Ethereum and Bitcoin are recovering – which is bad news for gamers

Cheap graphics cards could once again be at risk of inflation as popular cryptocurrencies such as Ethereum and Bitcoin have started to rise in value again rapidly this weekend, following on from the wider cryptomarket crash a few weeks back.

As reported by Coindesk, both Bitcoin and Ethereum have seen their first increase this weekend since June's market crash, with Bitcoin climbing to 5% (though it's worth remembering that said crash wiped 34% off its value) and Ethereum reaching a massive 20% increase in the same period.

While this is great news for anyone who still has investments in any of the currencies bouncing back, this recovery does potentially mean that we could see GPU prices start to soar if cryptomining becomes viable again. Bitcoin is less of an issue in that it's not really possible to effectively mine the coin using a consumer graphics card, but as it's the most valuable and established cryptocurrency on the market, its health does usually have a knock-on effect with other coins.

Ethereum on the other hand is a potential threat to the relatively affordable period we've reached with the GPU market. Despite promises to move over to the same 'proof-of-stake' validation that's used by Bitcoin (a system that uses randomly selected miners to validate transactions), the currency still uses 'proof-of-work' (a competitive validation method that can be exploited by miners).

GPU Shortage 2: Electric Boogaloo

People in NYC camping out in line to get a new graphics card from Best Buy during the height of the shortage. (Image credit: Twitter / Matt Swider)

An easier way to think of it is that proof-of-work allows miners around the world trying to be the first to solve a 'math puzzle', and whoever is the first to do so gets to update the blockchain and is rewarded with a small percentage of crypto. The people with access to hardware with a greater hash rate (a measure of the calculations that can be made per second) are more likely to solve the puzzle first.

These 'puzzles' can be solved on traditional graphics cards as opposed to specialized mining devices known as ASIC miners (application-specific integrated circuit), though ASICs do tend to provide much better hash rates - for a price. As such, ASIC miners were typically only used with Bitcoin since it moved to proof-of-stake, but if Ethereum can still be effectively mined on consumer graphics cards then PC gamers aren't out of the woods yet.

There's no guarantee that history could repeat itself, but with the price of popular graphics cards having stabilized after a turbulent two years, the low prices could entice miners to jump back into Ethereum mining while GPU prices are low and the currency is still viable to mine on them, and that's not even including the many other smaller currencies that also still use proof-of-work validation.

This is especially disheartening as both AMD's RDNA3 cards and Nvidia's Lovelace series are expected to launch later this year, which could see gamers once again scrambling to buy themselves a shiny new RTX 4080 before they're snapped up en mass by scalpers and miners. In the words of Taylor Swift: I think I've seen this film before, and I didn't like the ending.

Should you buy now, or wait for next-gen?

These rare Gundam themed RTX 3080 GPUs were seen being built into a mining rig rather than in the hands of fans and gamers. (Image credit: I_Leak_VN)

12-18 months ago when I was reporting on the rising cost of recently released GPUs such as the Nvidia GeForce RTX 3080, prices had risen to almost 3x the MSRP for some of AMD and Nvidia’s most popular next-gen offerings, which made the cards impossible to find in stock and wildly unaffordable for most. Some of the blame was placed on crypto miners, from small-scale operations to huge industrial farms, as they had the buying power to snap up all available stock from online stores using bots.

If you need an idea of the sheer scale of how bad this could be, it was revealed a few weeks ago that Ethereum miners spent $15 billion on GPUs in the last two years, and that doesn't even include other parts required to build a mining rig - it's just graphics cards. 

While all this is scary for PC gamers and it certainly helps to be prepared, remember - it's not guaranteed. We're seeing signs that history has the potential to repeat itself but that doesn't mean it will, and there are plenty of things that could happen between now and the launch of next-gen graphics cards. Should ETH finally move over to proof-of-stake, one of the largest issues will be solved off the bat for example.

If you have your heart set on snapping up an RTX 4060 at launch then keep your eyes peeled on the current market prices, but for those who have the cash now, please don't overlook the potential of current-gen cards. There are plenty of deals available now on Radeon RX 6800 XT and GeForce RTX 3080 GPUs, and many of the current-gen offerings will still be a fantastic buy for a few years to come and we can at least enjoy some discounted graphics cards before all hell potential breaks lose again.

Via Tom's Hardware