Crypto Mining and GPU Prices : Not a Good Mix. Here is a Solution

The advent of cryptocurrency is undoubtedly one of the best things to happen in this century and possibly will stand the test of time.

While you can purchase and invest in some cryptos, many people opt for crypto mining as a steady mean of income.

What is Mining

In simple words, when a system solves a block in blockchain, that system is rewarded with some crypto coins as a tip. In this case, the system is usually a computer, which utilizes its processing capabilities to solve the blocks in the chain. However, as the blocks are solved in a chain, the difficulty level of solving subsequent blocks increases which means the same system will take more time to solve the next block. One simple solution to this problem is to increase your computational power to reduce time to solve blocks and hence earn money faster.

This is easier said than done. Enhancing computational power requires some serious fiat that you will need to spend on equipment and electricity bills and then hope that the cryptos you will earn, will give you some profit after paying the bills and equipment cost.

But the real question is whether CPU is enough to compute complex algorithms such as blockchains in a reasonable time? The answer is No and this is where GPU comes.

What is a GPU

GPU is Graphics Processing Unit that have been around for quite sometime now. Their initial requirement appeared for gaming since the special graphics processor is able to render textures faster hence providing smooth gaming experience without stutters or graphical glitches.

It wasn’t too late when people realized the power of GPU in complex algorithmic computations by tricking GPUs to take algorithms as textures.

Now i won’t go into the details and science behind it but GPUs have since become very famous.

There are two major companies that design and develop graphics cards.
AMD and Nvidia.

An Nvidia GPU

An AMD GPU

Normally the graphics cards are priced reasonably since the whole point of these are to bring in people towards PC gaming.

Cards are designed for all types of gamers starting from entry level, mid range to enthusiast level costing about 100$, 200$ to 400$ respectively. The graphics card architecture is then transferred to 3rd Party Companies like Gigabyte, Asus, XFX, Zotac, Powercolor etc who then create their own cards with some improvements like multiple cooling fans and factory based overclocking.

The Crypto Mining Through GPUs

It wasn’t long after the advent of mining when people realized the efficiency of GPUs in mining cryptos. The rate at which the system solves an algorithm is called “Hash per second” or “h/s”. In simple equation, the higher the hashrate, the more money.

A 6 GPU based Mining Rig

Inadvertently, some people (read : alot of people) went crazy and designed some massive mining rigs attaching upto 6 GPUs with a single system. This is crazy...

GPU prices post mining boom

But the real crazy is what i am about to inform you. When GPU companies realized the potential of their GPUs, they hiked up the prices to a point that an entry level card became mid ranged card. The mid ranged became enthusiast level and enthusiast level cards became down right ridiculous in prices.

Even though AMD and Nvidia always set regular MSRP for their new products yet somehow they are nowhere to be found as the aftermarket cards are sold way over 100% to 200% price of original MSRP.

And of course greed always gets the better of people because there are some who are neither gamers nor miners and yet they procure huge chunks of graphics cards at their launch only to create shortage in supply and then resell those with at least 100-200$ profit per card. However, these culprits are not the reason for price hike of GPUs. Its the miners.

Miners Are The Reason For Price Hike

Miners need to stop right here. They are not helping anyone by buying ridiculously high prices GPUs because they think that crypto mining will recover their investment. While this may be true for most miners, they are actually endorsing the high prices by continously buying GPUs at whatever price companies are setting.

Just to give you an idea, AMD launched its HBM2 memory based Vega 56 and Vega 64 GPUs last year that were prices at 399$ and 499$ respectively. In February, 2018 Vega 56 was selling at around 700$ and Vega 64 was selling at around 1000$.

Thats almost double the original price. The worst part is that these GPUs were still being purchased at these prices thereby, encouraging companies to ramp up the prices even further.

Possible Solution

Mine Cryptos Through Other Means

Besides ASICs, i cant think of anything else other than our very own Steemit. When i dived into crypto world last year, my first priority was to set up a mining rig myself. However when @ilyastarar introduced me to steemit and steem blockchain, i was immediately drawn to the idea of being a blogger and get paid for my articles instead of consuming huge amount of electricty and running my pc for 24/7/365 for small chunks of altcoins.

This is not some biased crap. The stats speak for themselves. I joined steemit in October, 2017, which makes it roughly 9 months or so. During that time, i have been a somewhat semi active user of the platform and during this time i have earned some 560 Steem and roughly 500 SBDs without consuming electricity or fiat on GPUs.

Now lets compare it with a 6 GPU mining rig. A standard AMD Rx 580 costs about 300$ And dishes out some 28 MH/s.

6 RX 580s = 1800$
Power consumption = 700 Watts
Total Hashrate = 168 MH/s

So after subtracting the electricity bills, this is what you will earn on mining ethereum

A mere 98$ a month. Multiply it with 9 months (same amount i have been on steemit) gives you 882$ in earnings.

BUT WAIT

We haven’t subtracted the cost of GPUs which was 1800$. So subtracting that will give you a nice -918$, which means its gonna take you another 9 months to reach breakeven and after that your GPUs (if not all then definetely some of them) will probably smoke out due to constantly running for consecutively 18 months without taking a break. And the cycle begins again.

This is madness. This is not profitable at all.

On the other hand, i have effectively used those earned SBDs to buy different other coins like smartcash, EOS, ethereum, bitcoin, Cardano etc.

Whats the Takeaway from this Article

The conventional mining, as lucrative as it may seem, is not profitable at all now that network difficultly has increased on most coins like ethereum. Stop being mad, start making a profit for yourself. Come to steemit and mine through the power of your brain which is about million times stronger than any of those mining rigs.

Leave GPUs alone for gamers 😏

Upvotes and resteems will definetely help me reach out to other people. Comments are more than welcome.