How Bitcoin Mining Is Driving Up The Cost Of PC Graphics Cards
As the price of Bitcoin and other cryptocurrencies have skyrocketed over the last several months, so too has the price of the tools used to mine for the digital currencies, including the cost of graphics cards.
Mid-range and high-end graphics processing units (GPU) from manufacturers like Nvidia and AMD have been in high demand for those hoping to mine for cryptocurrencies like Bitcoin and popular altcoins like Ethereum and Ripple.
According to a report from Polygon , the Nvidia GeForce GTX 1070 graphics card has a suggested retail price of $380 but has been selling for around $450 for the better part of the last year due to high demand and low supply. The card is now going for more than $700 through third-party sellers who have found opportunity to capitalize on the demand.
The prices are up across the board for most graphics cards. Nvidia’s GTX 1060, GTX 1070 and GTX 1080, and AMD’s Radeon RX 570, 580, Vega 56, and Vega 64 cards have all been selling at above their respective suggested retail price in recent months.
Typically those cards would be primarily of interest to gamers building a computer for the purposes of playing their favorite video games at their highest capacity, but the process of mining for Bitcoin and cryptocurrency has created a new market for the graphics processors.
How Do You Mine Bitcoin?
The process of mining for cryptocurrencies requires users to lend their computer processing power to solve complex mathematical equations needed to authenticate transactions across the blockchain—a distributed ledger that keeps track of all sales and purchases of a particular cryptocurrency.
When those equations are solved and the transactions are confirmed, coins are released and provided to people who lend their processing power to the process as a reward for helping complete the process.
Graphics cards aren’t specifically marketed by manufacturers as tools for mining for cryptocurrency—but the companies aren’t hurting from the increased sales, either.
Nvidia saw its stock climb over the course of 2017—almost in line with the value of Bitcoin—and is expected to report another successful quarter to start 2018. Its rival AMD has a bumpier ride over the course of 2017 but reports indicate the company will report strong fourth quarter earning driven primarily for the demand from cryptocurrency miners.
The success of those companies likely brings little satisfaction to gamers who simply want to pay retail price for their preferred graphics card. In recent months, some companies have made the effort to try to make sure gamers aren’t completely priced out of the market that they once were the primary customer for.
Nvidia has told its retail partners to prioritize gamers over miners when marketing its products. Some retailers have taken heed to that advice and are limiting the number of purchases an individual can make to prevent miners from buying cards in bulk—either for their own use or for resale purposes. Retailer Micro Center is offering specially designed discounts to PC gamers that bundles the cards with other gaming components.
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