ethereum network being 99.9% more energy efficient than its previous iteration, thereby allaying concerns about excessive power consumption, a criticism that still remains quite harsh on Bitcoin (BTC) .
But among these developments, there is a question that continues to interest many crypto enthusiasts: “What will happen to the GPU market now that the transition period is over?”
It is worth noting that after the merger, the blockchain moved from a power-intensive proof-of-work (PoW) mechanism to a PoS platform. As a result, the miners who used to process transactions and generate blocks have now been replaced by ecosystem participants who can stake their ether.
holdings to become network validators. As a result, mining of graphics processing units (GPUs) based on Ethereum has been completely eliminated.
The numbers don’t lie
After the upgrade was completed, the cost of many in-demand GPUs plummeted. For example, reports show Nvidia’s hugely popular RTX 3080 has dropped from $1,118 in China to around $700 (in the past three months). Similarly, the price of GPUs from companies like MSI has dropped $280 since the end of July.
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Cointelegraph turned to Crypto White, the pseudonym of the CTO of ZK.Work, a zero-knowledge proof mining platform, to better understand whether the Ethereum merger hype was responsible for this price drop. He stated that before the merger, Ethereum had a total of 860 TH/s, of which less than 200 TH/s came from Ethereum Classic and after upgrading to ETHW, a fork of Ethereum with PoW. In mining projects, 660 TH/s was temporarily closed.
Referring to the Ethereum Classic hash rate chart above, White noted that the incoming hash rate has been gradually going off the network since mid-September, i.e. since the time of consolidation. In this context, the price of Ethereum Classic
The flow of this computing power has not increased as expected as several miners have gone out of business for good. White added:
“This shows that there are a large number of idle GPUs in the cryptocurrency mining market, and traditional mining revenues cannot cover their operating costs, so they are closing and are faced with the possibility of waiting for new mining opportunities or selling used ones.”
It also claimed that many used NVIDIA 30-series GPUs had recently entered the secondary market for sale, further pushing down GPU prices. However, as potentially lucrative mineable coins continue to hit the market in the near future, White believes these GPUs could find use again.
What’s next for the GPU market?
As has been clear so far, Ethereum Merge has served as a major technical and industrial upgrade for the cryptocurrency mining industry as a whole. Despite this apparent setback, the GPU industry has become an ageless niche, especially as various PoW protocols continue to emerge every day, Ilman Shazhaev, founder and CEO of the blockchain gaming metaverse Farcana, told Cointelegraph. He said he came
“Despite the transition, the number of protocols that need GPUs is not decreasing, and this will help support demand for these devices in the near future. In addition, with the gradual introduction of metaverse-focused innovations, there will continue to be demand for GPUs, a key component of most game consoles.”
According to White, GPUs won’t get much cheaper anytime soon, as their prices are likely to be locked in at current prices. In fact, he believes the price changes we’re currently seeing were “already taken into account” prior to the merger, adding that makers like Nvidia started dumping their stock some time ago to jumpstart their launches. future GPUs. he said:
“I believe in the price of a used GP