Ethereum Cryptocurrency Mining Continues to Impact NVIDIA and AMD GPU Supply

After spending years in the shadow of its console brethren, PC gaming has exploded in popularity. What was once a wasteland of afterthought ports and occasional landmark releases from PC gaming giants like Blizzard and Valve, the computer games industry is reaching new heights. PC gaming hardware revenue hit an all-time high in 2016, posting 30 billion dollars worth of sales. Players trying to upgrade existing machines or looking to jump into the hobby for the first time will be in for a shock when they see current market pricing on entry-level and mid-range GPUs. Graphics cards that were champions of value as recently as two months ago are in extremely short supply or being resold at astronomical prices due to the recent rise of Ethereum mining.

Ethereum is a cryptocurrency that made its public debut in the summer of 2015. Like its hugely popular predecessor, Bitcoin, Ethereum saw a mammoth increase in market value in the first half of 2017. In the same week Bitcoin was being traded over $3000 for the first time, Ethereum celebrated a milestone 5000 percent increase in value over what it traded for on January 1st. Gains of that magnitude are impossible to ignore. Ether mining is bigger than you think. The current estimate for annualized global Ethereum mining power consumption is at 4.69 terawatt-hours. This amount of power consumption closely aligns with the annual power consumption of the entire country of Moldova. Imagine that everyone in Moldova is an 8GB RX 580. I know I am.

Bitcoin went through a boom period years ago that saw GPUs typically used for gaming put to work to mining. As more and more Bitcoins were successfully mined, the overall difficulty of mining increased. As time passed, specialized ASIC computing devices were released that were much more efficient at mining than your typical consumer GPUs. Pricing and availability of these ASIC miners rendered general purpose GPU mining setups unprofitable for Bitcoin miners. The rush to obtain GPUs for Bitcoin mining died out and its effect on hardware pricing dissipated.

Unlike Bitcoin, Ethereum was designed to be resistant to ASIC miners. Modern GPUs have once again become the tool of choice for those looking to cash in on the latest cryptocurrency gold rush because they are good at general purpose computing. When choosing hardware for mining, the best option is a device that can achieve a high hash rate while consuming as little electrical power as possible. In the spring of 2017, the GPUs delivering the most Ether mining bang for the buck were the AMD Radeon RX Polaris series. Introduced as the RX 480 and RX 470 last summer (and rebadged and sold as the RX 570 and 580 in 2017), AMD’s mid-range gaming GPUs were offered in the $160-250 range with prices reflecting the amount of onboard VRAM or customizations from AMD’s add-in-board partners. By early June, most brick and mortar stores and online vendors had sold through what stock was available. Pricing on new cards soared towards $400 on the reseller market. Secondhand card pricing also ballooned as thousands of opportunistic gamers chose to unload their Polaris cards for a serious profit.

With mid-range Polaris GPU supply exhausted and no relief in sight, miners turned to buying the next best option, NVIDIA’s Pascal-based GTX 1060. Released in the summer of 2016, the multiple variants of the GTX 1060 were positioned against the AMD Polaris line and sold for similar prices. While less efficient at Ethereum mining than its AMD RX counterparts, the GTX 1060 cards were available and priced at a point that made them worth the investment for miners. The sudden rise in Ethereum value also had a positive effect on the value of other cryptocurrencies, several of which were more friendly to the NVIDIA architecture in regards to hash rates. NVIDIA’s more powerful GTX 1070 GPU became the next target for prospectors. 

Supply strains were intensified on the GTX 1070 due to mining and from the sudden influx of prospective buyers who wanted the GPU for gaming purposes. While the AMD Polaris RX launches have been successful for AMD, the company has been unable to deliver GPUs capable of competing with NVIDIA’s high-end Pascal cards. PC gamers who unloaded their Polaris-based cards to miners had the cash available to buy a replacement card from the next-highest performance tier. Because AMD has no market offering in this performance class, those buyers upgrading from Polaris cards have no option other than the NVIDIA’s GTX 1070. Available at a MSRP of $349, the GTX 1070 quickly disappeared from retailers and is currently pushing $500 on the reseller market. At $500, the GTX 1070 offers no value for gamers. The much more powerful GTX 1080 can be had for it’s $500 MSRP.

NVIDIA’s top-end Pascal cards, the GTX 1080 and GTX 1080 Ti, have been immune to the Ethereum mining craze due to incompatibilities with mining software and the GDDR5X memory the cards use. Retail availability of these cards has remained steady throughout the early summer, but some of the cards are becoming harder to find. PC gamers that sold their AMD RX Polaris and GTX 1070 cards to miners have been buying the top-tier Pascal cards because no other option exists. Prospective customers that would have purchased the AMD or NVIDIA GPUs in the $150 price range are now turning to the slower, ultra-budget GPUs. Cards that have been comfortably in the $99-120 range for a year are now selling for close to twice that from retailers like NewEgg and Amazon. 

In the current GPU market, the speed and value that PC gamers have come to expect from technological advancements and competition have evaporated. Getting “bang for the buck” only applies to graphics cards that sell for over $500 and only from one vendor (NVIDIA). AMD is expected to announce its competitor to NVIDIA’s high-end Pascal line at the 2017 SIGGRAPH conference. It is not currently known how the new AMD cards, called RX Vega, will perform against the NVIDIA models or at what prices the cards will sell for. There has been no early word on how wide retail availability will be on these new cards and if it will be enough to ease some of the pressure on the GPU market. Gaming benchmarks will be important, but just as much focus will be placed on the RX Vega’s mining efficiency. Will the AMD loyal PC gamers be able to buy the new RX Vega before miners snatch them up?

Chris Jarrard

Contributing Tech Editor

Chris Jarrard likes playing games, crankin' tunes, and looking for fights on obscure online message boards. He understands that breakfast food is the only true food. Don't @ him.