The soaring popularity of cryptocurrencies is having an increasing number of unprecedented side-effects. Headlines have already been made about developing issues such as ICO scams, environmental concerns and governmental regulation which, a couple of years ago, few would have foreseen. And it seems that another one is developing; Bitcoin (BTC) and Ethereum (ETH) miners are heavily driving up the price of computer hardware, as graphics card demand soars.
For perspective, the recommended retail price of Nvidia’s (NASDAQ:NVDA) GTX 1070 graphics card is $380 USD. But if you want one from Amazon (NASDAQ:AMZN) right now, you’re forking out more than $700, according to reports. This is 80% above their recommended retail price. And it’s not just this one. Whole ranges of mid-to-high-end graphics cards from manufacturers such as Nvidia and AMD are increasing in price. Nvidia’s GTX 1060 card could be bought for around $200 in April last year, say Digital Trends. Yet this has more than doubled now. But what’s going on?
You may already know that cryptocurrency mining uses up an awful lot of computer power and energy. Powerful computer hardware is often stacked together in huge ‘mining farms’ in order to solve the mathematical problems necessary to generate new digital coins such as Bitcoin and Ethereum. And miners have discovered that one component, in particular, is well-suited for the job. You guessed it; graphics card chips. Consequently, miners have been buying them in bulk amounts, leading to severe retail shortages and a fear within the gaming industry.
The issue is that these graphics cards are designed for use in gaming computers in order to maximize image quality. For years, video game enthusiasts have been constructing gaming PCs or upgrading existing ones in order to be able to play new, graphically intensive games while enjoying smooth frame-rates and a better picture. It is considered much cheaper to do it this way than to buy a pre-built computer from a company. Though all this may be coming to a pretty abrupt end soon.
In an attempt to remedy the issue, Nvidia is advising retailers to prioritize sales to gamers rather than miners. Speaking to Computer Base, a Nvidia spokesman said: “For Nvidia, gamers come first… we recommend that our trading partners make the appropriate arrangements to meet gamers’ needs as usual.” Already, retailers such as Micro Center in the U.S. is limiting the number of cards which can be supplied in one go, preventing bulk purchases. In addition, they will provide discounts to customers who purchase bundled gaming components as this suggests they will actually be using them for, well, gaming. In a statement from their website, Micro Center said: “High demand from cryptocurrency miners, combined with constrained shipment from vendors, has created industry-wide shortages.”
Other than these small efforts though, there really isn’t a quick solution. PC gaming is getting expensive, which will likely force less well-off gamers to settle for low-end graphics cards (which are not as useful to miners), or nothing at all. There are unfounded rumors that Nvidia and AMD are making dedicated mining cards in order to bring down the price of gaming ones. Until that is proven though, all gamers can hope for is that either miners lose interest, or the crypto-bubble bursts entirely.
Featured image: Glide Digital