The End of Mining

How the collapse of cryptocurrencies brought video cards back to the world How did the demand for video cards spiral, and will price return to normal?

People have never invested so much money in cryptocurrencies as in the last two years. Media hype, low lending rates, and a large number of speculators have driven the prices of virtual currencies to unprecedented heights. At one point, the situation began to resemble a gold rush. Gamers and designers were left without GPUs because the equipment they needed was instantly redeemed for mining digital coins. However, the holiday on crypto exchanges is coming to an end. The value of Bitcoin has fallen by 58% since the beginning of 2022, and the world has begun a discussion about regulating cryptocurrencies. In addition, electricity bills for mining have increased significantly.

Why was there a shortage of video cards? 

In 2010, few people took cryptocurrencies seriously. However, some people called “crypto” the new gold. To mine it, you needed to have a powerful computer. The process of mining cryptocurrency is called mining: the computer calculates complex algorithms and, as a reward, receives a certain amount of cryptocurrency that can be sold.

The world’s demand for alternative payment systems is significant, especially if the state does not control them. The idea of digital currency has always been popular, so the Bitcoin rate has constantly been growing. Over time, other cryptocurrencies, the so-called altcoins, appeared: Tether, Ethereum, and Litecoin. Each of them has its technical features and rate. If we compare cryptocurrency with precious metals, then in 2020, there was a gold rush. What caused it?

Due to lower interest rates on loans, traders actively used leverage to invest, further inflating the bubble on crypto exchanges. Large funds began to join this wave, seeking to buy cryptocurrency to sell it at a higher price. From January 2020 to January 2022, the price of Bitcoin rose from 7.3 thousand to 41.6 thousand, and at its peak in November 2021, it exceeded 64 thousand. Due to this, Western media called Bitcoin “the best asset in the last decade”. The average annual return on Bitcoin was 230%, ten times higher than investments in the Nasdaq 100 index, which forms a hundred American technology companies. Bitcoin’s capitalization at its peak reached 1.2 trillion – more than Tesla’s.

Miners from all over the world bought video cards and expanded their crypto farms. The amount of capacity involved in cryptocurrency mining is measured through hash rate (the total capacity of computers involved in mining). So: The bitcoin hash rate doubled from 2020 to 2022. Speculators also formed the demand for video cards. They bought the equipment as soon as the product appeared in stores and sold it to miners several times more expensive. Miners bought video cards at any price because they still received super profits. Meanwhile, gamers and graphic designers for whom the video cards were created could not buy them. And how to earn a new card is mobilne kasyno They had to buy old models, which also gradually increased.

The video card market is stabilizing. 

In 2022, the global economy began to slow down, and the central banks of developed countries began to raise interest rates. Investors reacted to this by selling off risky assets. Cryptocurrencies are bought chiefly for resale at a higher price rather than for their intended use. Their further growth was in question, so investors began reducing their portfolios’ shares. The sale provoked a drop in the cryptocurrency rate. Moreover, due to their speculative nature, assets in the “crypto,” are sensitive to information stimuli, and there have been many of them since 2021. Governments of advanced countries have begun to take steps to regulate cryptocurrencies. In China, where there were the most mining farms, operations with cryptocurrencies were banned. The discussion on the regulation of crypto assets continues in the United States.

At the same time, the world began to discuss the environmental impact of mining. Thus, one study compares the damage to the climate from Bitcoin mining with oil refining. First, cryptocurrencies are getting cheaper. Since the beginning of the year, the Bitcoin rate has fallen by 58%. If you crush bitcoin, you try your luck with zdrapki internetowe. Secondly, electricity bills are growing worldwide, accounting for 90% of miners’ expenses. Thirdly, a year ago, on the wave of high prices, miners used a record number of equipment for cryptocurrency mining.

The last chord was the recent update of the Ethereum cryptocurrency, which is the second largest in terms of capitalization after Bitcoin. After the changes in the architecture of this currency, video cards became unnecessary for mining. New coins will now be issued using a different system, without computers solving complex algorithms.

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