Are cryptocurrencies to blame for high GPU prices?(blog.libove.org)
blog.libove.org
Are cryptocurrencies to blame for high GPU prices?
https://blog.libove.org/posts/are-crypto-currencies-to-blame-for-high-gpu-prices/
351 comments
But we do need more energy.
Energy can fix essentially any problem we have. Need to desalinate water? Energy. Need to heat your Arctic home? Energy.
Being able to use energy in crazy and inefficient ways is a feature, not a bug. Everything you ever do outside of subsistence level agriculture is proof of that.
The ideal state of being would be one in which we have limitless fusion power or similar and we basically just do whatever we wish. If we get that and alchemy we win the Universe.
The problem is in not pricing in externalities. If I have a fusion reactor in my garden then I can use as much of it as I want and it has no negative effect on you.
If we tax carbon heavily then Bitcoin and friends will actually get us to that future more quickly.
That politicians are fucking around with stuff like low emission zones and labels on meat or whatever rather than just taxing carbon is almost genocidal at this point. It's hilariously off the mark.
Energy can fix essentially any problem we have. Need to desalinate water? Energy. Need to heat your Arctic home? Energy.
Being able to use energy in crazy and inefficient ways is a feature, not a bug. Everything you ever do outside of subsistence level agriculture is proof of that.
The ideal state of being would be one in which we have limitless fusion power or similar and we basically just do whatever we wish. If we get that and alchemy we win the Universe.
The problem is in not pricing in externalities. If I have a fusion reactor in my garden then I can use as much of it as I want and it has no negative effect on you.
If we tax carbon heavily then Bitcoin and friends will actually get us to that future more quickly.
That politicians are fucking around with stuff like low emission zones and labels on meat or whatever rather than just taxing carbon is almost genocidal at this point. It's hilariously off the mark.
> we do need more energy
Sounds like ideology to me. I, for one, need many thing from basic food to nice music, but energy on its own in not in that list.
I wonder what people picture when they say "energy" but probably not that thing that is equivalent to movement and that is always a constant by definition (at least here and now), and that increase entropy when we manipulate it (entropy being that thing every life forms is designed to fight).
Anyway, carbon in the atmosphere may be a bigger problem than a fusion reactor in your garden, yet I'm a bit concerned by how much faster "we" could destroy our environment by producing more useless stuff if it became cheaper to do so.
Sounds like ideology to me. I, for one, need many thing from basic food to nice music, but energy on its own in not in that list.
I wonder what people picture when they say "energy" but probably not that thing that is equivalent to movement and that is always a constant by definition (at least here and now), and that increase entropy when we manipulate it (entropy being that thing every life forms is designed to fight).
Anyway, carbon in the atmosphere may be a bigger problem than a fusion reactor in your garden, yet I'm a bit concerned by how much faster "we" could destroy our environment by producing more useless stuff if it became cheaper to do so.
> I, for one, need many thing from basic food to nice music, but energy on its own in not in that list.
Energy is a dependency of both of the things you listed - and an abundance of energy makes those things more accessible to more people, yourself and myself included.
Energy is a dependency of both of the things you listed - and an abundance of energy makes those things more accessible to more people, yourself and myself included.
It's also a dependency of everything detrimental. My point was: it's not central in itself, but is framed to appear so because of ideology.
> The ideal state of being would be one in which we have limitless fusion power or similar and we basically just do whatever we wish. If we get that and alchemy we win the Universe.
No, using energy inevitably changes the state of world we live in (that is actually the point). Use crazy amounts of energy in a distributed and unregulated manner, and the world will be nowhere like the one we evolved in, and we will die.
No, using energy inevitably changes the state of world we live in (that is actually the point). Use crazy amounts of energy in a distributed and unregulated manner, and the world will be nowhere like the one we evolved in, and we will die.
"therefore there's absolutely no way prices of hardware and energy will return to normal until governments won't stop this nonsense." It will stop once the crypto prices reach parity with the hardware investments plus or minus further speculation.
Can you be more specific here? I see no mechanism for this to happen. Difficulty will simply increase from that point.
I believe they mean that once is gets to a point where crypto mining is no longer profitable (revs < costs) the demand for more powerful machines / tech will decrease
At least on the ethereum side they are moving to a Proof of Stake system which doesn't require the insane hardware and energy that Proof of Work consensus requires. So there will be some relief on the horizon.
Also, I expect over time that fewer cryptos will use Proof of Work. Unless you're Bitcoin/Ethereum, proof of work chains get attacked all the time. Look at Ethereum Classic.
Also, I expect over time that fewer cryptos will use Proof of Work. Unless you're Bitcoin/Ethereum, proof of work chains get attacked all the time. Look at Ethereum Classic.
How many years has etherium been putting off proof of stake now? Two? Three?
I gave up on crypto because of the failed promise of proof of stake in ethereum especially. We are talking 2015 here. AFAIR it’s been minimum 6 years. Tezos has been looking interesting though I never looked in detail anymore. OCaml based, COQ checked code base and truly proof-of-stake last time I checked? Did anyone play with it in here? I know Ubisoft jumped on the lets-create-artificial-scarcity-where-we-can NFT hype train for some DLC. A terrible idea on the whole which should never find traction but interesting to me again because it’s apparently built on greater Tezos “stack”.
Tezos has the largest grass roots adoption after ethereum for nft art. It’s very under the radar so I’m glad you asked. It has a burgeoning ecosystem and many users on ethereum are aware and have used tezos. As tezos ecosystem evolves, I believe it’s going siphon off a large amount of users from ethereum.
Proof of stake has been running for a year already. https://beaconcha.in
They are currently working on merging the v1 and v2 chains.
They are currently working on merging the v1 and v2 chains.
At this point, it feels like the corporate perpetual “13 months out“. i.e. never coming, always on the horizon.
this is a major update to a system that handles trillions in transactions, i'm happy they're taking their time on it.
tbh though very seriously likely this year, all the major infrastructure is in place
tbh though very seriously likely this year, all the major infrastructure is in place
And, as ever, the exact same thing was said early last year, too. And the year before, if my memory serves me. I’ll have more faith that it’s actually coming once Star Citizen comes out.
Until it’s actually released, skepticism’s the safest bet.
Until it’s actually released, skepticism’s the safest bet.
That's not true. This time last year, the Beacon chain had only been running for a little more than a month. Also the code was not complete to merge Pow/PoS chains. The merge has already happened on Testnet, so literally the full merge could be done on Mainnet tomorrow if the Ethereum core team wanted to.
Speaking of betting,
What do prediction markets say about whether it will be out by what times?
What do prediction markets say about whether it will be out by what times?
There are forks of Ethereum already running PoS consensus (e.g. Binance Smart Chain, Songbird and an upcoming fork called PulseChain to name a few). I hear the difficult part is getting the sharding to work.
BSC isn't strictly a fork of Ethereum, though it is EVM compatible and uses the geth protocol. It also uses the Tendermint consensus protocol from Cosmos, which is different from the PoS implementation being worked on by Ethereum.
Sharding is definitely proving to be challenging for Ethereum, but my understanding is that it's being worked on independently of the move to PoS now.
Sharding is definitely proving to be challenging for Ethereum, but my understanding is that it's being worked on independently of the move to PoS now.
The difficult part is figuring out why anyone would ever want to use any of this stuff for anything other than money laundering.
First POS was in 2012. Ethereum mentioned it in 2015.
So it's been 7 years since announcement.
So it's been 7 years since announcement.
Ever since I quit my job in finance - that was 4 years ago now.
As someone deeply interested and invested in crypto I strongly disagree. Proof of work has it's place in the ecosystem and isn't going anywhere. Plenty of modern chains are utilizing proof of work for various reasons.
We're seeing evidence for a preference for PoS already [1]. Proof of Work only makes sense if you'll have majority hash rate. Would you trust PoW in the case of Ethereum Classic?
1: https://coinmarketcap.com/view/pos/
Edit: Also I should highlight I'm not arguing to shift away from PoW where it makes sense.
1: https://coinmarketcap.com/view/pos/
Edit: Also I should highlight I'm not arguing to shift away from PoW where it makes sense.
> We're seeing evidence for a preference for PoS already
This isn't evidence of proof of work going away. I'm not sure why you think it is. More coins will be made with PoW and the ones that have PoW today likely will stay PoW. There's no reason to believe PoW is going to shrink, just because PoS is growing.
> Would you trust PoW in the case of Ethereum Classic
No, but I trust PoW with coins that have ASIC/FGPA resistant hashing algorithms. PoS isn't without trust issues either. What do you do if/when defi starts offering greater returns than staking? Obviously there will be a large exodus in staking making it more vulnerable to majority attacks as well.
This isn't evidence of proof of work going away. I'm not sure why you think it is. More coins will be made with PoW and the ones that have PoW today likely will stay PoW. There's no reason to believe PoW is going to shrink, just because PoS is growing.
> Would you trust PoW in the case of Ethereum Classic
No, but I trust PoW with coins that have ASIC/FGPA resistant hashing algorithms. PoS isn't without trust issues either. What do you do if/when defi starts offering greater returns than staking? Obviously there will be a large exodus in staking making it more vulnerable to majority attacks as well.
Even if no existing coins switch to PoS (spoiler: many will), the PoS coins will suck up fee-paying users from the PoW coins, reducing the returns on mining, which will result in lower network hashpower. It may also bring a second-order effect of reducing the prices of PoW coins, which will reduce dollar-denominated block rewards on those networks, and that will bring hashpower down even farther.
ETH continues to grow its hashrate every day. Even in the face of growing competition, hashrate grows. It's an interesting theory, but there's no evidence of you being right. We already have many extremely high market-cap PoS coins, many with more features than ETH will have even after it's PoS transition, yet PoW hash continues to skyrocket.
Because ETH is still the king, and those coins haven't proven themselves yet. Next year ETH will be PoS and there will be no other major PoW coins outside of Bitcoin in the top 10. At which point, other PoS coins will lose their competitive advantage. So from a user and developer perspective, there's no reason to jump ship.
Proof of Stake implementation has been as never-ending as COVID restrictions.
Besides, it's not clear whether PoS won't create governance problems. PoW is a pretty smart solution of proving you spent some money and pays the miners so that people who have computing power won't attack the system.
PoS is trusting rich people, hoping they won't bring down everything for who knows what profit - a government printing money to delay a market crisis, is not that far.
Besides, it's not clear whether PoS won't create governance problems. PoW is a pretty smart solution of proving you spent some money and pays the miners so that people who have computing power won't attack the system.
PoS is trusting rich people, hoping they won't bring down everything for who knows what profit - a government printing money to delay a market crisis, is not that far.
Crypto currency is an instantiation of Bostrom's paperclip maximizer running on a hybrid human/machine topology.
Yes, very likely, although there's no AI involved and are the humans who are digging their own grave. I can easily picture a future in which 50% of the space available on the planet is allocated for energy production plants, the other 50% for mining farms, and there will be essentially only jobs related to these two activities available, just like using every resource to make paperclips.
We started something that could make a nice Twilight Zone plot, and that's what worries me the most.
>therefore there's absolutely no way prices of hardware and energy will return to normal until governments won't stop this nonsense.
For all its faults, the market is great at solving these problems. Though I suppose it depends on what you mean by "normal".
For all its faults, the market is great at solving these problems. Though I suppose it depends on what you mean by "normal".
The problem is that miners are buying GPUs. Without denying the problem, how can the market fix this?
GPUs are manufacturable. The market is meant to signal to manufacturers that this is profitable to make more of, and thus, more would become available in the future. Unfortunately, the current world events conspired to not allow this balance to happen - chip shortages and logistics problems etc.
Give it a few more years, and it will balance back out.
Give it a few more years, and it will balance back out.
Crypto is carefully designed to model Parkinson's Law. (Proof of) Work always grows to fill the compute available.
Network difficulty adjusts to pull the demand curve to the right.
That makes the GPU market supply-constrained. Any increase in supply will be met with a lower price equilibrium which will result in more GPUs bought and used for mining. Which results in a higher THR which will be met with additional increases in network difficulty which will pull the demand curve to the right ad infinitum.
I'm not sure how much more economics 101 I can make this. As long as GPUs are part of the system, the GPU market will be supply-constrained. The supply and demand curves will continue to drift to the right.
That makes the GPU market supply-constrained. Any increase in supply will be met with a lower price equilibrium which will result in more GPUs bought and used for mining. Which results in a higher THR which will be met with additional increases in network difficulty which will pull the demand curve to the right ad infinitum.
I'm not sure how much more economics 101 I can make this. As long as GPUs are part of the system, the GPU market will be supply-constrained. The supply and demand curves will continue to drift to the right.
There is not enough competition, people got conditioned to high prices for 10 years - once prices are raised they are not coming back.
Good luck starting your GPU company
Good luck starting your GPU company
> Good luck starting your GPU company
There is a chance you may mean that sarcastically, so...
Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory. Mass produce 5-10 year old tech in bulk, soak up enough of the market to survive and move as quickly as possible into modern manufacturing techniques.
We've seen in the last number of years that investors/lenders are perfectly happy to take multi-billion dollar losses of multiple years while chasing a market. It'd work fine.
There is a chance you may mean that sarcastically, so...
Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory. Mass produce 5-10 year old tech in bulk, soak up enough of the market to survive and move as quickly as possible into modern manufacturing techniques.
We've seen in the last number of years that investors/lenders are perfectly happy to take multi-billion dollar losses of multiple years while chasing a market. It'd work fine.
> Mass produce 5-10 year old tech in bulk
I really wonder if the tech/equipment to do this is actually also unavailable - preventing any competition from starting up. I think it's the same logistical bottleneck that is hitting everything, not some monopoly conspiracy, and if that's the case, by the time bottlenecks clear up, the demand for such items would also drop (as the higher end stuff becomes available again).
I really wonder if the tech/equipment to do this is actually also unavailable - preventing any competition from starting up. I think it's the same logistical bottleneck that is hitting everything, not some monopoly conspiracy, and if that's the case, by the time bottlenecks clear up, the demand for such items would also drop (as the higher end stuff becomes available again).
> Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory.
So then as PoW difficulty increases, demand for GPS increases. Necessitating more factories until the primary output of world industry is GPU factories.
Does nobody see how absurd this is?
The market is stuck in a feedback loop. People are naievely looking at this and saying "Aha, just follow the rules of capitalism and the market and it will work out well. That's the religion." Not seeing this is a spiral. There is no market solution here.
It's like we're looking at a while loop, with condition "true == true", the body of the loop doubles the length of a string each time. Somewhere here is saying, this will not end well, we're gonna use up all of our heap trying to double the string size. And somebody else's solution is, "close some running programs so that ram can be allocated to the string doubling program".
Ok yah, we can run a bit longer, but the end result is still 70%+ of RAM being used to allocated these strings and eventually program crash.
Building more GPU factories isn't a solution is crypto's exponential consumption of resources.
So then as PoW difficulty increases, demand for GPS increases. Necessitating more factories until the primary output of world industry is GPU factories.
Does nobody see how absurd this is?
The market is stuck in a feedback loop. People are naievely looking at this and saying "Aha, just follow the rules of capitalism and the market and it will work out well. That's the religion." Not seeing this is a spiral. There is no market solution here.
It's like we're looking at a while loop, with condition "true == true", the body of the loop doubles the length of a string each time. Somewhere here is saying, this will not end well, we're gonna use up all of our heap trying to double the string size. And somebody else's solution is, "close some running programs so that ram can be allocated to the string doubling program".
Ok yah, we can run a bit longer, but the end result is still 70%+ of RAM being used to allocated these strings and eventually program crash.
Building more GPU factories isn't a solution is crypto's exponential consumption of resources.
> So then as PoW difficulty increases, demand for GPS increases. Necessitating more factories until the primary output of world industry is GPU factories.
it's not absurd. If you replace GPU with food, and PoW with population, then you will see that it is not absurd. It is only absurd because of the a priori assumption that having more PoW is worthless - an assumption you wouldn't make with population.
And i would think that if in the future, demand for PoW crypto grew, it means it must be satisfying a demand (for example, currency collapse). As long as a demand is being satisfied, and paid for by individual's earned money, it should be fine (as opposed to being paid for by somebody else's money - aka, externalization of cost).
it's not absurd. If you replace GPU with food, and PoW with population, then you will see that it is not absurd. It is only absurd because of the a priori assumption that having more PoW is worthless - an assumption you wouldn't make with population.
And i would think that if in the future, demand for PoW crypto grew, it means it must be satisfying a demand (for example, currency collapse). As long as a demand is being satisfied, and paid for by individual's earned money, it should be fine (as opposed to being paid for by somebody else's money - aka, externalization of cost).
> it's not absurd. If you replace GPU with food, and PoW with population, then you will see that it is not absurd. It is only absurd because of the a priori assumption that having more PoW is worthless - an assumption you wouldn't make with population.
> And i would think that if in the future, demand for PoW crypto grew, it means it must be satisfying a demand (for example, currency collapse). As long as a demand is being satisfied, and paid for by individual's earned money, it should be fine (as opposed to being paid for by somebody else's money - aka, externalization of cost).
I'm not even certain how to respond to this. I called out that it's becoming evident that the growing problem with crypto is a collection of people who fundamentally don't understand markets and society. That the understanding is as simplistic as "if someone is willing to pay money for it, then it must be good for society". Which is beyond naieve. And how people need a deeper understanding of what's happening.
And the response "countering" my argument is essentially saying I'm wrong because paraphrasing: "If someone is willing to pay for it, it is good for society". And equating GPU production with food production because in this hypothetical they are both things people pay for.
I'm not certain we can have a productive discussion. The goal of society isn't to create markets. Markets are a tool society uses to improve life for people. Markets aren't the goal.
Making legal murder for hire is not a net positive for society, even though you could create a market place for it and people would pay for it. Arguing something is good because people will pay for it is so beyond flawed that I don't have a way to describe it.
> And i would think that if in the future, demand for PoW crypto grew, it means it must be satisfying a demand (for example, currency collapse). As long as a demand is being satisfied, and paid for by individual's earned money, it should be fine (as opposed to being paid for by somebody else's money - aka, externalization of cost).
I'm not even certain how to respond to this. I called out that it's becoming evident that the growing problem with crypto is a collection of people who fundamentally don't understand markets and society. That the understanding is as simplistic as "if someone is willing to pay money for it, then it must be good for society". Which is beyond naieve. And how people need a deeper understanding of what's happening.
And the response "countering" my argument is essentially saying I'm wrong because paraphrasing: "If someone is willing to pay for it, it is good for society". And equating GPU production with food production because in this hypothetical they are both things people pay for.
I'm not certain we can have a productive discussion. The goal of society isn't to create markets. Markets are a tool society uses to improve life for people. Markets aren't the goal.
Making legal murder for hire is not a net positive for society, even though you could create a market place for it and people would pay for it. Arguing something is good because people will pay for it is so beyond flawed that I don't have a way to describe it.
Historically, for many products, high demand leads to lower unit prices as manufacturers become more efficient. Since we're a decade into GPU mining, there's been a lot of time for manufacturers to adjust. While so far they have not been able to keep up with demand, I don't think it's clear that they never will.
Sorry, not following. Can you explain how efficiencies in GPU production interact with network difficulty to produce lower GPU prices? I'm not finding much in the literature.
What makes hash-based proof of work function is that to produce some number of hashes you need to use some amount of real-world resources. In practice, the two main resource inputs are electricity and computational hardware. If hardware is scarce, as it is now, the hardware will be a large proportion of mining cost, while the more efficiently hardware can be produced, the more of the cost is electricity.
How does that make miners not buy GPUs?
LHR was one attempt at it with varying success.
And it won’t take a few years to balance out. If ETH really does go PoS in the next six months then you’ll see a lot of RTX 3080 and 3090 come on the market for very cheap.
A lot of ETH miners say they’ll go to RVN or others but there is no way other coins can take the hash rate currently devoted to ETH.
And it won’t take a few years to balance out. If ETH really does go PoS in the next six months then you’ll see a lot of RTX 3080 and 3090 come on the market for very cheap.
A lot of ETH miners say they’ll go to RVN or others but there is no way other coins can take the hash rate currently devoted to ETH.
> The problem is that miners are buying GPUs.
That's not a real problem, I can stop buying GPUs and keep playing most 3-5 years old games with a decent integrated one in a relatively modern CPU at a fraction of the price, and that's it. I'm not a gamer however, so I would understand hardcore gamers to be pissed off, but that's not a real problem as nothing vital is taken away from anyone.
The real problem is the steadily raising demand in energy which doesn't seem to stop anywhere in the future. If we accept the fact that more energy translates into more money, and that more money allows miners to add more and more GPUs (or ASIC dedicated hardware, energy-wise, a cluster of GPUs and a box that draws 3000 watts are exactly the same thing) then we're going straight to a future in which every resource will be used to produce energy.
How to stop something that screams "put more energy in = get more money out"?
No way, it's probably too late, and I expect a huge misinformation campaign from the parties involved, which already amassed a lot of money to pay for it. Therefore we'll see a stronger push for nuclear and other non clean sources, but also soaring prices of every other source, including clean ones, because the demand dictates the price, and there is where most demand is coming from.
And there's also the warming problem, because you know, consuming so much energy doesn't come without a price to pay.
That's not a real problem, I can stop buying GPUs and keep playing most 3-5 years old games with a decent integrated one in a relatively modern CPU at a fraction of the price, and that's it. I'm not a gamer however, so I would understand hardcore gamers to be pissed off, but that's not a real problem as nothing vital is taken away from anyone.
The real problem is the steadily raising demand in energy which doesn't seem to stop anywhere in the future. If we accept the fact that more energy translates into more money, and that more money allows miners to add more and more GPUs (or ASIC dedicated hardware, energy-wise, a cluster of GPUs and a box that draws 3000 watts are exactly the same thing) then we're going straight to a future in which every resource will be used to produce energy.
How to stop something that screams "put more energy in = get more money out"?
No way, it's probably too late, and I expect a huge misinformation campaign from the parties involved, which already amassed a lot of money to pay for it. Therefore we'll see a stronger push for nuclear and other non clean sources, but also soaring prices of every other source, including clean ones, because the demand dictates the price, and there is where most demand is coming from.
And there's also the warming problem, because you know, consuming so much energy doesn't come without a price to pay.
I work in deep learning and had to camp out in front of a best buy to get my hands on some 3090s. A good portion of the people in line with me were crypto miners who were waiting to get more GPUs to add to their collection because they're making money on each one and as long as it's profitable it makes perfect sense for them to buy up more.
If nvidia straight up just stopped selling any cards, declined all their client/customer base, and just put 100% of their global output to mining cryptocurrencies, I think it's a good chance nvidia can do a 50%+1 attack on both bitcoin and ethereum at the same time.
Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out, and it'd probably register as a good profit on their income statements.
Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out, and it'd probably register as a good profit on their income statements.
The part where you say "cash out" is hilarious. There is no cash in it. You only get to keep the bits. Any cash comes from buyers and if there is any attack all the buyers are scared away.
> Any cash comes from buyers and if there is any attack all the buyers are scared away.
Well, assuming any kind of rationality in the crypto market is always hazardous: meme coins (doge coin, shiba inu) are worth billions in market cap, so do hard forks of bitcoin, and Ethereum didn't not collapse after they decided to rollback a bunch of things they didn't like during the DAO “hack” while they are advertising Ethereum as immutable and tampering resistant.
You can never be sure how this market will react in any event (well, except Elon tweets I guess)
Well, assuming any kind of rationality in the crypto market is always hazardous: meme coins (doge coin, shiba inu) are worth billions in market cap, so do hard forks of bitcoin, and Ethereum didn't not collapse after they decided to rollback a bunch of things they didn't like during the DAO “hack” while they are advertising Ethereum as immutable and tampering resistant.
You can never be sure how this market will react in any event (well, except Elon tweets I guess)
> Any cash comes from buyers and if there is any attack all the buyers are scared away.
I used to assume that, but there are coins which have been attacked successfully before and people still use them anyway. I don't attempt to explain the logic there :P
I used to assume that, but there are coins which have been attacked successfully before and people still use them anyway. I don't attempt to explain the logic there :P
So NVIDEA is doing the smart thing, and just keep raking in cold hard cash from the miners, whom take on all the risk for when the market collapses.
This is the terrifying thing about a bug in one of these systems or some other kind of attack. The whole network can suddenly drop to zero in the blink of an eye.
Hence the value of a stabler currency such as USD or GBP versus more volatile currencies. It is an implicit judgment on how much trust there is in the system that uses them.
As with any software, bugs can be fixed or forked out. The risk of it going to zero is smaller than most people think. Remember the inflation bugs Bitcoin had in it's early days? [1]
1: https://medium.datadriveninvestor.com/itcoin-unhackable-it-h...
1: https://medium.datadriveninvestor.com/itcoin-unhackable-it-h...
Sure, but basically every currency has some theoretical problem.
Usually it's just about the currency becoming worthless (usually only a problem in government controlled currencies that have loans in foreign currencies), or people just not accepting it anymore.
There's no inherent value in any currency, it's just a useful fiction because it's really hard to go get five goats to trade somebody for a laptop.
Usually it's just about the currency becoming worthless (usually only a problem in government controlled currencies that have loans in foreign currencies), or people just not accepting it anymore.
There's no inherent value in any currency, it's just a useful fiction because it's really hard to go get five goats to trade somebody for a laptop.
Currencies are propped up by taxes. The IRS wants a significant percentage of the US GDP paid in USD, as long as the economy exists and the government doesn’t print truly vast amounts of money from thin air the USD can only move within a fairly narrow range.
That would be true if only the US was using the dollar.
Given the number of countries using the dollar as their reserve currency, value could collapse quite a ways without the US doing anything.
It's not likely, but neither is a 50 + 1 attack on bitcoin given the amount of computing power currently tied up there.
Given the number of countries using the dollar as their reserve currency, value could collapse quite a ways without the US doing anything.
It's not likely, but neither is a 50 + 1 attack on bitcoin given the amount of computing power currently tied up there.
That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast.
Also, Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. What exactly happens after that point is anyones guess, but it could easily be worse than a traditional 51% attack.
Also, Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. What exactly happens after that point is anyones guess, but it could easily be worse than a traditional 51% attack.
> That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast.
Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged.
> Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked.
That's fair, if we're including implementation vulnerabilities, it does expand the potential problems quite a bit. The post I was responding to was specifically about a 50 + 1 attack. Though if we include these, we should probably also expand physical currencies' problems to include counterfeiting in that case.
Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged.
> Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked.
That's fair, if we're including implementation vulnerabilities, it does expand the potential problems quite a bit. The post I was responding to was specifically about a 50 + 1 attack. Though if we include these, we should probably also expand physical currencies' problems to include counterfeiting in that case.
> Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged.
The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up.
You might wonder about economic hardship, but historically that causes deflation. +/- 2% per year without printing money is easy, but there is a reason you don’t see huge swings without the government printing money.
> counterfeiting
An issue for any physical currency but electronic currency actually operates independently. Trying to counterfeit large quantities of cash is therefore surprisingly difficult even for nation stale level actors. A great fake bill can get passed around, 10 billion in fake bills which is still a trivial amount would trip up various monitoring systems.
The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up.
You might wonder about economic hardship, but historically that causes deflation. +/- 2% per year without printing money is easy, but there is a reason you don’t see huge swings without the government printing money.
> counterfeiting
An issue for any physical currency but electronic currency actually operates independently. Trying to counterfeit large quantities of cash is therefore surprisingly difficult even for nation stale level actors. A great fake bill can get passed around, 10 billion in fake bills which is still a trivial amount would trip up various monitoring systems.
>The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up.
? GDP is produced and denominated in USD, domestic taxes are paid in USD. How does a drop in the relative value of USD compared to a foreign currency influence domestically paid taxes in any way?
? GDP is produced and denominated in USD, domestic taxes are paid in USD. How does a drop in the relative value of USD compared to a foreign currency influence domestically paid taxes in any way?
> If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up.
Oh definitely. I did not mean to imply that taxation in USD does not have a modulating effect (and if I came across that way, I apologize). I'm just trying to say that you can have some pretty wide swings even with that.
> but there is a reason you don’t see huge swings without the government printing money.
You don't generally see it, no. Mostly because other countries use the dollar as a store of wealth, and they don't want to tank the value that they've squirreled away. I'm bringing it up as a hypothetical with the same likelihood as a 50 + 1 attack on bitcoin.
China, for example, seems to hold ~2 trillion in USD (~60% of 3.5% trillion total reserves).[0] I assume most of this is held as digital assets, as there's only ~2 trillion physical dollars in circulation.[1] Dumping that much on the market would cause some pretty wacky inflation (as well as destroy China's stability). In a similar vein a 50 + 1 attack on bitcoin would allow an actor to give themselves all of the bitcoins, but would also destroy the value of those bitcoins because nobody is going to trust the network after that.
Both of these attacks are really only useful if you value hurting other actors more than you value your own resources/your own sense of self-preservation.
[0]: https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_C... [1]: https://www.uscurrency.gov/life-cycle/data/circulation
Oh definitely. I did not mean to imply that taxation in USD does not have a modulating effect (and if I came across that way, I apologize). I'm just trying to say that you can have some pretty wide swings even with that.
> but there is a reason you don’t see huge swings without the government printing money.
You don't generally see it, no. Mostly because other countries use the dollar as a store of wealth, and they don't want to tank the value that they've squirreled away. I'm bringing it up as a hypothetical with the same likelihood as a 50 + 1 attack on bitcoin.
China, for example, seems to hold ~2 trillion in USD (~60% of 3.5% trillion total reserves).[0] I assume most of this is held as digital assets, as there's only ~2 trillion physical dollars in circulation.[1] Dumping that much on the market would cause some pretty wacky inflation (as well as destroy China's stability). In a similar vein a 50 + 1 attack on bitcoin would allow an actor to give themselves all of the bitcoins, but would also destroy the value of those bitcoins because nobody is going to trust the network after that.
Both of these attacks are really only useful if you value hurting other actors more than you value your own resources/your own sense of self-preservation.
[0]: https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_C... [1]: https://www.uscurrency.gov/life-cycle/data/circulation
OMG it should be illegal.
There are BTC futures, they could use those to bet against BTC
Yeah, they could do that, but what most of these claims ("X could easily profit Y by doing 50%+1 attack") miss, is that once that attack has been made, who'd trade anything with the currency that was attacked? Lets say nvidia does "conquer" Bitcoin and have all the bitcoins, who'd in the right mind would continue to buy/sell Bitcoins after that? The market for Bitcoin would collapse faster than nvidia could excitedly scream "PROFITS!" to their shareholders, making the whole attack unnecessary in the first place.
Well, the history of actual 50% attacks on cryptocurrencies in the past few years seems to suggest that effect of a 50% attack on the value of the cryptocurrency is... pretty close to nil, actually. Admittedly, a successful attack on a major cryptocurrency like Bitcoin or Etherium is likely to have far different impact on cryptocurrency society than one on a minor cryptocurrency, but the ability of the community to twist every bad news into "this is good for Bitcoin" should not be underestimated.
A 51% attack can only reverse a transaction anyway, it can’t arbitrarily take money from someone you haven’t transacted with. But they could get short exposure to btc/eth in the market, profit when it went down from the ensuing panic, and then sell the graphics cards to retail (there are other complications that make this unrealistic, of course.)
I suppose any of the Faang companies could sacrifice a data center for a day or two to do the same. Just crash the currency and get out, to eliminate proof of work currencies.
Again, why would they? They only stand to lose on it, so why do it in the first place?
NVIDIA would reduce demand, but for the FAANG companies it's a neutral proposition, aside from the cost of doing the work to crash the currency.
And there's plenty of reasons to want to do so: Proof-of-work currencies are what make ransomware payments possible, and there's a large daily CO2 cost for proof of work currencies. The question is simply when is the cost of the externalities greater than the cost of acting?
And there's plenty of reasons to want to do so: Proof-of-work currencies are what make ransomware payments possible, and there's a large daily CO2 cost for proof of work currencies. The question is simply when is the cost of the externalities greater than the cost of acting?
> One of the first ransomware attacks ever documented was the AIDS trojan (PC Cyborg Virus) that was released via floppy disk in 1989. Victims needed to send $189 to a P.O. box in Panama to restore access to their systems[0]...
[0]: https://www.crowdstrike.com/cybersecurity-101/ransomware/his...
[0]: https://www.crowdstrike.com/cybersecurity-101/ransomware/his...
Am I missing something? Why would NVIDIA want to reduce demand for their graphic cards?
There is actually a good case to make here. Nvidia currently is in the tough spot of a) not having the capacity to saturate the market and b) not being able to expand the production to match.
B is because they don’t have enough confidence that the crypto people will be there as costumers in 5 years. And A is a problem, because their traditional user base (ie gamers) won’t match the spending, but will still get their fix (just not from Nvidia). And that breaks the strangle hold that they had a couple of years ago on that market.
So short term: having the high prices paid by crypto people is nice. But it destroys their relationship to their old customer base. Depending on where the crypto market will be in 5, 10, 15 years, this can be the 5x of their market cap or the 0.2x
So short term: having the high prices paid by crypto people is nice. But it destroys their relationship to their old customer base. Depending on where the crypto market will be in 5, 10, 15 years, this can be the 5x of their market cap or the 0.2x
Relying on single customer can have quite severe negative consequences (walmart crushing whole businesses is a good example). GPU shortage is destroying PC position as a viable gaming platform. Give it couple more years of GPU shortages and Nvidia will irrevocably lose whole market segment, leaving it with compute and shaky scam riddled crypto.
Yes, nvidia and AMD should collude to destroy crypto from a market risk reduction perspective.
They have done things like come up with a mining only SKU, apparently partially because they are annoyed that people aren't using their cards for their intended purpose. Probably, while a sale is a sale, they see the crypto market as flakier and would rather keep their gaming reputation intact.
Can such an attack be done without detection?
No, the whole point of using a blockchain is to have a publicly verifiable ledger of all transactions. If anything goes wrong, there will be so many alarm bells ringing across the world that probably it'll be a hearable event for most people living in places that resembles modern civilization.
You can sell your cryptocurrency for real dollars before openly performing your 51% attack.
The idea that you could buy a real-world item worth half as much as the amount of ETH/BTC you would mine in an hour or two or 51% is simply unrealistic.
ETH mining at 500TH (a solid chunk over 51% just for ease) would net you 300 ETH an hour...that's 1.1 million USD, which means you would have to be able to purchase millions of dollars worth of real world items that would be released to you within the time-frame of your attack (in this case an hour) to make this even approaching "worth it" from a risk/reward viewpoint and even that calculation is ignoring just how profitable they'd be just mining normally for the foreseeable future.
No one is waiting for just an hour worth of confirmations for millions of dollars of real world goods exchanged for ETH.
ETH mining at 500TH (a solid chunk over 51% just for ease) would net you 300 ETH an hour...that's 1.1 million USD, which means you would have to be able to purchase millions of dollars worth of real world items that would be released to you within the time-frame of your attack (in this case an hour) to make this even approaching "worth it" from a risk/reward viewpoint and even that calculation is ignoring just how profitable they'd be just mining normally for the foreseeable future.
No one is waiting for just an hour worth of confirmations for millions of dollars of real world goods exchanged for ETH.
> If nvidia straight up just stopped selling any cards, declined all their client/customer base, and just put 100% of their global output to mining cryptocurrencies, I think it's a good chance nvidia can do a 50%+1 attack on both bitcoin and ethereum at the same time.
No, not for Bitcoin. GPUs are no good at mining Bitcoin; you need an ASIC for that.
> Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves […]
No. Having a majority of mining power does not enable anyone to assign currency to themselves, except for the mining reward. That would require faking digital signatures.
No, not for Bitcoin. GPUs are no good at mining Bitcoin; you need an ASIC for that.
> Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves […]
No. Having a majority of mining power does not enable anyone to assign currency to themselves, except for the mining reward. That would require faking digital signatures.
You haven't been able to GPU mine bitcoin in like a decade, every miner uses dedicated ASICs specifically for mining btc. It's been impossible to compete without ASICs for a very long time.
Nvidia can design and manufacture asics too you know. Likely they have enough expertise to revolutionize the asic market as you know it, using the 3nm process at tsmc.
Since Bitmain asics are currently being made at around 16nm nodes, using 3nm process that Nvidia has access to - think about that for a bit.
Since Bitmain asics are currently being made at around 16nm nodes, using 3nm process that Nvidia has access to - think about that for a bit.
Please bear in mind that 3nm is an "alpha" - a multiplier characterizing the process. If you took your time and find out difference between processes with different "alphas" you will find that transistor density is nowhere near what difference in "alphas" would suggest.
If I remember correctly, the difference in transistor density improves as 1/alpha whereas area of transistors, if everything gets shrunk with alpha decrease, should decrease as square of 1/alpha. I.e., if alpha differs two times, there should be 4 times more shrunk transistors whereas practice shows only 2 (and often less) more shrunk transistors.
This is because you cannot make transistors too small in every dimension, they will leak.
So the difference between 3nm and 16nm will be less than five times. Not 25 times as difference between these parameters would suggest.
The difference in getting masks and first prototype should be quite substantial in terms of upfront payments and time-to-production.
I remember that 25 square millimeters proof of concept in 180nm process needed $50K of money and half an year of delay. The 35nm (5 times less) prototype of the same area would cost about $500K and more than half an year delay. The difference between 16nm and 3nm is about the same, I can expect several millions of dollars of upfront cost of small chip and year long delay before prototype arrives for 3nm process.
These Bitmain guys should be assumed to be not stupid and they most probably have access to latest processes after second prototype. Yet they choose 16nm - we must ask ourselves "why?" and Nvidia should too.
As a matter of fact, Nvidia had its share of problems with tiny processes in past.
If I remember correctly, the difference in transistor density improves as 1/alpha whereas area of transistors, if everything gets shrunk with alpha decrease, should decrease as square of 1/alpha. I.e., if alpha differs two times, there should be 4 times more shrunk transistors whereas practice shows only 2 (and often less) more shrunk transistors.
This is because you cannot make transistors too small in every dimension, they will leak.
So the difference between 3nm and 16nm will be less than five times. Not 25 times as difference between these parameters would suggest.
The difference in getting masks and first prototype should be quite substantial in terms of upfront payments and time-to-production.
I remember that 25 square millimeters proof of concept in 180nm process needed $50K of money and half an year of delay. The 35nm (5 times less) prototype of the same area would cost about $500K and more than half an year delay. The difference between 16nm and 3nm is about the same, I can expect several millions of dollars of upfront cost of small chip and year long delay before prototype arrives for 3nm process.
These Bitmain guys should be assumed to be not stupid and they most probably have access to latest processes after second prototype. Yet they choose 16nm - we must ask ourselves "why?" and Nvidia should too.
As a matter of fact, Nvidia had its share of problems with tiny processes in past.
Even after a decade, users here still don't know the basics of how blockchains work. Lol
"A GPU attack on BTC" Jésus help us
"A GPU attack on BTC" Jésus help us
There is no reason enough GPUs can't do it. Yes it is more expensive then getting the same hash rate via ASICs but the profitability off a 51% attack is a lot higher and NVIDIA would get their own chips at a reduced rate.
Yeah bro enough balloons can lift a house.
Nah nah. What you (and all the other comments miss), is if you were going to do that, you'd just reduce the sale of cards tremendously, while hoarding your own production output to take over. You wouldn't cut out all sales and hoard all of them.
See, if they just stopped selling them, people would ask questions. If, however, you just reduced the supply by like 80%, said it "was due to all those crypto miners hoarding them", and then proceeded to use that hoarded 80% to do a 50%+1 attack, you'd be able to -quietly- take over, and turn around and sell those coins to the still preserved market.
applies tinfoil hat In fact, who is to say that isn't exactly what they're doing, and hence the existing shortage?
See, if they just stopped selling them, people would ask questions. If, however, you just reduced the supply by like 80%, said it "was due to all those crypto miners hoarding them", and then proceeded to use that hoarded 80% to do a 50%+1 attack, you'd be able to -quietly- take over, and turn around and sell those coins to the still preserved market.
applies tinfoil hat In fact, who is to say that isn't exactly what they're doing, and hence the existing shortage?
Who would they cash out too, they would have destroyed the market that cost them so much to acquire.
Short the currency?
Who’s the counterpart to your short?
I guess you'd have to wait for the market to mature a bit more or short companies that hold large quantities of btc
ETH yes but not BTC. GPUs can't touch ASICs
Enough GPUs can.
For bitcoin at least, a top of the line ASIC miner can do ~1,000,000x more hashes per second at ~1/100th the power per hash compared to a top of the line GPU. The current total hash rate for the Bitcoin network is ~200EH/s. So a 51% attack would require ~2 trillion GPUs consuming/costing 100x as much power as the Bitction network does today.
I stand corrected Nvidia doesn't have that many GPUs.
>Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out, and it'd probably register as a good profit on their income statements.
So they're going to manage to not sell any cards (without disclosing that as a public company), set up the infrastructure and do a 51% attack on bitcoin in front of everyone, then "cash out" as if there would be people lined up waiting to buy bitcoin when this has just happened in front of their eyes?
Unlikely.
So they're going to manage to not sell any cards (without disclosing that as a public company), set up the infrastructure and do a 51% attack on bitcoin in front of everyone, then "cash out" as if there would be people lined up waiting to buy bitcoin when this has just happened in front of their eyes?
Unlikely.
I hadn't considered this before, but that's a really compelling reason that a 51% attack would not be worth anyone's while. Seems like a successful 51% attack would just wreck bitcoin, and there wouldn't be any way to cash out.
you only 51% this stuff if the goal isn't to make money, but something else.
I assume hedge funds are keeping an eye on interesting attacks like this. Short BTC futures, collapse the currency, cover.
Nvidia wouldn't do this because it might hurt GPU sales.
Nvidia wouldn't do this because it might hurt GPU sales.
Would this be legal? Obviously bitcoin has no "terms of use" that Nvidia (or anyone) is bound to, but the US has very broad "hacking" laws like CFAA.
I imagine that if Nvidia were to openly "steal" someone's bitcoin using a 51% attack then the victim could sue Nvidia in a US court and things could get interesting.
What laws would apply and what would the outcome of such a case be? And could the act also be considered criminal?
I imagine that if Nvidia were to openly "steal" someone's bitcoin using a 51% attack then the victim could sue Nvidia in a US court and things could get interesting.
What laws would apply and what would the outcome of such a case be? And could the act also be considered criminal?
Stealing is stealing. 51% attack is just a method to rollback a transaction. No different than ordering stuff and doing a willfully fraudulent chargeback.
How would you prove it?
What if you are a drug dealer or dictator?
What if you are a drug dealer or dictator?
Doing a 51% attack doesn't mean the rest of the network users will accept your new blockchain fork.
I would imagine that compromising the network like that would tank the value of those currencies.
[deleted]
That's an interesting concept
Why doesn't Nvidia use the cards themselves to mine? Not for the attack but for the profit?
Each card is obviously cheaper to produce than they are selling it for. Why not maximize all the profit?
Why doesn't Nvidia use the cards themselves to mine? Not for the attack but for the profit?
Each card is obviously cheaper to produce than they are selling it for. Why not maximize all the profit?
Just guessing, but there's probably more risk to running a mining operation than miners realize, and Nvidia doesn't want that risk. There are also PR issues with energy use. There's enough money in selling pickaxes.
This is exactly it. NVIDIA are also not building more factories to meet the demand because they are (correctly) assessing that a bigger risk for them is demand collapse and a glut of used hardware.
> they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out
Assuming this was even possible, your plan has a fatal flaw.
Who the heck is going to buy the BTC back?
Assuming this was even possible, your plan has a fatal flaw.
Who the heck is going to buy the BTC back?
as a thought experiment, lets say I had a time machine.
I go back in time with a super computer and mine all the coins the first year and lock them up in my wallet. I then return to the present day.
Are they worth anything?
I go back in time with a super computer and mine all the coins the first year and lock them up in my wallet. I then return to the present day.
Are they worth anything?
What are they mining, Monero? Is GPU mining still a thing for Bitcoin or Ethereum?
ETH. I bought a new computer in March of 2021 for $1,900 including tax. The computer happened to have an RTX 3070 card in it.
I have mined and sold $2,800 of ETH in the 9 months I’ve owned it. The extra power has cost me a couple hundred dollars.
I’ve made anywhere from $3 to $75 per day during that time (thank you Shiba Inu launch date for the highest numbers).
I’m continuing to make about $3 per day. You can look up current profitability for any graphics card at whattomine.com.
Bottom line is I could have added infinite graphics cards to this setup and the profit would’ve gone up linearly.
Anyone that doesn’t think GPUs are high due to ETH mining has no idea what they’re talking about. The analysis from OP seemed ridiculous to me. I didn’t even see LHR mentioned in the article which are GPU manufacturers attempting to make GPUs unprofitable for miners so they can only be used for gaming. (Hint: didn’t work very well).
I have mined and sold $2,800 of ETH in the 9 months I’ve owned it. The extra power has cost me a couple hundred dollars.
I’ve made anywhere from $3 to $75 per day during that time (thank you Shiba Inu launch date for the highest numbers).
I’m continuing to make about $3 per day. You can look up current profitability for any graphics card at whattomine.com.
Bottom line is I could have added infinite graphics cards to this setup and the profit would’ve gone up linearly.
Anyone that doesn’t think GPUs are high due to ETH mining has no idea what they’re talking about. The analysis from OP seemed ridiculous to me. I didn’t even see LHR mentioned in the article which are GPU manufacturers attempting to make GPUs unprofitable for miners so they can only be used for gaming. (Hint: didn’t work very well).
GPU mining is a thing for Ethereum, hopefully not for much longer
People have been saying “not much longer” for years. First EIP-1559 which frankly didn’t reduce my profitability much at all. Now ETH 2.0 with PoS.
That’s at least six months off and has already been delayed repeatedly.
That’s at least six months off and has already been delayed repeatedly.
where I live most people are mining ETH, unfortunately electricity is subsidized
Although AMD may deny it, I suspected this was a reason for their current success, not what they claim publicly...but this study seems to find no correlation (with ether and bitcoin prices)
https://www.windowscentral.com/best-gpus-crypto-mining
https://www.windowscentral.com/best-gpus-crypto-mining
Not sure what you are trying to say here but that list is weird. Why is 5700xt that great but 5700 not even listed? Not much difference between the two
I was told that the Nvidia Tesla cards are easier to buy.
It still doesn’t help that the Ethereum hashrate limiter is not imposed on the highest-end card (it’s FHR not LHR). The 3090 (aka 30-series Titan cards) are still really hard to find. The the 24GB of double-sided GDDR6x gets super hot though and all implementations of the card did not take that into account.
The 3080ti’s are easier to find as they’re LHR and price per hashrate ratio isn’t good. What I mean by easier is that bots have a tendency of going after cards with price/ratio.
It doesn’t help either that DDR5 RAM is also highly scalped. PC memory is in direct competition to GPU memory and vice versa.
The 3080ti’s are easier to find as they’re LHR and price per hashrate ratio isn’t good. What I mean by easier is that bots have a tendency of going after cards with price/ratio.
It doesn’t help either that DDR5 RAM is also highly scalped. PC memory is in direct competition to GPU memory and vice versa.
Please don't buy GPU's to mine cryptocurrency, you're contributing to a global chip shortage and I really want to play Halo Infinite in 4k.
For real though, cut that out.
For real though, cut that out.
You’re also contributing to global warming with mining and contribute to a scheme that allows criminals to transfer money. If your local hospital has to shut down because of ransomware you are making that possible.
Not at best buy they're not.
Yes it's hardware for professionals in GPU computing. But you can buy them in other places.
ETH Hashrate has tripled in the past year alone, adding 600 TH/s. A 3080 does about 100 MH/s. That's about 6 million 3080s.
In addition, it looks like 9.25 million 1000 series cards (1060, 1080, etc.) sold in the first quarter in which they were released, which we can extrapolate out to about 30-40 million in the first year.
It would be interesting to see what percentage of manufacturing capacity NVIDIA is at, as 25%-50% would put ETH GPU mining at the majority of sales. Especially considering that supposedly higher volume cards such as the 3060 do a quarter of the hashrate of a 3080, which would be about 24 million cards. Of course, AMD is also part of the conversation as well, but I believe that they are quite a bit less volume than NVIDIA. Then of course, not all GPU miners are mining ETH necessarily and so on.
It would be interesting to see what percentage of manufacturing capacity NVIDIA is at, as 25%-50% would put ETH GPU mining at the majority of sales. Especially considering that supposedly higher volume cards such as the 3060 do a quarter of the hashrate of a 3080, which would be about 24 million cards. Of course, AMD is also part of the conversation as well, but I believe that they are quite a bit less volume than NVIDIA. Then of course, not all GPU miners are mining ETH necessarily and so on.
PC Hardware can come from an Era with so many manufacturers and true-actual fierce competition, resulting in complete commoditisation of components. However, now in 2022, there are only 2 CPU vendors,2 GPU vendors and even with storage the number of manufacturers is small. Only TSMC can deliver 5nm and Mr Cook has all that capacity on lock (AMD and Intel will get a look only when he is done with it)
Mining like with politics is just some easy target to blame, the problem is Monopolies and duopolies.
Events have catalysed a market rife with monopolies and duopolies: these rule the supply chain, they have seen the true prices the market will accept, how can we expect prices to go back to "normal"?
Mining like with politics is just some easy target to blame, the problem is Monopolies and duopolies.
Events have catalysed a market rife with monopolies and duopolies: these rule the supply chain, they have seen the true prices the market will accept, how can we expect prices to go back to "normal"?
I walked into a computer store last night. There were shelves full of CPUs and SSDs and HDDs, and buying several of them at once would have no one batting an eye. Yet there was a policy: only 1 graphics card per customer per month, and that applies solely to graphics cards (and prebuilt computers containing graphics cards).
In other words, there is visibly a shortage of graphics cards that is not affecting any other components. That strongly suggests that there is something driving demand for graphics cards that is not driving demand for other key components of computers, which are available in sufficient supply. And the list of things that extra demand could be coming from is rather short indeed.
In other words, there is visibly a shortage of graphics cards that is not affecting any other components. That strongly suggests that there is something driving demand for graphics cards that is not driving demand for other key components of computers, which are available in sufficient supply. And the list of things that extra demand could be coming from is rather short indeed.
I waited 6 months for delivery of my CPU, then immediately had to wait for the RAM.. HEDT woes..
Yeah, I couldn't find ECC memory when I was building my Threadripper workstation mid 2020. I ended up with consumer-grade memory which was ridiculously cheap, however. (I think I got 128GB for less than $400.)
Not sure why they mention Bitcoin throughout, afaik no one is using GPUs for Bitcoin anymore, ASIC miners like Bitmain's S19 thoroughly dominate.
Bitcoin is the biggest crypto currency and uses proof of work. As mentioned in the conclusion, ASICs use the same resources as GPUs. This can have an effect on GPU prices. Additionally bitcoin is still the "gold standard" and most crypto currencies follow the price development of bitcoin.
Do you think Bitmain is winning bids for fab capacity against Nvidia/AMD? I guess their newest miner is slated to be on 5nm...
They can probably pay higher prices when mining rewards are high.
Maybe. Just hard to imagine a company with employees numbered in the low hundreds competing for fab capacity with nVidia.
NVidia has a far greater complexity to handle. GPUs do a lot of things and are more generalized with each iteration. In comparison ASICs are super simple chips.
If GPUs would still use the fixed rendering pipeline they started with ( only push your triangles and texture to the GPU and you get your image) they could also handle their business with a few hundred employees.
Just shrink your chips to the latest fab size, add more computing cores, maybe improve some algorithm if a better solution is found.
If GPUs would still use the fixed rendering pipeline they started with ( only push your triangles and texture to the GPU and you get your image) they could also handle their business with a few hundred employees.
Just shrink your chips to the latest fab size, add more computing cores, maybe improve some algorithm if a better solution is found.
A game theoretically designed paperclip maximizer is growing so large that we're starting to see collateral damage in the broad economy; car prices and availability issues, just to name one example.
Its dead easy to fix it though: for politicians to ban the purchase of Proof of Work cryptocurrencies. All of the major exchanges are centralized now anyway. Tank the price (via basic supply-demand microeconomics) and you solve electricity and chip supply issues.
The fact that this easy step hasn't been done suggests a broader conspiracy to destabilize Western nations and sow chaos, perhaps to usher in a transfer of global power from West to East. Note that China has banned the mining and trade of these cryptocurrencies long ago.
The fact that this easy step hasn't been done suggests a broader conspiracy to destabilize Western nations and sow chaos, perhaps to usher in a transfer of global power from West to East. Note that China has banned the mining and trade of these cryptocurrencies long ago.
Or maybe our western liberal democratic capitalist societies have long degenerated to a point of complete and utter directionlessnes.
Your conspiracy would have the west fucking themselves over.
How about this: a plutocratic elite has accumulated enough capital to be no longer accountable to anyone as almost each and every actor with power in society has been bought out - they don't care about you being able to afford a GPU for your world changing machine learning project for a fair price. They care about themselves and themselves only, and doing so are molding the rest of society into the same myopic egotistical form.
The recent pandemic and the sheer amount of people not willing or able to comply with simplest (masking, vaccinating, etc.) mitigation measures due to what boils down to a kind of malicious dumbness or idiocy driven by mass and social media reminds me of the kind of spirit that allowed the nazi party to come to power in Germany.
This doesn't bode well for ongoing crises like the destruction of the ecological support system of our species' home planet driven by greed and an endless appetite for convenience.
Your conspiracy would have the west fucking themselves over.
How about this: a plutocratic elite has accumulated enough capital to be no longer accountable to anyone as almost each and every actor with power in society has been bought out - they don't care about you being able to afford a GPU for your world changing machine learning project for a fair price. They care about themselves and themselves only, and doing so are molding the rest of society into the same myopic egotistical form.
The recent pandemic and the sheer amount of people not willing or able to comply with simplest (masking, vaccinating, etc.) mitigation measures due to what boils down to a kind of malicious dumbness or idiocy driven by mass and social media reminds me of the kind of spirit that allowed the nazi party to come to power in Germany.
This doesn't bode well for ongoing crises like the destruction of the ecological support system of our species' home planet driven by greed and an endless appetite for convenience.
The mineral industry has been experiencing this for centuries.
Forget car prices, look at overall energy prices this winter.
The cost of power is about to drop significantly. A leased 250 KW Suncell generator could mine a lot of crypto. https://www.facebook.com/profile.php?id=100011186387437
Well thanks, that's a good couple of minutes of hilarity. You should really use an /s though; I was hoping for a breakthrough in solar concentrators or something similar.
I don't see the direct link between energy prices and PoW mining. At least not beyond the theoretical supply and demand argument, and PoW mining energy demand is still relatively small. Care to elaborate?
I'm very curious to see how this plays out over the next year:
1. BTC dominance seems to be getting lower
2. Ethereum PoS seems very likely to launch this year IMO
3. Alt chains which run on PoS like AVAX and SOL have been eating into Ethereum's market share of the smart contract space. Newly onboarded retail users to crypto have been priced out of Ethereum due to fees over the past year. The alt chains running PoW seem to have no real usage.
4. Fed raising interest rates could dampen the growth of crypto asset prices
If I put myself in the shoes of a miner running GPU's, once the merge happens I only see these options:
1. I switch to a chain that is still profitable for GPU's. None of these have much demand for block space and unless that changes, other profit minded miners will be dumping the token.
2. Switch to some kind of P2P GPU-aaS like Render or Livepeer. I haven't been following this space to closely but I doubt it would have the same returns as mining Ethereum over the past years.
3. Exit out of mining and sell GPU's
1. BTC dominance seems to be getting lower
2. Ethereum PoS seems very likely to launch this year IMO
3. Alt chains which run on PoS like AVAX and SOL have been eating into Ethereum's market share of the smart contract space. Newly onboarded retail users to crypto have been priced out of Ethereum due to fees over the past year. The alt chains running PoW seem to have no real usage.
4. Fed raising interest rates could dampen the growth of crypto asset prices
If I put myself in the shoes of a miner running GPU's, once the merge happens I only see these options:
1. I switch to a chain that is still profitable for GPU's. None of these have much demand for block space and unless that changes, other profit minded miners will be dumping the token.
2. Switch to some kind of P2P GPU-aaS like Render or Livepeer. I haven't been following this space to closely but I doubt it would have the same returns as mining Ethereum over the past years.
3. Exit out of mining and sell GPU's
The article only attempts to show there's correlation, and ends up by saying "correlation doesn't imply causation, but maybe there's causation". So basically, we don't know.
I'm not blaming the author, because determining causation is hard, and checking there's correlation between two variables can still be interesting, but the article falls short of answering the question.
I'm not blaming the author, because determining causation is hard, and checking there's correlation between two variables can still be interesting, but the article falls short of answering the question.
They ran a pretty solid analysis of the subject. Not only do they look at correlation, but they regress out the trend line and show a correlation in the noise. Correlation of noise typically does imply a causal connection. They also look at correlation between GPUs that are used for mining and ones that are not and show that the correlation only holds for GPUs used in mining, so the case seems pretty tight. If you are just trying to poke holes in the analysis I would focus more on the possibility of there being other contributing factors that are more significant (i.g. supply chain issues). In any case the author was considerate enough to include the dataset and the python notebook so you can run subsequent analyses on your own.
Some quick things worth trying:
1. )Weight both the price of Cryptocurrencies and the price of GPUs for Market Size.
2.) Add in other explanatory variables to try to find the relative contributions of different sources.
I'm not trying to poke holes in the analysis, and as I said I'm not blaming the author for what they did. I'm just repeating what the author said:
> We can see a correlation between GPU prices and the value of crypto currencies, but correlation does not mean causation. A causation is plausible in this case.
And then they go on to repeat a very reasonable argument, which I happen to believe to be true, but the kind of argument that everyone was already making before looking at any data.
The fact that the correlations do not hold as much for CPUs is good, but still not enough to stablish causation. As you said, there might be some confounding factors that affect crypto and GPUs but not CPUs.
> We can see a correlation between GPU prices and the value of crypto currencies, but correlation does not mean causation. A causation is plausible in this case.
And then they go on to repeat a very reasonable argument, which I happen to believe to be true, but the kind of argument that everyone was already making before looking at any data.
The fact that the correlations do not hold as much for CPUs is good, but still not enough to stablish causation. As you said, there might be some confounding factors that affect crypto and GPUs but not CPUs.
They provide decently good evidence of causation, because of the lack of correlation with CPUs. Correlation doesn't prove causation, but it is evidence for it.
How does the lack of correlation with CPUs verify the GPU correlation?
Correlation can be shown to be causation when all factors are both known and controlled for. Controlling for CPU prices is one step towards that goal.
This is a circular argument. Why are CPU prices a confounding factor?
one can imagine factors that would cause both CPU and GPU prices to increase together. for example general purpose computing demand or supply-side constraints might cause all chip prices to rise.
if those non-crypto factors were confounding (say also happened to correlate with crypto-prices maybe due to some third unknown factor) then we would see CPU and GPU prices rise in response to crypto prices. we do not see that.
if those non-crypto factors were confounding (say also happened to correlate with crypto-prices maybe due to some third unknown factor) then we would see CPU and GPU prices rise in response to crypto prices. we do not see that.
> for example general purpose computing demand or supply-side constraints might cause all chip prices to rise.
This. Those who can't afford anymore powerful video cards now fall back to CPUs with decent integrated graphics, so that the higher than normal demand is therefore affecting their prices too.
This. Those who can't afford anymore powerful video cards now fall back to CPUs with decent integrated graphics, so that the higher than normal demand is therefore affecting their prices too.
Ok thanks, so it's like saying that we can ignore anything to do with manufacturing?
Correlation is correlated with causation, so I think this sort of exploration of a question is still valuable.
I agree that it's valuable and interesting, just not a definitive answer to the question
Did I miss where somebody promised you a definitive answer to the question?
So in the last little while, Ethereum mining has become almost impossible on GPUs with 4gb of RAM and below. Prices of these sub 4gb RAM cards have plummeted to match. So I would say, yes, high GPU prices are caused by cryptocurrency mining.
Cloud / data center GPU consumption has also gone up in the past couple years.
I sincerely wonder what is coming out datacenter mining these days.. what do companies do more that requires so much power ?
If you mention anything about the cloud, deep learning training on GPUs and the impact on the environment that has and the increasing costs of training and fine tuning your neural net, they won't care at all, they will still do it after all these years.
As you know it is still a valid point.
As you know it is still a valid point.
Mining Dogecoins and solving protein folding add the same value to society after all.
This is an interesting conclusion and I'd like to hear some reasoning behind it.
It's sarcasm
Could we use protien folding calculations for proof of work?
No, because those risk being easy in certain cases, and thus making the whole thing insecure.
Dogecoin mining hasn’t been done on GPUs for many many years now.
> If you mention anything about the cloud, deep learning training on GPUs and the impact on the environment that has and the increasing costs of training and fine tuning your neural net, they won't care at all, they will still do it after all these years.
There is a recent trend to discuss environmental impacts of training deep learning models in papers. See e.g. Latent Diffusion Models (Heidelberg), RETRO (Deepmind).
Further, I would posit that machine learning has a much clearer value proposition than cryptocurrencies which are a highly speculative.
Finally, your argument is an example of https://en.wikipedia.org/wiki/Whataboutism. Rather than arguing against facts presented you are changing the subject to say "look here though! this happens here and you're all hypocrites for not noticing it!" This makes your argument seem defensive, biased and unconvincing.
There is a recent trend to discuss environmental impacts of training deep learning models in papers. See e.g. Latent Diffusion Models (Heidelberg), RETRO (Deepmind).
Further, I would posit that machine learning has a much clearer value proposition than cryptocurrencies which are a highly speculative.
Finally, your argument is an example of https://en.wikipedia.org/wiki/Whataboutism. Rather than arguing against facts presented you are changing the subject to say "look here though! this happens here and you're all hypocrites for not noticing it!" This makes your argument seem defensive, biased and unconvincing.
[deleted]
Except that I already agreed with the article before you commented [0], so it isn't Whataboutism. (You clearly knew due to your own reply to my comment). [1] Somehow, you thought I brought up the subject, or didn't I just simply agree with the parent comment too?
Seems like you rushed to comment towards the wrong person.
> ...than cryptocurrencies which are a highly speculative.
How can a regulated stablecoin like USDP or USDC, or even CBDCs sitting on a cryptocurrency technology like XRPL or the Stellar Network etc. be 'highly speculative'?
I hope you haven't shown your 'bias' and targeted me, instead of the parent comment.
[0] https://news.ycombinator.com/item?id=29759242
[1] https://news.ycombinator.com/item?id=29759347
Seems like you rushed to comment towards the wrong person.
> ...than cryptocurrencies which are a highly speculative.
How can a regulated stablecoin like USDP or USDC, or even CBDCs sitting on a cryptocurrency technology like XRPL or the Stellar Network etc. be 'highly speculative'?
I hope you haven't shown your 'bias' and targeted me, instead of the parent comment.
[0] https://news.ycombinator.com/item?id=29759242
[1] https://news.ycombinator.com/item?id=29759347
> Except that I already agreed with the article before you commented [0], so it isn't Whataboutism.
Apologies but I really had a tough time parsing the last sentence in your initial comment for some reason. I see now that you agreed with the article. I'll concede that you were not technically using that strategy in its purest form. You were, however, deflecting to another issue.
> How can a regulated stablecoin like USDP or USDC, or even CBDCs sitting on a cryptocurrency technology like XRPL or the Stellar Network etc. be 'highly speculative'?
I said "cryptocurrencies" to refer to cryptocurrency broadly (so not just stablecoins). I had hoped that was obvious, apologies.
Machine learning has offered tangible benefits for natural language processing (GPT), semantic search (CLIP/faiss indices), digital art (GLIDE/DALL-E) and protein folding (AlphaFold).
Cryptocurrencies certainly promise to solve a lot of very severe issues in the world such as banking for the unbanked but it's less obvious when it accomplishes these goals. Could you list some tangible benefits that have been accomplished already in the crypto scene?
Apologies but I really had a tough time parsing the last sentence in your initial comment for some reason. I see now that you agreed with the article. I'll concede that you were not technically using that strategy in its purest form. You were, however, deflecting to another issue.
> How can a regulated stablecoin like USDP or USDC, or even CBDCs sitting on a cryptocurrency technology like XRPL or the Stellar Network etc. be 'highly speculative'?
I said "cryptocurrencies" to refer to cryptocurrency broadly (so not just stablecoins). I had hoped that was obvious, apologies.
Machine learning has offered tangible benefits for natural language processing (GPT), semantic search (CLIP/faiss indices), digital art (GLIDE/DALL-E) and protein folding (AlphaFold).
Cryptocurrencies certainly promise to solve a lot of very severe issues in the world such as banking for the unbanked but it's less obvious when it accomplishes these goals. Could you list some tangible benefits that have been accomplished already in the crypto scene?
> Could you list some tangible benefits that have been accomplished already in the crypto scene?
The partnership between Moneygram and Stellar. [0] Using the USDC stablecoin on the stellar network for near-instant settlements and transfers.
Stellar pilot into CBDCs in Ukraine, [1] and Ripple used for CBDCs for Bhutan. [2]
[0] https://ir.moneygram.com/news-releases/news-release-details/...
[1] https://www.coindesk.com/policy/2021/12/14/ukraine-commercia...
[2] https://ripple.com/insights/bhutan-advances-financial-inclus...
The partnership between Moneygram and Stellar. [0] Using the USDC stablecoin on the stellar network for near-instant settlements and transfers.
Stellar pilot into CBDCs in Ukraine, [1] and Ripple used for CBDCs for Bhutan. [2]
[0] https://ir.moneygram.com/news-releases/news-release-details/...
[1] https://www.coindesk.com/policy/2021/12/14/ukraine-commercia...
[2] https://ripple.com/insights/bhutan-advances-financial-inclus...
The answer to the original question is "yes," but growth of ML and covid supply chain issues are also to blame.
I guess we'll find out. It's increasingly likely the merge will happen his year. When ETH moves to PoS, mines will likely move to other currencies, or sell their hardware, that said the return for alternative crypto's still on PoW is unlikely to match that of ETH. I would be very surprised if demand from miners is not reduced.
Let's hope this happens. They have been promising this for a long time. It's the "fusion energy will be available soon" of the crypto currency space.
You can raise a lot of money on potential. When something becomes real suddenly it has to work.
Its like the Oak Island treasure. If they ever actually dig something up, it'll kill the tourist revenue.
Its like the Oak Island treasure. If they ever actually dig something up, it'll kill the tourist revenue.
Author is looking for the wrong correlation - the price is only indirectly linked to the amount of silicon being diverted to crypto. Should be correlating to hash capacity.
Some crypto miners are accumulating so much wealth that they are looking into building their own chips and hardware to mine even harder than what you can buy commercially from Nvidia.
Not for ETH. ethash is memory controller bound, not chip bound. This is why older generation GPUs are higher ROI than buying latest and greatest.
Why would Bitmain be releasing the Antminer E9 if it has no benefit over GPU?
Ethash is bounded by memory bandwidth, sure, which is why HBM-based ASICs and FPGAs will be better than non-HBM GPUs in almost every case for mining ETH.
Ethash is bounded by memory bandwidth, sure, which is why HBM-based ASICs and FPGAs will be better than non-HBM GPUs in almost every case for mining ETH.
It isn't just hash/watt, it is $/hash. HBM is expensive. This is also why the bitmain boxes only come with 6gb. The dag will eventually grow and render them useless, just like we saw with 4gb gpus...
The ethash asic's are not that much better than GPUs as they are all bound by memory controller speed. Even with faster memory, the gate is always how fast you can move through the DAG. That red circle is the issue...
https://www.vijaypradeep.com/blog/2017-04-28-ethereums-memor...
The only benefit of the bitmain boxes is that they are plug and play. You buy one box, stick it on the shelf, plug it in and that's it. GPUs are significantly more difficult to tune and run, especially at large scale.
The ROI on these boxes is terrible... imaging you buy one and it burns out... zero chance for repairs on any sane timeline.
Why does bitmain sell it? Easy money for a company that has a long history of ethics violations. When I was buying L3+'s directly from bitmain, they'd come clearly used.
The ethash asic's are not that much better than GPUs as they are all bound by memory controller speed. Even with faster memory, the gate is always how fast you can move through the DAG. That red circle is the issue...
https://www.vijaypradeep.com/blog/2017-04-28-ethereums-memor...
The only benefit of the bitmain boxes is that they are plug and play. You buy one box, stick it on the shelf, plug it in and that's it. GPUs are significantly more difficult to tune and run, especially at large scale.
The ROI on these boxes is terrible... imaging you buy one and it burns out... zero chance for repairs on any sane timeline.
Why does bitmain sell it? Easy money for a company that has a long history of ethics violations. When I was buying L3+'s directly from bitmain, they'd come clearly used.
Does increased demand raise prices?
But that's not the question. It asks whether they're to blame for high GPU prices, which presumes a certain threshold before the criteria is met. If there were a few hundred GPUs bought by miners, and that demand caused GPU prices to climb $10 over MSRP, I doubt that would qualify as them being responsible for "high" prices, even though they did raise it.
For some reason, only secondary markets follow the law of supply and demand. On the primary market, price is fixed so you just get shortages.
"The correlation is stronger for Bitcoin than for Ethereum" indicates that there is no direct causation since GPUs are useless for Bitcoin mining.
The author suggests that the demand for ASICs may contribute to the chip shortage which then drives up GPU prices, but that doesn't explain the lack of correlation with CPU prices.
The author suggests that the demand for ASICs may contribute to the chip shortage which then drives up GPU prices, but that doesn't explain the lack of correlation with CPU prices.
The article mentioned causation isn't shown, but can be inferred. However the inference comes down to "they happen at the same time and are related", so just correlation. All work enabled by new generations of GPUs happened at the same time and is related in the same way. Someone would have to come up with some real numbers of the actual number of cards used in specific scenarios. Mining will be in there, but so will scientific and engineering modelling, design applications, and obviously gaming, as well as some others I may be missing. What percentage of cards was purchased primarily for what applications?
Short answer - yes. I don't have ANY data to prove this point, but strictly empirically - 1) it only takes a small number of GPUs bought due to increased demand to significantly alter price, all because the shop inventories are small. 2) Eth is not the only GPU mined coin and miners can easily and quickly switch to RVN or whatever else when Eth is diving. 3) outside factor - Bitmine is placing big orders at TSMC which also impacts capacity to produce GPUs.
Short answer - yes.
I don't have any data to prove this point, but strictly empirically - 1) there's a shortage of chips in the world and the crypto market isn't even a dent on the total demand
Might have also been ML
Better an AI researcher or scientist get one of these cards than some scumbag miner.
I’d rather a scumbag miner got it than a PoS “scientist” working on facial recognition technology for advertising or governmental use.
I too would rather see cards going to people working on protein folding AI and similar.... but I must admit your use cases are likely the more dominant ones.
I’m annoyed as the next guy that my deep-learning rigs are costing 5 figures, but “scumbag” might be a little strong for people who arbitrage NVIDIA’s repeated failures to effectively segment their GPU offering?
But they are. I ranted about this here a few weeks ago, but we're still getting intermittent rolling blackouts because of energy shortages caused by miners moving into the country (we have cheap electricity… for now at least).
As I mention above: I’ve got no special love for Ethereum miners.
But why you’re trying to lay your municipality’s busted, corrupt-ass utility’s issues at their feet is perplexing.
Ethereum miners at their worst are the maggots crawling around in your community’s failure to form a voting bloc to reform utilities.
At best they provide an arbitrary demand for electricity that makes solar panels obvious.
So I missed the part where you’re a newcomer troll.
But why you’re trying to lay your municipality’s busted, corrupt-ass utility’s issues at their feet is perplexing.
Ethereum miners at their worst are the maggots crawling around in your community’s failure to form a voting bloc to reform utilities.
At best they provide an arbitrary demand for electricity that makes solar panels obvious.
So I missed the part where you’re a newcomer troll.
After that "troll" bit I have no desire to engage with you. Have a look at the guidelines, old-timer.
I apologize for being rude. I have my reasons for being touchy about this but taking it out on you is unfair.
It is deeply weird to me that of all the people involved you place the failure on Nvidia here. Regardless, I'm ok with the term "scumbag" for anybody who tries to profit from a negative-sum system.
No I think it's fair, unless they heat up their bedroom while mining.
Why do you think an AI researcher can't be a scumbag as well? Clearview AI anyone?
Definitely! Demand for ml stuff is rising two digits per year at least.
Geizhals is an Austrian website, not German. The just tend to have a .de URL too for German shops. Source: Imprint https://unternehmen.geizhals.at/impressum/
One of the craziest videos I saw last year was a mob of people rushing a Micro Center to get their hands on a 3080 TI: https://youtu.be/UNcx9JdC9VM?t=239
And those are all LHR cards. So in that specific case they were probably mostly gamers tired of waiting for an upgrade.
Wasn't the LHR DRM instantly broken?
Not exactly. Some degree of the lower hashrate was circumvented, but not at all a complete reversal.
You think that's crazy, I remember people rushing to get Windows 95.
We've seen same thing happening with toilet paper.
And yet only one is a requirement for life (sans bidet)
AI, VR and crypto all require GPUs and coming of age at the same time..
Combo of crypto mining and the whole supply chain situation being in a bad situation
TLDR: Yes.
Yup. The answer is simply yes.
Don’t look for a zebra when all you have is a horse.
Don’t look for a zebra when all you have is a horse.
More nuanced TLDR from the actual article:
> We can see a correlation between GPU prices and the value of crypto currencies, but correlation does not mean causation. A causation is plausible in this case.
> We can see a correlation between GPU prices and the value of crypto currencies, but correlation does not mean causation. A causation is plausible in this case.
Indeed. A quick search shows chip supply side issues are a big factor. Increased demand, reduced supply.
https://www.pcgamer.com/why-you-still-cant-buy-a-graphics-ca...
https://www.pcgamer.com/why-you-still-cant-buy-a-graphics-ca...
.
Read the article. The author corrected for the overall market trends using linear regression.
This would show up in the CPUs. But their prices are stable.
For me, that indicates that it's not a "general chip shortage" issue (i.e. not "ASICs are making the chip shortage worse" either), at which point https://news.ycombinator.com/item?id=29766829 makes it hard to see the correlation as caused by cryptocurrencies.
It's been years since the crypto boom - why hasn't production ramped up accordingly? Or are manufacturers waiting forever until it blows over? Because that may never happen.
Maybe you've heard of global supply chain shortages, covering all manner of chips and other components? And a pandemic producing sudden changes in demand, as
Meanwhile, mining hardware demand depends on cryptocurrency prices, which go up and down like a yoyo. Only a food would invest billions in a new chip plant when demand might have collapsed by the time it's finished.
Meanwhile, mining hardware demand depends on cryptocurrency prices, which go up and down like a yoyo. Only a food would invest billions in a new chip plant when demand might have collapsed by the time it's finished.
[deleted]
Cryptocurrency was and is volatile enough that the correct play is to not build out long-term capacity for what very well could be a flash-in-the-pan phenomenon.
Production of something that complex isn't trivial or quick to ramp up, nor is there an unlimited production ceiling. And that's a problem, because there is effectively an unlimited demand for cryptocurrency mining equipment compared to other GPU markets.
I might buy the latest GPU to play PC games at max detail. But there's no increase in value in me buying 20 GPUs so there's effectively a cap on how many GPUs the gaming market will demand. Same goes for other use-cases like scientific computing. In those cases ore GPUs do allow them to solve harder problems or finish calculations faster, but buying more GPUs is more expensive so eventually scientists hit the limits on their budgets.
Cryptocurrency mining is different though since it provides a direct path to turning more computing power into more income. As long as the marginal costs to mine on a GPU are below the expected return and the payback time for the fixed cost of buying the GPU in the first place isn't too long, it nearly always makes sense to buy more GPUs. To put it another way, if it makes economic sense for me to mine on 1 GPU, it makes sense for me to mine with 10, or 100, or 1000. In fact it probably makes more sense to mine with more GPUs since there are economies of scale involved. And since miners are more concerned with their marginal costs than the fixed costs, even huge increases in GPU prices don't alter their behavior much. As long as you're making money running a card, who cares if the payoff time for it increases a few months?
I might buy the latest GPU to play PC games at max detail. But there's no increase in value in me buying 20 GPUs so there's effectively a cap on how many GPUs the gaming market will demand. Same goes for other use-cases like scientific computing. In those cases ore GPUs do allow them to solve harder problems or finish calculations faster, but buying more GPUs is more expensive so eventually scientists hit the limits on their budgets.
Cryptocurrency mining is different though since it provides a direct path to turning more computing power into more income. As long as the marginal costs to mine on a GPU are below the expected return and the payback time for the fixed cost of buying the GPU in the first place isn't too long, it nearly always makes sense to buy more GPUs. To put it another way, if it makes economic sense for me to mine on 1 GPU, it makes sense for me to mine with 10, or 100, or 1000. In fact it probably makes more sense to mine with more GPUs since there are economies of scale involved. And since miners are more concerned with their marginal costs than the fixed costs, even huge increases in GPU prices don't alter their behavior much. As long as you're making money running a card, who cares if the payoff time for it increases a few months?
I've read that takes 2 years to get a new semi-conductor fab up and running. While demand for GPUs has skyrocketed not only in crypto but in other areas.
Couple that with us going into 2 years of global lockdowns and subsequent supply disruptions have probably exacerbated the situation greatly.
Couple that with us going into 2 years of global lockdowns and subsequent supply disruptions have probably exacerbated the situation greatly.
It takes two years under normal circumstances; from what I understand backlogs for the lithography equipment are a huge bottleneck in the industry since there are only a few companies that make such specialized machines. They were already backordered for years pre-pandemic, with most of those getting pushed out because of supply constraint issues.
We’re never going to return to the level of industrial output pre-Covid. There are a dozen high-likelihood scenarios down the pipe in the 2020s (Russia, China/Taiwan, climate drought / famine, etc) that will continue holding global productivity down. We’re looking at global stagflation for most of the rest of our lives as a result, meaning crypto is a good hedge. NVidia just needs to start pricing its top-tier GPUs for crypto farms, then refurbishing the last generation for consumers when the crypto farms upgrade.
We’re never going to return to the level of industrial output pre-Covid. There are a dozen high-likelihood scenarios down the pipe in the 2020s (Russia, China/Taiwan, climate drought / famine, etc) that will continue holding global productivity down. We’re looking at global stagflation for most of the rest of our lives as a result, meaning crypto is a good hedge. NVidia just needs to start pricing its top-tier GPUs for crypto farms, then refurbishing the last generation for consumers when the crypto farms upgrade.
If Ethereum moves to PoS, half the crypto GPU market goes poof in an instant. Not a good thing to hedge more chip fabs on, I would bet.
It will move from one to another coin and profitability will decrease slightly unless supply induces demand.
Exponential growth outgrows any supply, so that's a possibility
You are basically advising them to be crypto bulls.
Isn't the complexity of the hash challenge designed to match whatever production of computing gears in value?
everyone is competing for the fastest TMSC silicon and it takes longer than the amount of time so far to decide to build new capacity and then build it and then make products.
Just waiting for the EU and US to restrict, crackdown or regulate bitcoin and other private crypto.
At the minimum ban regulated institutions from dealing in it.
Problem is too many people are already heavily invested in the pyramid scheme.
At the minimum ban regulated institutions from dealing in it.
Problem is too many people are already heavily invested in the pyramid scheme.
Most capitalists see crypto and the GPU market as just capitalism working as intended. There's nothing stopping gpu manufacturers from producing more product.
Given that crypto is already 10 years old and has other things depending on it you sound like an old man yelling at some kids on their lawn.
Given that crypto is already 10 years old and has other things depending on it you sound like an old man yelling at some kids on their lawn.
What “other things” depend on cryptocurrencies which are about something other than selling cryptocurrencies? NFTs are the most common example but their valuations depend on people using the art as a loss leader to sell tokens.
> capitalism working as intended.
Needlessly destroying the planet and making it more expensive for me to drown the inevitability of impending doom by playing AAA video games.
Well ain't that just swell.
Needlessly destroying the planet and making it more expensive for me to drown the inevitability of impending doom by playing AAA video games.
Well ain't that just swell.
sabellito(3)
yes
> Bitcoin miners rarely use GPUs anymore, but ASICs
Seeing the title and the conclusions, how can this be the case? Computationally they're not much behind ASICs per $, are much more broadly available to buy and are easier to sell when needed.
Seeing the title and the conclusions, how can this be the case? Computationally they're not much behind ASICs per $, are much more broadly available to buy and are easier to sell when needed.
GPUs are used to mine cryptocurrencies other than Bitcoin.
And GPUs are better positioned to pivot at any point and mine something else or go on resale when profitability equations change.
BTC ASICS have much better performance per watt for mining Bitcoin. It’s almost impossible to be profitable with btc mining on GPUs. ETH and many other alts are mined on GPUs though.
For Bitcoin mining’s computational needs, the specific ASICS designed for Bitcoin mining are several orders of magnitude ahead of GPUs in efficiency.
> Computationally they're not much behind ASICs per $ […]
Is this really true for Bitcoin? I’ve been out of the mining game for a long time, but ~5 years ago this certainly wasn’t true. Back then GPUs were at least an order of magnitude less efficient than ASICs.
Is this really true for Bitcoin? I’ve been out of the mining game for a long time, but ~5 years ago this certainly wasn’t true. Back then GPUs were at least an order of magnitude less efficient than ASICs.
Anyone who buys a GPU second-hand is an idiot. They would have been running at maximum silicon temperature 24/7 with the result of massive wear.
It really doesn’t work that way. They don’t have moving parts (except the fan which is easily replaced); the question is electron migration and heat related problems. If they’re kept well-cooled they could have another ten years in them.
Actually, having uneven load is probably worse for GPUs than constant high load due to components contracting/expanding every time temperature changes (think rocking something from side to side to take it out).
For the same reason you might (needs detailed analysis) economically be better off overall by keeping the temperature in your house constant as opposed to saving energy with a schedule.
For the same reason you might (needs detailed analysis) economically be better off overall by keeping the temperature in your house constant as opposed to saving energy with a schedule.
I'd be much more afraid of the GPU chip unsoldering itself from the mainboard (which is what happens usually if the card dies unexpectedly). If it wears out in 20 years instead of the expected 50… well, good riddance.
[deleted]
Are you trying to tell me that the price for a thing is affected by its supply and demand? The horror!
Rather to which extent crypto in particular has affected the market.
Your comment comes from a place of assuming the answer to the question, which is kind of twofold.
Does the profit from proof-of-work mining increase the acceptable GPU price for miners AND is there enough demand from these miners for GPUs due to the profit equation to significantly inflate those prices?
If you assume yes, you get yes as the answer without proving anything.
Does the profit from proof-of-work mining increase the acceptable GPU price for miners AND is there enough demand from these miners for GPUs due to the profit equation to significantly inflate those prices?
If you assume yes, you get yes as the answer without proving anything.
Right, because GPU's are expensive and scarce because of crypto, and all other inflation, demand and supply chain issues are a completely unrelated topic that just happens to be coinciding... /s
I tried to correct for overall price development. The correlation still persists.
The GPU pricing and availability has been a problem well before the current environment. Well before COVID even.
GPU's went up as crypto gained popularity, crypto has gained popularity as governments kept printing more money handouts. We now have high inflation, high demand, chip shortages, supply chain shortages and high crypto popularity because of out of control fiat printing.
This also coincides with the governments sudden desire to regulate the industry despite it existing for nearly a decade now. Its a leak in the their system. You can't print money and hand it out where you want if someone has a hedge against your money printers.
This also coincides with the governments sudden desire to regulate the industry despite it existing for nearly a decade now. Its a leak in the their system. You can't print money and hand it out where you want if someone has a hedge against your money printers.
While I agree with you that out of control fiat printing is a problem, I think you're overstating things. You can't ignore the role of the pandemic in the supply chain issues, and you can't ignore that many turn to crypto only to gain more fiat. I say this as someone who has been in crypto since 2011, and I've seen what happens during the bear markets. Many who aren't "true believers" or whose bags are too heavy abandon it, even though the money printers haven't changed during those times.
Alternate answer: No, the manifacturing cost of the gpu stays relatively the same, greedy sellers increase price because of the increased demand. It's not like they wouldn't make profit on regular prices.
It seems odd to single out greedy sellers when the key demand here is people hoping to print money. It's all greed here.
For the matter of price, i don't care what other buyers do with their purchased goods. I care how the seller treats the customer.
If we were to discuss other aspects of mining then yes, i would point to other greedy participants in this chain
If we were to discuss other aspects of mining then yes, i would point to other greedy participants in this chain
If a seller has limited capacity to produce, is it better for a motivated buyer to be able to buy one, albeit at a price higher than they’d like? Or is it better if the price is what all buyers would like, but many motivated buyers can’t get one at all?
Neither is perfectly “right”; it’s a direct trade off between “they’re available if you want one” and “they’re as inexpensive as you’ve come to expect from history”.
Neither is perfectly “right”; it’s a direct trade off between “they’re available if you want one” and “they’re as inexpensive as you’ve come to expect from history”.
My personal answer on this question is the later. Price stays the same. Eventually the produced products will get into some people's hands. The only difference is how much of their money will end up in the seller's pocket. The motivation you have doesn't scale linearly with the amount of money you can spend. Eg you may have very poor people who would make great use of product X and are very motivated, but they can't grt their hands on it because it is too expensive for them. See the health/surgery industry as a great example.
But it wouldn't play out that way.
If demand exceeds supply, but the manufacturer continues to sell at normal prices, a scalper market opens up.
Scalpers capture the difference between manufacturer sale price and market value. That's their business, so they have more time to dedicate to the search for product than the "poor people" who "should" have access to the product.
Surgery is not a good example because there is no reseller market there. Medication would be closer but of course med sales are highly regulated. I agree with the point you're getting at though -- access to essential health care should not be financially bifurcated.
If demand exceeds supply, but the manufacturer continues to sell at normal prices, a scalper market opens up.
Scalpers capture the difference between manufacturer sale price and market value. That's their business, so they have more time to dedicate to the search for product than the "poor people" who "should" have access to the product.
Surgery is not a good example because there is no reseller market there. Medication would be closer but of course med sales are highly regulated. I agree with the point you're getting at though -- access to essential health care should not be financially bifurcated.
There’s an additional wrinkle in that this choice tends to lead to intermediate sellers who take the latter choice and turn it into the former choice with additional friction and fraud risk (and no additional profit to the producer, which might give them incentive to scale up production to meet the overage of demand.)
High end GPUs are readily available on EBay and other secondhand markets and I’ve resorted to buying them there to get them in for ML training machines. (Same with consoles, concert and sporting event tickets, and other limited production, desirable items.)
High end GPUs are readily available on EBay and other secondhand markets and I’ve resorted to buying them there to get them in for ML training machines. (Same with consoles, concert and sporting event tickets, and other limited production, desirable items.)
> greedy sellers increase price because of the increased demand
The way supply and demand works can be more subtle than that. Imagine two sellers selling the same widget, one has 50 units and is selling at $100, the other has 60 units and is selling at $120. As long as the demand is below 50 units, buyers will prefer the first seller, and the price will be $100. Once the demand gets above 50 units, the first seller has no more units, and the price is now $120 since buyers have no choice other than buy from the second seller. Notice that at no moment did any of the sellers increase their price. And the reason for the second seller starting with a higher price is most probably not greed, but higher costs (for instance, their store being in a place with a higher rent).
The way supply and demand works can be more subtle than that. Imagine two sellers selling the same widget, one has 50 units and is selling at $100, the other has 60 units and is selling at $120. As long as the demand is below 50 units, buyers will prefer the first seller, and the price will be $100. Once the demand gets above 50 units, the first seller has no more units, and the price is now $120 since buyers have no choice other than buy from the second seller. Notice that at no moment did any of the sellers increase their price. And the reason for the second seller starting with a higher price is most probably not greed, but higher costs (for instance, their store being in a place with a higher rent).
I get your point but I am not sure the price gaps we're dealing with right here fall into these cases.
Supply steady. Demand exponential increase due to cryptocurrencies.
Blame whomever you wish.
Blame whomever you wish.
I just don't get why people hide behind their finger. This is capitalism 101. You either like it and go by it or dislike it and try to change it. For some reason X the demand for product Y has increased which leads to price bump. If you are pro capitalist economy then you just accept it for what it is. If you don't like it then discuss alternate economies. The rules of the economy are the ones to blame, not the people who play by the rules.
It probably has something to do with the fact that crypto is perceived as having no social value, and therefore people are less inclined to accept negative consequences that may result from such an activity.
Yes this is probably it. But if we walk down that route, what prevents anyone from having a say into what everybody else does with their products. Eg: If think there is no social value in crafting wooden cups, do I have a say in what you do with your purchased wood?
Not you, as an individual, but as a society, absolutely. There are plenty of laws that regulate or forbid certain activities.
Surely, but are we going to discuss making mining illegal because it drives up gpu prices?
It's already been banned in various countries, including a number of US towns.
Really? I was totally not aware of that, do you have a resource?
Check this out:
https://www.theverge.com/2018/3/16/17128678/plattsburgh-new-...
https://www.govtech.com/policy/washington-utility-will-uphol...
https://www.theverge.com/2018/3/16/17128678/plattsburgh-new-...
https://www.govtech.com/policy/washington-utility-will-uphol...
Interesting. This seems to be concerned with grid electricity consumption which is kinda reasonable
Cost is not price. The article is about price.
Cost is a major factor of price (so is profit margin). By stating that cost is relatively the same I highlight the stable factor in the price, at the same time highlighting the changed factor in the price (profit)
So your theory is that sellers weren’t greedy before?
No, my theory is that this the true core of the disscussion here should be how the economy works in general, rather than a specific case of supply and demand.
Why? We are talking about a specific case.
Don’t get me wrong, I love generality, but it’s clear that the trees don’t let you see the forest here.
Sellers were as greedy before the price rise, so greed is not the cause.
The difference here is that: 1) Supply difficulties mean there’s less in offer. 2) crypto miners have strong demand, since they can make money on those gpus.
I would argue that the market is working fairly well, since gpus are being allocated for their best use. Gaming is great, but people seem to really love their eth.
Don’t get me wrong, I love generality, but it’s clear that the trees don’t let you see the forest here.
Sellers were as greedy before the price rise, so greed is not the cause.
The difference here is that: 1) Supply difficulties mean there’s less in offer. 2) crypto miners have strong demand, since they can make money on those gpus.
I would argue that the market is working fairly well, since gpus are being allocated for their best use. Gaming is great, but people seem to really love their eth.
What if crypto currencies are to blame for low GPU prices?
In other words, what if the opportunity to make money via crypto currencies has accelerated the development of GPU capabilities and availability beyond what would have happened if crypto currencies never came into existence?
In other words, what if the opportunity to make money via crypto currencies has accelerated the development of GPU capabilities and availability beyond what would have happened if crypto currencies never came into existence?
Alternate opinion: proof of work mining provides a valuable service to society much moreso than videogames and the premium on GPUs reflects this.
This isn't mainstream opinion of course, however I predict it will be. Crypto mining is the true first electricity buyer of last resort. It's a productive activity which can use megawatts of power and be turned off at a moments notice in order for the grid to meet the demands of society (as what is happening in Texas right this very moment). What other MW scale industrial process can turn off at the flip of a switch? It's a defacto subsidy on green power projects.
The HN crowd hates to see it, but crypto mining is becoming integrated at the deepest levels with our electricity grid. It won't happen everywhere as some jurisdictions may ban this "unholy union" but the moment public opinion changes, this integration of grid and crypto is a slam dunk no brainer.
This isn't mainstream opinion of course, however I predict it will be. Crypto mining is the true first electricity buyer of last resort. It's a productive activity which can use megawatts of power and be turned off at a moments notice in order for the grid to meet the demands of society (as what is happening in Texas right this very moment). What other MW scale industrial process can turn off at the flip of a switch? It's a defacto subsidy on green power projects.
The HN crowd hates to see it, but crypto mining is becoming integrated at the deepest levels with our electricity grid. It won't happen everywhere as some jurisdictions may ban this "unholy union" but the moment public opinion changes, this integration of grid and crypto is a slam dunk no brainer.
Assuming everyone commenting here has read the post, if it is 'cryptocurrencies' 'like' Bitcoin and Ethereum that use PoW? Then, that is an undeniable, and an undisputed; Yes.
However, if you are talking 'cryptocurrencies' that means you are talking about all of them. Not all cryptocurrencies are like Bitcoin, and Ethereum and not all of them use PoW. So the title should be:
However, if you are talking 'cryptocurrencies' that means you are talking about all of them. Not all cryptocurrencies are like Bitcoin, and Ethereum and not all of them use PoW. So the title should be:
'Is Bitcoin, and Ethereum to blame for High GPU Prices?' 'Are cryptocurrencies like Bitcoin, and Ethereum to blame for High GPU Prices?'
It's a bit funny that the blogpost found a higher correlation between bitcoin and GPU prices than between ethereum and GPU prices.
You don't mine bitcoin with a GPU. Just because it correlates doesn't mean it's a causal effect.
Looking at shop prices is probably suboptimal compared to looking at auction prices, shop prices lag too much. This summer you could almost see demand shifting in real time based on the ethereum price. There are probably other confounding factors such as summer is vacation and warm weather time so demand from both gamers and miners is reduced and perhaps there was more supply as well?
Then the validity of the correlations is "verified" by checking if there exists a correlation between CPUs and cryptocurrency prices? What does this verify, it's just another correlation?
Then the validity of the correlations is "verified" by checking if there exists a correlation between CPUs and cryptocurrency prices? What does this verify, it's just another correlation?
The argument is that bitcoin ASIC manufacturing takes capacity away that could be devoted to GPUs. I don't know enough about chip manufacturing to know if that's true.
Seems plausible, as does the fact that high end gpu crypto mining drives up low end gpu card prices as well. No one is using a 1030 to mine anything, but those prices are up too.
Seems plausible, as does the fact that high end gpu crypto mining drives up low end gpu card prices as well. No one is using a 1030 to mine anything, but those prices are up too.
This nuance isn’t helpful for this discussion I think. 1.4T of overall cryptocurrency 2.2T is POW (68%). BTC and ETH alone account for 57% of all cryptocurrency market share [1].
Proof of stake is 9% of the overall market. I’m not sure where the other 23% go but I don’t think any one idea has captured a more significant piece. It’s like arguing that saying the energy sector is responsible for CO2 emissions. Like sure, you could make the case that wind and solar are net negative but it’s not a helpful contribution to the discussion.
[1] https://coincodex.com/cryptocurrencies/sector/proof-of-work/
Proof of stake is 9% of the overall market. I’m not sure where the other 23% go but I don’t think any one idea has captured a more significant piece. It’s like arguing that saying the energy sector is responsible for CO2 emissions. Like sure, you could make the case that wind and solar are net negative but it’s not a helpful contribution to the discussion.
[1] https://coincodex.com/cryptocurrencies/sector/proof-of-work/
You have a point for the purpose of calculating the scale of the impact. But it is also true that a significant part of crypto does not drive demand for hardware or electric power.
There are proof of stake coins with multibillion dollar valuations that bring a novel combination of smart contracts and other "platform" capabilities and low cost. This is important because these technologies ensure that crypto can survive if the cost and latency of proof of work becomes a drag on both usefulness and valuation. Kind of like renewables have shown that coal can be phased out. In Germany, renewables are now 40% of electricity production, projected to become 60% by 2030. Trends matter.
There are proof of stake coins with multibillion dollar valuations that bring a novel combination of smart contracts and other "platform" capabilities and low cost. This is important because these technologies ensure that crypto can survive if the cost and latency of proof of work becomes a drag on both usefulness and valuation. Kind of like renewables have shown that coal can be phased out. In Germany, renewables are now 40% of electricity production, projected to become 60% by 2030. Trends matter.
>proof of stake coins with multibillion dollar valuations
I can mint a billion PoS shitcoins and sell myself one for ten dollars and suddenly, I have a valuation of ten billion. That doesn't make it less of a shitcoin. Every PoS coin is one such shitcoin.
I can mint a billion PoS shitcoins and sell myself one for ten dollars and suddenly, I have a valuation of ten billion. That doesn't make it less of a shitcoin. Every PoS coin is one such shitcoin.
I have a hard time taking a gesture toward "multibillion dollar valuations" seriously in a realm where market manipulation is rampant.
Bitcoin can't be economically mined by GPUs so it's not to blame at all in this crypto hype cycle or even the last one of 2017. The people on reddit you see with racks full of 3000 series cards are mining Ethereum.
All cryptocurrencies are the same scam anyway, really don't see the need to differentiate this way.
Some of them artificially inflate the cost of hard drives instead of GPUs, totally not the same!
Are storage prices inflated at the moment? How is a physical commodity comparable to a ledger with hashes, ultimately assigned a value purely out of demand, despite being devoid of any actual purpose or usefulness?
Storage prices jumped sharply a few months back due to Chia. They've mostly come back down since then.
I have no idea what the point of your second question is.
I have no idea what the point of your second question is.
There exists a (niche?) area of cryptocoins which are rewards for producing CPU / GPU intensive work - one example is GridCoin but many others are put there once you start searching. The result is there are work farms out there computing data arguably for good reasons (cancer research etc.) but in effect you have the same environmental cost as PoW chain computations as they chase the coin rewards.
> Assuming everyone commenting here has read the post
Proof of stake is mentioned at the end of the article.
> Other mechanism for securing blockchains exist and successfully used (see Proof of Stake). Proof of Work creates external costs (environmental impact, higher electricity prices, GPU scarcity) to benefit a small group of miners.
Proof of stake is mentioned at the end of the article.
> Other mechanism for securing blockchains exist and successfully used (see Proof of Stake). Proof of Work creates external costs (environmental impact, higher electricity prices, GPU scarcity) to benefit a small group of miners.
How beneficial blockchains are is a separate question, but proof-of-work is popular because proof-of-stake has serious issues.
Indeed, I'm aware but felt it would be overkill to mention this when the person clearly didn't even read the whole article.
For people interested, look up the "nothing at stake" issue.
For people interested, look up the "nothing at stake" issue.
And what's to blame for Bitcoin's high price?
A broken fiat monetary system.
I can't believe some people still think that Bitcoin is more speculative than major tech stocks. Facebook, Twitter, Google, Uber, Snapchat... All propped up by money printing. I think if we ran a simulation using hard (non-fiat) money, the net losses of these big tech companies would be even more significant than Bitcoin's losses on electricity. They're only profitable because of the fiat monetary scheme. If you remove the scheme, I think it's likely that revenue would dry up and profits would quickly go negative. These companies are just not viable in a hard money system. More profitable competitors would quickly spring up and there would be constant churn.
The reason why Bitcoin is so successful and anti-fragile is that it's located everywhere. It always has access to the easiest money from all around the world. It has placed itself at the root of every scheme around the world.
I can't believe some people still think that Bitcoin is more speculative than major tech stocks. Facebook, Twitter, Google, Uber, Snapchat... All propped up by money printing. I think if we ran a simulation using hard (non-fiat) money, the net losses of these big tech companies would be even more significant than Bitcoin's losses on electricity. They're only profitable because of the fiat monetary scheme. If you remove the scheme, I think it's likely that revenue would dry up and profits would quickly go negative. These companies are just not viable in a hard money system. More profitable competitors would quickly spring up and there would be constant churn.
The reason why Bitcoin is so successful and anti-fragile is that it's located everywhere. It always has access to the easiest money from all around the world. It has placed itself at the root of every scheme around the world.
Actually what's to blame for Bitcoin's high price is the finite supply of Bitcoin, and the fact that there's wild speculation on its price (which incidentally is what makes it really horrible as a currency, but that's another topic).
And you're mixing up profitability with stock price speculation, which are two very different things - witness the Gamestop incident. Once the stock is sold to the public, its price fluctuations don't actually affect the bottom line of the company unless there's a buyback.
And you're mixing up profitability with stock price speculation, which are two very different things - witness the Gamestop incident. Once the stock is sold to the public, its price fluctuations don't actually affect the bottom line of the company unless there's a buyback.
It wouldn’t matter if Google or Facebook’s profit was denominated in ETC, BTC, or fiat; those companies are massively profitable.
It would matter if all of their customers' earnings were also denominated in BTC. It would dramatically affect their customers' spending habits. For example, while they might be willing to borrow fiat to pay for ads, they might not want to borrow BTC for this same purpose because they know that they may not be able to meet repayments (e.g. BTC's scarcity means that it may not be possible to acquire back that borrowed BTC in the future; cost of BTC is likely to be higher due to the deflationary dynamic). Hard money would affect behavior in profound ways.
What?
One of the hallmarks of a tech company is that the costs associated with producing the product is relatively flat and the revenue from the product goes up linearly with usage. Most tech companies then spend their money on recruiting more engineers, to try to build more products that are cheap to maintain and generate smooth rising revenues. The increased fed spending changes the stock price, but it’s not changing the fundamentals of why selling network access software is so good.
One of the hallmarks of a tech company is that the costs associated with producing the product is relatively flat and the revenue from the product goes up linearly with usage. Most tech companies then spend their money on recruiting more engineers, to try to build more products that are cheap to maintain and generate smooth rising revenues. The increased fed spending changes the stock price, but it’s not changing the fundamentals of why selling network access software is so good.
This post is frankly delusional. You say a bunch of things but have zero explanation for WHY those things might be true. It’s clear at this point that Bitcoin has become an utter failure for almost all the things it was supposed to do, aside from making certain people rich due to speculation.
Yeah, any bank or government can confiscate your BTC as well as preventing transactions and requiring papers to open accounts.
Oh wait
Oh wait
Your answer does not conform to the common model. Let's make it harder to read instead of having a frank discussion.
My problem with it is not the content, it's the totalizing, evangelical approach. In tone it's about a half-step from the goggle-eyed people who want to talk about "international bankers" and how they control everything. I have never had a good conversation with anybody who starts out like that, because they are in the grip of a strongly self-reinforcing worldview.
People often say "follow the money, look at the incentives..." Yet those same people keep neglecting the system which produces the mother of all incentives. It's easy to see how heavily money-oriented the average person is nowadays. IMO, the way the economy works is that we're just like ants following a trail of breadcrumbs and the reserve banks decide which direction to toss all the new breadcrumbs...
And what's to blame for the tulips high price? A broken fiat monetary system.
The reason why tulips are so successful and anti-fragile is that they can be grown everywhere.
By the way, if an activity like mining is only profitable because of money printing (depressing interest rates), given the world has been in zero to negative interest rates, this means the activity is not productive.
The reason why tulips are so successful and anti-fragile is that they can be grown everywhere.
By the way, if an activity like mining is only profitable because of money printing (depressing interest rates), given the world has been in zero to negative interest rates, this means the activity is not productive.
Some people have argued that tulip mania was driven by monetary policy. When discussing supply and demand, it's not only about supply and demand of the goods or services, it's also about supply and demand of the currency which those goods and services trade against. Changes in the supply of a currency can affect prices in unpredictable ways; inflation is not evenly distributed.
https://www.hardwaretimes.com/gpu-mining-farm-w-over-4000-ge...
https://hothardware.com/news/a-look-inside-a-massive-rtx-307...
https://www.tomshardware.com/news/gpu-shortages-worsen-crypt...
And energy prices, of course. More demand = higher prices.
Also keep in mind that cryptocurrencies become harder to mine with time, therefore the pursuit of more powerful hardware and more energy isn't going to stop, therefore there's absolutely no way prices of hardware and energy will return to normal until governments won't stop this nonsense.
Pushing for nuclear or carbon is just hiding the problem under the carpet: we don't need more energy because we already have plenty, but we must stop wasting it, especially in a way that is clearly bringing us to a path in which we will need more and more every year.