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GPU shortages because of some kind of crypto something?

MightyUncleanMightyUnclean Member EpicPosts: 3,531
in Hardware
I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

Thanks!

Comments

  • QuizzicalQuizzical Member LegendaryPosts: 25,483
    Suppose that you realize that if you buy a video card for $500 and run some particular software on it, people will pay you $100/month for the results.  It won't really take that long to get enough money to pay off the cost of the card, and then any money after that will be profit for you.  How many of those video cards do you want to buy?

    The answer that some miners come up with is, as many of them as we possibly can.  Which definitely includes all of the ones in stock.  So they buy them all as soon as they show up and gamers can't get them.

    You might wonder, why would anyone pay you $100/month for the results of computations that you run on your video card?  Who would pay a bunch of money for that?  The short answer is, morons do.

    There are really two categories of morons buying cryptocurrencies.  One is the true believers who think that traditional currencies such as the dollar, euro, pound, and yen are going to go away and be replaced by cryptocurrencies such as bitcoin or ethereum.  So they figure that if all of the bitcoin in existence "only" costs 1/3 as much as all of the US dollars in existence (and the ratio literally is around there right now), then they should get rid of their dollars and buy bitcoin because that's going to be what people want in the future.

    The other and larger category is speculators.  Some people look at charts like this:

    https://coinmarketcap.com/currencies/ethereum/

    and then say, well, it's gone up in the past, and we really have no idea why, but maybe it's going to keep going up.  So we should buy more now because it's going to keep going up and then we can sell later.

    If you're familiar with the concept of a bubble in economics, this is the largest, most spectacular bubble of all time.  Centuries from now, it's more likely that 2020 will be known more for the great cryptocurrency bubble than for COVID.  Pandemics come and go, but what's actually happening in real life with cryptocurrencies is far too bizarre to make decent fiction.

    Speculators in bubbles rely on what is derisively called the "greater fool" theory.  It basically says, yeah, I'm paying massively more for this than it's worth, and that's really foolish to do.  But there will soon come an even greater fool who will pay even more for it than I just did, and I can sell it to him at a profit.

    Of course, the bubble eventually collapses when the greater fool doesn't show up, and you're stuck holding some assets that you massively overpaid for.  In the case of cryptocurrencies, some people are going to realize that they've exchanged their life savings for some fairly random bits of data that no one finds interesting for their own sake, so it really has a proper value of $0.  And believe me, the meaning of the bits is thoroughly uninteresting, even to the sort of people who find Sloane's Integer Sequences fascinating:

    https://oeis.org

    But the miners who are buying all of the video cards don't really care who is buying the cryptocurrencies they mine or why.  All that they care about is that someone buys them, and so they'll keep buying video cards and keep mining.  The miners aren't bearing the brunt of the risk, as if suddenly no one buys what they mine, they still have the physical video cards and can sell them to recover much of their investment.
    GdemamiAbscissa15TheocritusScotKidRisk
  • AbimorAbimor Member RarePosts: 915
    Thanks Quizz,
    I at least somewhat  understand now. 
    Gdemami
  • QuizzicalQuizzical Member LegendaryPosts: 25,483
    One other point worth making is that video cards with 4 GB of or less of video memory can no longer be used to mine Ethereum, so the miners will generally leave such cards alone.  Unfortunately, that tends to be lower end cards, and it also leaves many gamers fighting over few cards, so they're likely to still sell out.  But it does mean that some cards like this can hang around a little longer at prices that aren't completely crazy:

    https://www.newegg.com/asrock-radeon-rx-570-rx570-4g/p/N82E16814930010

    (That's in stock at $210 as of this post, by the way.)
  • CleffyCleffy Member RarePosts: 6,413
    What sparked the last demand in crypto was that businesses could use it to get around foriegn currency exchanges and balance their books quickly. The market was also more globalized. Using an old reference, if I wanted to make a pencil, I would need to source material from 4 different countries. Using crypto to facilitate the transfer of assets is much quicker and could allow for on demand procurement.
    That usage was effectively halted by the 2017 tax reform law and trade wars. It is my understanding that the 2017 tax law is set to automatically expire. Although global supply chains are still in shambles. Right now I think we are actually seeing the preparation of that return. However, there are more price stable cryptos like tether which may be more ideal in this role.

    I don't think the crypto-miners are going to buy out the cards over $1000. It doesn't make sense to when a lower price card achieves the same results. What happened last time is all the cheap AMD midrange cards were bought out at nearly $800 over msrp, while the high end gpus were mostly untouched. The shortage probably has more to do with limited production right now and a shortage of gddr6. 
  • Abscissa15Abscissa15 Member UncommonPosts: 70
    An additional factor, albeit non-crypto related, is the scalper. When the silicon and substrate shortages first appeared (raw materials for graphic card production), some progressive individuals began purchasing all of the video cards as soon as they hit retail websites. You may call these entrepreneurs or unscrupulous greedy sons of bitches depending on your viewpoint. Their effective tool is the bot. Using a bot program, a person can grab up stock the instant that it gets posted on a retailers website. In cases where you wait and get notifications for stock availability, you get thwarted by bots. In the time that it takes to populate the billing and shipping fields on the online order form, the bot program has already maxed out the purchases for its "owner". The scalpers then post these precious graphics cards on eBay or Amazon for anywhere from a 50-300% markup. Go humans. In my case I've been waiting for a RTX 3090 since they were announced and have thus far been foiled at every opportunity. The individual consumer in this case is currently at a severe disadvantage.


    Gdemami
  • TheocritusTheocritus Member LegendaryPosts: 9,974
    edited January 2021
    I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

    Thanks!

    I feel like I have time warped and am in a world that I do not know,,,,All the crypto and bitcoin crap makes no sense to me....Life used to be so much simpler and it is only getting worse.....Things like crypto and bitcoin come across to me as get rich quick schemes aimed at the greed of most people.
    Gdemami
  • lahnmirlahnmir Member LegendaryPosts: 5,050
    Theocritus said:
    I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

    Thanks!

    I feel like I have time warped and am in a world that I do not know,,,,All the crypto and bitcoin crap makes no sense to me....Life used to be so much simpler and it is only getting worse.....Things like crypto and bitcoin come across to me as get rich quick schemes aimed at the greed of most people.
    The most basic version? First you had physical money, now you have digital money in the shape of a bank account and credit cards. First you had physical valuables like gold and diamonds, now you have digital ones in the shape of crypto. And just like gold and diamonds and the such crypto has no intrinsic value. How much people desire it and are willing to spend on it is what gives it its value.

    /Cheers,
    Lahnmir
    Gdemami
    'the only way he could nail it any better is if he used a cross.'

    Kyleran on yours sincerely 


    'But there are many. You can play them entirely solo, and even offline. Also, you are wrong by default.'

    Ikcin in response to yours sincerely debating whether or not single-player offline MMOs exist...



    'This does not apply just to ED but SC or any other game. What they will get is Rebirth/X4, likely prettier but equally underwhelming and pointless. 

    It is incredibly difficult to design some meaningfull leg content that would fit a space ship game - simply because it is not a leg game.

    It is just huge resource waste....'

    Gdemami absolutely not being an armchair developer

  • SylvinstarSylvinstar Member UncommonPosts: 158
    MightyUnclean said:
    I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

    Thanks!
    This did cause a shortage, but that was a while ago..unless its happening again? I've recently seen a surge in articles about Bitcoin lately..
  • SylvinstarSylvinstar Member UncommonPosts: 158
    lahnmir said:
    Theocritus said:
    I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

    Thanks!

    I feel like I have time warped and am in a world that I do not know,,,,All the crypto and bitcoin crap makes no sense to me....Life used to be so much simpler and it is only getting worse.....Things like crypto and bitcoin come across to me as get rich quick schemes aimed at the greed of most people.
    The most basic version? First you had physical money, now you have digital money in the shape of a bank account and credit cards. First you had physical valuables like gold and diamonds, now you have digital ones in the shape of crypto. And just like gold and diamonds and the such crypto has no intrinsic value. How much people desire it and are willing to spend on it is what gives it its value.

    /Cheers,
    Lahnmir
    Diamonds and Gold have tons of intrinsic value? Try telling your computer and electronics to do without gold for connections, or try telling the guy cutting concrete with his diamond tipped blade to go back to using a chisel. Not trying to be sarcastic here..just looking for clarification.
  • lahnmirlahnmir Member LegendaryPosts: 5,050
    Sylvinstar said:
    lahnmir said:
    Theocritus said:
    I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

    Thanks!

    I feel like I have time warped and am in a world that I do not know,,,,All the crypto and bitcoin crap makes no sense to me....Life used to be so much simpler and it is only getting worse.....Things like crypto and bitcoin come across to me as get rich quick schemes aimed at the greed of most people.
    The most basic version? First you had physical money, now you have digital money in the shape of a bank account and credit cards. First you had physical valuables like gold and diamonds, now you have digital ones in the shape of crypto. And just like gold and diamonds and the such crypto has no intrinsic value. How much people desire it and are willing to spend on it is what gives it its value.

    /Cheers,
    Lahnmir
    Diamonds and Gold have tons of intrinsic value? Try telling your computer and electronics to do without gold for connections, or try telling the guy cutting concrete with his diamond tipped blade to go back to using a chisel. Not trying to be sarcastic here..just looking for clarification.
    You have a good point, but this is not what gave gold and diamonds their value in the first place, that was simply being pretty and scarce.

    /Cheers,
    Lahnmir
    Gdemami
    'the only way he could nail it any better is if he used a cross.'

    Kyleran on yours sincerely 


    'But there are many. You can play them entirely solo, and even offline. Also, you are wrong by default.'

    Ikcin in response to yours sincerely debating whether or not single-player offline MMOs exist...



    'This does not apply just to ED but SC or any other game. What they will get is Rebirth/X4, likely prettier but equally underwhelming and pointless. 

    It is incredibly difficult to design some meaningfull leg content that would fit a space ship game - simply because it is not a leg game.

    It is just huge resource waste....'

    Gdemami absolutely not being an armchair developer

  • ScotScot Member LegendaryPosts: 24,271
    Just like Tulips in the seventeenth century you can never have enough GPU's.
    Ridelynn
  • QuizzicalQuizzical Member LegendaryPosts: 25,483
    Cleffy said:

    I don't think the crypto-miners are going to buy out the cards over $1000. It doesn't make sense to when a lower price card achieves the same results. What happened last time is all the cheap AMD midrange cards were bought out at nearly $800 over msrp, while the high end gpus were mostly untouched. The shortage probably has more to do with limited production right now and a shortage of gddr6. 
    Last time, you had a situation where Nvidia's GDDR5X controller choked on the random table lookups of ethereum mining, so Nvidia's GTX 1080 and 1080 Ti weren't nearly as fast at it as you'd expect on paper.  That led miners to ignore those particular cards for a while.  If a Radeon RX 470 is faster than a GeForce GTX 1080 at mining and you're buying the cards for mining, the GTX 1080 doesn't make sense to buy until the it's cheaper than the RX 470 that has 1/3 of its MSRP.
  • ScotScot Member LegendaryPosts: 24,271
    edited January 2021
    The only thing I would question about Quizzzical's analysis is that when the bubble bursts miners are going to be looking at a huge devaluation in the cost of second hand GPU's. As to how long this can continue, well I think you can still make money out of it, what's more important is how much you can potentially loose. If you spent 2k on GPU's you should at least bank the first 2k (plus extra electricity costs) you make before you spend a penny of your earnings. But remember there is a big risk factor here and when the bubble bursts it will happen overnight, actually speculating on Crypto is not a recipe for a good nights sleep!
  • QuizzicalQuizzical Member LegendaryPosts: 25,483
    Scot said:
    The only thing I would question about Quizzzical's analysis is that when the bubble bursts miners are going to be looking at a huge devaluation in the cost of second hand GPU's. As to how long this can continue, well I think you can still make money out of it, what's more important is how much you can potentially loose. If you spent 2k on GPU's you should at least bank the first 2k (plus extra electricity costs) you make before you spend a penny of your earnings. But remember there is a big risk factor here and when the bubble bursts it will happen overnight, actually speculating on Crypto is not a recipe for a good nights sleep!
    If you bought a video card for near MSRP and the mining bubble bursts, you likely won't get back quite what you paid.  But you could get back quite a bit.  Maybe you paid $500 for a video card and can only sell it used for $300.  That's still a lot more than $0, and a lot of people holding cryptocurrency are going to get $0.
    GdemamiScot
  • kitaradkitarad Member LegendaryPosts: 8,164
    edited January 2021
    It's is clearly a terrible time to buy a new computer. 

    The way they abuse the graphic card means the cards don't actually have a long life. This means whatever use they get is also short term. I certainly would not buy a  second hand card after the cryptocurrency bubble bursts, chances are your card might conk out the very next day.
    GdemamiAsm0deus

  • QuizzicalQuizzical Member LegendaryPosts: 25,483
    kitarad said:
    It's is clearly a terrible time to buy a new computer. 

    The way they abuse the graphic card means the cards don't actually have a long life. This means whatever use they get is also short term. I certainly would not buy a  second hand card after the cryptocurrency bubble bursts, chances are your card might conk out the very next day.
    Ethereum might not be the worst for that.  The Ethereum mining algorithm mostly consists of doing a bunch of random lookups to a table that is currently a little over 4 GB in size.  That really hammers on the memory controllers, but it leaves the compute units mostly idle, and that's what burns most of the power.  Serious miners are likely to underclock and undervolt most of the GPU considerably to save power, though they may also overclock the memory controllers.

    That said, a GPU with a failing memory controller is still a dead card.  So you're right that they're riskier than used GPUs of the same age might otherwise be.  But they're less risky than if they had been running something more computationally heavy around the clock, such as Bitcoin mining.
    kitaradGdemami
  • ArglebargleArglebargle Member EpicPosts: 3,465
    lahnmir said:
    Sylvinstar said:
    lahnmir said:
    Theocritus said:
    I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

    Thanks!

    I feel like I have time warped and am in a world that I do not know,,,,All the crypto and bitcoin crap makes no sense to me....Life used to be so much simpler and it is only getting worse.....Things like crypto and bitcoin come across to me as get rich quick schemes aimed at the greed of most people.
    The most basic version? First you had physical money, now you have digital money in the shape of a bank account and credit cards. First you had physical valuables like gold and diamonds, now you have digital ones in the shape of crypto. And just like gold and diamonds and the such crypto has no intrinsic value. How much people desire it and are willing to spend on it is what gives it its value.

    /Cheers,
    Lahnmir
    Diamonds and Gold have tons of intrinsic value? Try telling your computer and electronics to do without gold for connections, or try telling the guy cutting concrete with his diamond tipped blade to go back to using a chisel. Not trying to be sarcastic here..just looking for clarification.
    You have a good point, but this is not what gave gold and diamonds their value in the first place, that was simply being pretty and scarce.

    /Cheers,
    Lahnmir
    Diamonds are a huge scam.  They are actually pretty common gemstones. The supply is controlled, and then combined with a huge, long term advertising campaign.   The old De Beers company was sitting on tons and tons of diamonds, slowly  doling out supplies to maintain a high price, and then making a meta advertising push for diamonds as a girl's best friend.  Wedding ring requirements.  ETC. When Blood Diamonds became an issue, they started buying them up wholesale and keeping them off the market, to stop the negative connotations. 

    Diamonds are a real interesting study in economics.

    Just like cryptocurrency will be.
    GdemamiScot

    If you are holding out for the perfect game, the only game you play will be the waiting one.

  • Slapshot1188Slapshot1188 Member LegendaryPosts: 17,585
    Arglebargle said:
    lahnmir said:
    Sylvinstar said:
    lahnmir said:
    Theocritus said:
    I'm getting old and out of touch.  Is it true that there's currently a graphics card shortage because they're being bought up by cryptocurrency miners, or something?  I don't even understand what cryptocurrency is.  Would someone be so kind as to explain, in simple terms, what's going on?

    Thanks!

    I feel like I have time warped and am in a world that I do not know,,,,All the crypto and bitcoin crap makes no sense to me....Life used to be so much simpler and it is only getting worse.....Things like crypto and bitcoin come across to me as get rich quick schemes aimed at the greed of most people.
    The most basic version? First you had physical money, now you have digital money in the shape of a bank account and credit cards. First you had physical valuables like gold and diamonds, now you have digital ones in the shape of crypto. And just like gold and diamonds and the such crypto has no intrinsic value. How much people desire it and are willing to spend on it is what gives it its value.

    /Cheers,
    Lahnmir
    Diamonds and Gold have tons of intrinsic value? Try telling your computer and electronics to do without gold for connections, or try telling the guy cutting concrete with his diamond tipped blade to go back to using a chisel. Not trying to be sarcastic here..just looking for clarification.
    You have a good point, but this is not what gave gold and diamonds their value in the first place, that was simply being pretty and scarce.

    /Cheers,
    Lahnmir
    Diamonds are a huge scam.  They are actually pretty common gemstones. The supply is controlled, and then combined with a huge, long term advertising campaign.   The old De Beers company was sitting on tons and tons of diamonds, slowly  doling out supplies to maintain a high price, and then making a meta advertising push for diamonds as a girl's best friend.  Wedding ring requirements.  ETC. When Blood Diamonds became an issue, they started buying them up wholesale and keeping them off the market, to stop the negative connotations. 

    Diamonds are a real interesting study in economics.

    Just like cryptocurrency will be.
    "A diamond is forever" is one of the most successful marketing campaigns of all time.

    All time classic  MY NEW FAVORITE POST!  (Keep laying those bricks)

    "I should point out that no other company has shipped out a beta on a disc before this." - Official Mortal Online Lead Community Moderator

    Proudly wearing the Harbinger badge since Dec 23, 2017. 

    Coined the phrase "Role-Playing a Development Team" January 2018

    "Oddly Slap is the main reason I stay in these forums." - Mystichaze April 9th 2018

  • QuizzicalQuizzical Member LegendaryPosts: 25,483
    Slapshot1188 said:
    Arglebargle said:
    lahnmir said:
    You have a good point, but this is not what gave gold and diamonds their value in the first place, that was simply being pretty and scarce.

    /Cheers,
    Lahnmir
    Diamonds are a huge scam.  They are actually pretty common gemstones. The supply is controlled, and then combined with a huge, long term advertising campaign.   The old De Beers company was sitting on tons and tons of diamonds, slowly  doling out supplies to maintain a high price, and then making a meta advertising push for diamonds as a girl's best friend.  Wedding ring requirements.  ETC. When Blood Diamonds became an issue, they started buying them up wholesale and keeping them off the market, to stop the negative connotations. 

    Diamonds are a real interesting study in economics.

    Just like cryptocurrency will be.
    "A diamond is forever" is one of the most successful marketing campaigns of all time.
    All of the diamonds in the world that have ever been mined are slowly turning into graphite.  The chemically stable form of carbon at room temperature and pressure is graphite, not diamond.  It takes an extremely long time for diamonds to turn into graphite, but they're definitely not forever.
    Gdemami
  • Slapshot1188Slapshot1188 Member LegendaryPosts: 17,585
    Quizzical said:
    Slapshot1188 said:
    Arglebargle said:
    lahnmir said:
    You have a good point, but this is not what gave gold and diamonds their value in the first place, that was simply being pretty and scarce.

    /Cheers,
    Lahnmir
    Diamonds are a huge scam.  They are actually pretty common gemstones. The supply is controlled, and then combined with a huge, long term advertising campaign.   The old De Beers company was sitting on tons and tons of diamonds, slowly  doling out supplies to maintain a high price, and then making a meta advertising push for diamonds as a girl's best friend.  Wedding ring requirements.  ETC. When Blood Diamonds became an issue, they started buying them up wholesale and keeping them off the market, to stop the negative connotations. 

    Diamonds are a real interesting study in economics.

    Just like cryptocurrency will be.
    "A diamond is forever" is one of the most successful marketing campaigns of all time.
    All of the diamonds in the world that have ever been mined are slowly turning into graphite.  The chemically stable form of carbon at room temperature and pressure is graphite, not diamond.  It takes an extremely long time for diamonds to turn into graphite, but they're definitely not forever.
    Yup... in a billion years or so people might be able to sue De Beers.

    Asm0deus

    All time classic  MY NEW FAVORITE POST!  (Keep laying those bricks)

    "I should point out that no other company has shipped out a beta on a disc before this." - Official Mortal Online Lead Community Moderator

    Proudly wearing the Harbinger badge since Dec 23, 2017. 

    Coined the phrase "Role-Playing a Development Team" January 2018

    "Oddly Slap is the main reason I stay in these forums." - Mystichaze April 9th 2018

  • cheyanecheyane Member LegendaryPosts: 9,385
    Always loved the Jane Russel version





    I think these ladies helped make diamonds even bigger.
    Scot
    Garrus Signature
  • CleffyCleffy Member RarePosts: 6,413
    There are practical reasons people choose diamonds. They are the hardest abundant natural substance. For a gemstone they will retain their luster verse other clear gemstones. There is some market manipulation, but for the most part it is difficult to mine and shape diamonds.
    ScotGdemamikitarad
  • ScotScot Member LegendaryPosts: 24,271
    cheyane said:
    Always loved the Jane Russel version





    I think these ladies helped make diamonds even bigger.
    They made something bigger for sure.
    kitaradArglebargle
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