Are cryptocurrencies to blame for high GPU prices?
blog.libove.org
blog.libove.org
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.
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.
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.
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.
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.
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.
They are currently working on merging the v1 and v2 chains.
tbh though very seriously likely this year, all the major infrastructure is in place
Until it’s actually released, skepticism’s the safest bet.
What do prediction markets say about whether it will be out by what times?
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.
So it's been 7 years since announcement.
1: https://coinmarketcap.com/view/pos/
Edit: Also I should highlight I'm not arguing to shift away from PoW where it makes sense.
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.
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.
For all its faults, the market is great at solving these problems. Though I suppose it depends on what you mean by "normal".
Give it a few more years, and it will balance back out.
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.
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.
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).
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.
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).
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.
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.
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.
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)
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
1: https://medium.datadriveninvestor.com/itcoin-unhackable-it-h...
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.
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.
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.
"Clue" and "holding coin" have not so much overlap.
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?
[0]: https://www.crowdstrike.com/cybersecurity-101/ransomware/his...
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
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.
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.
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.
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.
"A GPU attack on BTC" Jésus help us
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?
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.
Nvidia wouldn't do this because it might hurt GPU sales.
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?
What if you are a drug dealer or dictator?
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?
Assuming this was even possible, your plan has a fatal flaw.
Who the heck is going to buy the BTC back?
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 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).
That’s at least six months off and has already been delayed repeatedly.
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.
For real though, cut that out.
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.
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"?
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.
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.
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.
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.
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
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.
> 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.
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.
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.
As you know it is still a valid point.
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.
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.
Its like the Oak Island treasure. If they ever actually dig something up, it'll kill the tourist revenue.
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.
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 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.
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.
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.
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?
Couple that with us going into 2 years of global lockdowns and subsequent supply disruptions have probably exacerbated the situation greatly.
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.
At the minimum ban regulated institutions from dealing in it.
Problem is too many people are already heavily invested in the pyramid scheme.
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.
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.
Don’t look for a zebra when all you have is a horse.
> 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.
https://www.pcgamer.com/why-you-still-cant-buy-a-graphics-ca...
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).
Blame whomever you wish.
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.
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.
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.
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.
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.
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?
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.
It’s a profitable activity. There’s a difference there.
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?'
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?
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.
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/
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 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.
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.
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.
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.
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.