How has hardware availability changed the industry?

Cryptocurrency mining has been and continues to be an attractive venture not only for fans of alternative financial instruments, but also for those who are serious about investing.

When deciding to start mining, potential miners consider a number of known factors: equipment and electricity costs, a suitable climate and favorable legislation in the country of residence. At least, that was the case until recently.

In 2022, the situation changed and became more complicated. A few years ago, it was possible to mine cryptocurrencies by buying a graphics processing unit (GPU), reading a guide on how to build a rig, and mining coins easily. Such earnings were attractive to many online entrepreneurs and soon new miners flooded the global market.

But over time, the complexity of mining has increased and has led to the emergence of dedicated crypto mining equipment – ​​ie application-specific integrated circuits (ASICs), which can mine much faster and more efficiently than GPUs. As a result, issues of a different nature have arisen, such as concerns about green energy, qualified personnel and equipment availability.

Related: Turning Fortunes? Specialized GPUs and SSDs help crypto miners

In the summer of 2021, many buyers of GPU cards — the most important part of any farm and rig — sounded the alarm when it became nearly impossible to obtain them. The few latest generation GPU cards available had prices well above what many considered fair value.

Exploding demand for GPUs was further exacerbated by the COVID-19 pandemic — with hunters building and buying PCs to entertain themselves during quarantine — in addition to supply chain disruptions around the world.

Major GPU maker Nvidia tried to curb demand for miners by installing special hardware that would limit hash rates, but miners ultimately won after finding a way around the new features.

At the beginning of 2022, the situation has changed, but not much. At the end of January, the costs of the major cryptocurrencies Bitcoin (BTC) and Ether (ETH) fell to the lowest level since July 2021.

The price drop set off a chain reaction in the GPU market as mining became less and less profitable and was threatened with bans in several jurisdictions around the world.

In January and February, interest in GPU cards designed for cryptocurrency mining waned, along with a decline in mining profitability. Nvidia reported the price of the Sapphire GPro Radeon X080 card, specially designed for mining, fell by almost 40% during this period. At the end of January, the card cost over $1,400 and can now be found for around $860.

Sapphire GPro Radeon X080 card. Source:

The appetite for GPU cards has also been curbed by the impending transition from the Ethereum blockchain to the proof-of-stake protocol, where powerful cards and large computing power are no longer required.

It is worth noting that a price reduction was also observed in the market for “regular” GPU cards – that is, cards with video outputs designed for processing graphics. The price drop for Nvidia and AMD gaming series cards was about the same as for specialized mining solutions.

Several companies such as Ajinomoto Fine-Techno have: reported that a shortage of components for GPUs, including those important for the production of Ajinomoto build-up film substrates, will be significantly reduced by the summer of 2022. Intel also plans to release a line of equipment for mining BTC this year.

The situation with ASICs remains quite stable as BTC miners have no other options when choosing equipment. Popular models for BTC mining include the Antminer S7, Antminer S9, and Antminer D3 from Bitmain.

In addition, representatives of Bitmain announced a new product line with hydrocooling, allowing miners to work all year round regardless of external environmental factors. Nevertheless, the cost of such an ensemble mortal remains extremely high.

Sell ​​and resell

As a more affordable option, miners can purchase used equipment. Unsurprisingly, this method of acquiring equipment became increasingly popular as GPU prices rose, especially during the general decline in income during the OVID-19 pandemic.

Every day more people want to mine cryptocurrencies, and reselling equipment is profitable, especially regarding high-performance GPU cards and ASICs. The other necessary elements for mining, such as motherboards, coolers and more, are still mostly bought in stores because of their relatively reasonable price.

Before buying a product, it is important to study the market in detail to understand who is selling what and at what price. The easiest way to buy from a major online store is to place a wholesale order. A more difficult route, but profitable, is the option of buying directly from the manufacturer.

GPU cards are affordable and versatile in resources when bought in bulk: a high-quality ASIC costs $1,600 and a GPU card costs $200 per unit.

The mining equipment resale market is becoming a popular option both for individual users and businesses.

In November 2021, Compass Mining, a BTC mining service provider, launched a secondary resale market for retail mining customers to sell hardware. The company’s management said miners spend hundreds of millions of dollars each month in the secondary market, indicating high demand.

A month later, digital asset developer and strike firm Foundry Digital launched FoundryX, a new marketplace for buying and selling BTC mining machines. The company received more than 40,000 latest-generation mining machines from MicroBT and Bitmain for immediate delivery before 2022 for the new market.

In addition to being able to move flexibly to places with cheap electricity and friendly crypto regulation, it is also relatively easy for miners to find and set up new equipment.

Even in the context of the global economic crisis, mining is moving in different directions, and the global crypto mining equipment market is expected to expand by 2026. worth $1.2 billion.

Nathaniel Yu, marketing director of Bitmain, told Coin-Crypto that the company has seen an expansion in the market and its commitment to green energy:

“Bitmain continues to see the digital mining industry evolve as new mining operators enter the market. Green mining has experienced significant growth in the past year. The industry can expect more energy suppliers to enter the mining space. In terms of mining hardware, hydro and liquid cooling technologies will play a growing trend. Data center development will continue to use new technologies to ensure longer mining cycles.”

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