The GPU craze that was rampaging across the PC industry for a long time was facilitated mainly by the increased demand from PoW miners who wanted to ramp up production as quickly as possible leaving the market starving for more graphic cards. However, the slowdown in the crypto industry due to the “winter” and the now-completed Ethereum merge made mining unprofitable and returned a massive number of GPUs to the market.
NVidia recently reported a significant reduction in revenue and expected sales. Many factors contribute to the inflow of products into the secondhand market, high prices, and the global recession.
The Proof-of-Stake is the new norm
Despite the variety of alternatives that still operate with the PoW consensus protocol, none of them are as profitable as Ethereum. Even the most promising project Ravencoin is still far behind ETH in profitability and the competition is growing even on networks that were previously obscure diluting the crypto market and reducing the average earnings of miners.
Current PoW networks are not as lucrative for larger miners with hundreds of ASIC units. Many have their farms idling. Surprisingly not many decided to liquidate their GPUs just yet hoping that the next PoW project will take off.
A used NVidia RTX 3080 costs about $500 on the secondhand market. It seems like a relatively small investment for a mining operation, but we should not forget that ETH priced at $1450 at the time of writing is no longer part of the conversation. The next best thing, Ravencoin, promises to bring you $0.3 per day on average, a minuscule amount compared to upfront payments and electricity costs.
Miners are waiting for the next haven
Other projects have similar rates or returns. While some coins have relatively high prices, they are way less popular and have comparatively small trading volumes. An increase in volume may collapse their fragile ecosystems if there is no substance behind the temporary price surge caused by the influx of miners. All around, the situation seems quite pessimistic for the mining community.
Ravencoin, ERGO, and Vertcoin might look promising, but there is an unlikely destination for thousands of ETH mining farms that are currently out of business.