If you logged onto Amazon or Newegg recently to buy an AMD RX card you will have had a rude awakening. All AMD cards base on the Polaris architecture (RX460, 470, 480 or 560, 570, 580) are currently sold out worldwide. Even if you found one in stock the asking price would be up to $400 USD despite these cards clocking consistently slower than their cheaper NVIDIA competitors. Why the hell would anyone expect more money for a slower card you might ask? Ethereum is the Answer.
What the Hell is Ethereum?
Most of you have probably not heard of Ethereum, but you will have heard of it’s more popular cousin, Bitcoin. The more technological readers may also have heard of Bitcoin Mining, but that’s about as far as most people’s knowledge goes. Personally, I had only heard the term in passing until recently and it took quite a bit of research to properly understand what’s going on. So to clear things up we first need to explain Bitcoin Mining.
How does Bitcoin Mining work?
Disclaimer: Cryptocurrency is a very complicated and obscure subject, some of you know a lot about it, but most do not. For the sake of sanity and boredom, we are going to keep things short. This may mean some of the following information is not “technically correct”. If you are one of the people who do fully understand this subject, congratulations, pat yourself on the back. However, teaching the entire VR community how this works is not the purpose of this article, so things will get a little simple here. This might make you angry, but try to remember, you are much smarter than us, and then try to remember, we don’t care.
Bitcoin and Ethereum, among others, are forms of Cryptocurrency.Cryptocurrency, in short, is a form of money that was designed, and created, to be independent from all governments and other forms of currency. Obviously this presents a few problems, mostly relating to security and consistency. To solve these issues, Bitcoin, and it’s followers, were programmed in such a way that their value would be intrinsically tied to something that could(theoretically) not be controlled by any external force; processing power.
The only way to create new Bitcoins, is for smart nerdy types to hack together specialized computers that spend every minute of every hour of every day, double checking the entire Bitcoin network. These specialized computers constantly attempt to calculate a special number know as a “block”. This number, if calculated properly, validates every single transaction on the Bitcoin network, while also proving to every other system on the network that it is legitimate. If a system (or Bitcoin Mining Machine) is successful in creating one of these magical “block” numbers, it is rewarded with a small sum of Bitcoins.
Normally things cruise along nicely. Nerds make machines, the machines strengthen the Bitcoin network, and the machines are in turn rewarded with Bitcoins. Sometimes the system speeds up or slows down for various reasons. Maybe there are more nerds adding more machines to the network, or sometimes the difficulty of creating a new magic block number increases because of complicated programming reasons. To make sure new blocks are created as a consistent pace, the network adjusts the difficulty of creating new blocks to keep it at around one every 10 minutes.
How Does This Affect GPU Prices?
The general idea with mining is that you can only JUST manage to make a profit depending on what hardware you have and how much you’re paying for electricity. So the only way to make a profit is with specialized mining hardware. Or at least that was the case, until now. All of sudden it was discovered that a particular currency know as Ethereum, which is resistant to conventional mining machines, is VERY profitable when mined using GPUs, particularly with certain AMD cards based on the Polaris architecture, namely the RX 470, 480, 570 and 580.
Almost overnight the nerds started buying up these cards like hotcakes. A smart investor could expect to make his money back within 2 months, and everything after that is pure profit. Suppliers caught wind and started jacking the prices, suddenly an RX 480 was costing as much as a GTX 1070, despite having lower performance than even the slower 1060. Even that these higher prices, the global supply has been completely depleted, don’t expect to get your hand on a 480/580 until August at the earliest.
Should I Sell my AMD GPU?
If you currently own an AMD Polaris card, our suggestion is get it on eBay right now. Prices are reaching as high as $600 USD. If you bought your card before the current mining craze, chances are you paid less than $300. In terms of raw graphics performance these cards have been falling behind the much cheaper priced NVIDIA 1060. So this may be the perfect time for a quick upgrade of you VR rig. Dump that 480 on eBay ASAP and pick up a 1060 or even a 1070 for the same or possibly less than what you get out of your 480. Be forewarned though, more recently the price of NVIDIA cards has also been on the rise due to the craze, so you might have to scrounge around or wait a while to get a good deal on your replacement GPU.
Couldn’t I Just Start Mining Myself?
Yes, but in short, don’t. Mining is complicated and profits, even in times like this, are on a knife edge. If you pay too much for your power, you may never make a profit. Additionally, because of the way mining works, time is of the essence, and by the time you read this it’s probably already too late. The more processing power that enters the network, the quicker the profits will drop. It’s even likely that the people paying $600 on eBay will never see a return on their investment.
If you plan to keep your card for actual gaming it’s important to note that mining is basically the same as stress testing… 24 hours a day… for weeks at a time. This can significantly shorten the life of your GPU and for this reason most people refuse to buy a second hand card that has been used for mining.
One last silver lining to this situation is that in 3-4 months time, the market should become flooded with cheap cards. Obviously, many of these cards will have a lot of wear and tear but with any luck the overall effect will drop the price of brand new cards. So, it may be best to just batten down the hatches until this madness passes, and pick up a good deal closer to the holiday season. Happy hunting 😉