Bitcoin’s high price is causing GPU shortages in Russia. Customers are buying 600 Graphics Cards at a time in order to mine cryptocurrency in exchange for Bitcoin.
Market Demand Outstripping Supply
Russia is the latest country to hit the headlines with news of its shortage of GPUs driving prices of the cards up by 80%. Moscow-based IT distributor Treolan commented on the shortage, saying:
Over the past two months, video card shipments have tripled, Market demand exceeds supply.
Confidence and investment in Bitcoin appear promising from this news, as state of the art graphics cards are not cheap with prices of $300 and above for the best ones. The electricity costs can also be significant.
Mining rigs easily run over 1000 watts for anything greater than the most basic of setups. While it is true that other altcoins, or alternative cryptocurrencies, are being mined, most of them will ultimately be exchanged for Bitcoin.
It is a quick turnaround business too, as coins are rarely kept, but rather exchanged for Bitcoin and sold for local currency. The GPUs can then be sold off or turned off when they are no longer profitable to run.
Regular Computer Users Outraged
https://twitter.com/2AArmament/status/874316040733372416
Posts such as this are rampant on Twitter, with users exasperated that they just cannot purchase graphics cards. They are selling out as soon as shops restock. Echoing the frustrations of many, one angry user on an MMO forum recounts a fruitless attempt to purchase one:
So then I take a trip to Best Buy where an employee informs me it’s sold out of every Best Buy in the state… Within 15 minutes of release.
It is quite an angry backlash that is not doing any favors for cryptocurrency’s reputation among a youthful demographic that is set to benefit most from this emerging technology.
Pooling Resources and the risk to Decentralization
Russia mines around 5-7 percent of the world’s cryptocurrency coins, according to mining business owner Dmitry Marinichev. Cryptocurrency miners generally form collectives to increase and share profits. These collectives, or mining pools, around the world control much of the Blockchain traffic.
Mining pools are controversial in that by controlling too much of the network a pool could theoretically launch a 52% attack on the Bitcoin network which could potentially be used to spoof payments. They certainly pose a risk to what was initially conceived as a decentralized network of miners maintaining the network with no overall controlling body.
Is it really worth it to continue mining coins with GPU’s or would it be more cost effective to simply invest in the coins? Let us know in the comments below.
Images courtesy of Wikimedia, AMD, Shutterstock