Why Is Cryptocurrency Mining Saturating The GPU Market?

Why Is Cryptocurrency Mining Saturating The GPU Market

Due to the growing difficulty when mining, cryptocurrency mining farms have to renew their fleets of graphics cards. Not only due to wear but also due to the fact that the new architectures are more energy efficient than the previous ones, reducing costs when executing the mining algorithms.

In any case, the increase in the cost of mining must be differentiated from the demand in price of the different cryptocurrencies in the market, which does not start exclusively from costs but also from supply and demand.

GPU Architecture Is Ideal For Mining

When cryptocurrency mining began at the end of the 2000s, it was not using graphics cards but conventional CPUs. However, the increased difficulty meant that the execution capacity of the CPUs more thought for the execution of the serial code began to make them the less suitable hardware for mining.

GPUs have the ability to compute thousands of data in parallel, thanks to their extensive SIMD units in combination with their dozens of shader units. So not only can they be mining different parts of the blockchain of each cryptocurrency in parallel, but they can also apply different algorithms and parts collaboratively.

The algorithms are applied through Compute Shader programs, which are shader programs that do not run in the 3D pipeline used to render graphics, and are rather used in other fields. In which the enormous power of the GPU is used to solve data problems in parallel. And one of these fields is cryptocurrency mining.

GPUs Are Cheaper To Scale Than A CPU

Having a CPU with a large number of cores that is designed to work in tandem and without associated latencies can cost us a high price, since for them server CPUs are necessary with the high cost that this entails. On the other hand, graphics cards, although when rendering they cannot work in parallel, they can do so in other applications and this allows to build many GPUs working in parallel at the cost of a CPU for servers .

A mining farm can take several high-end GPU graphics cards for mining, but also mid-range and low-end GPUs, and combine them together in parallel for great decoding performance. That is why not only high-end graphics cards are sought after by miners, but the rest of the ranges.

Are We Going To See A Third Mining Bubble?

We cannot say for sure, but cryptocurrencies with longer life than Ethereum have left the GPUs to be based on ASICs, fixed function units or accelerators that are designed for a single type of cryptocurrency and algorithm that lose flexibility in exchange for increasing a lot. in efficiency with respect to energy consumption and cost. So the cryptocurrency mining reached a point where it will leave the conventional GPUs as in their day they stopped using the CPUs.

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