AMD Nvidia must do more to stop cryptominers from causing PC gaming card shortages price gouging

AMD's and Nvidia's core gaming customers deserve better.

PC enthusiasts are suffering as digital currency miners drive up graphics card prices and cause big shortages again. The two chipmakers must do more to protect the needs of their most important market or risk building their businesses on cryptocurrency quick sand.

Digital currency miners use graphics cards from AMD and Nvidia to "mine" new coins, which can then be sold or held for future appreciation. Bank of America Merrill Lynch said ethereum is currently one of the popular alternative coins to mine with PC graphics cards.

"We single out ethereum as the overwhelming driving force for GPU demand given its larger size (market cap) and higher mind share relative to other coins," analyst Vivek Arya wrote in a note to clients Thursday.

The price of ethereum cryptocurrency spiked more than 400 percent in the second quarter of 2017, resulting is card shortages during the summer. The digital currency then more than doubled during the last two months last year. It is now up over 8,800 percent over the past 12 months, according to data from industry website CoinMarketCap.

Ethereum one-year chart

Source: CoinMarketCap

Every time cryptocurrency prices have surged higher, it has increased digital currency mining demand for AMD and Nvidia graphics cards.

Computer hardware retailers including Newegg, Best Buy and Amazon are sold out of most AMD RX 570/RX 580 and Nvidia GTX 1070/1080 graphics card models as of midday Monday.

Nowinstock's Nvidia GTX 1080 tracker

Source: Nowinstock.net

When cards do become available, they are often priced by third-party sellers at more than double or even triple Nvidia's and AMD's suggested list prices.

AMD RX 580 third-party seller price chart

Source: CamelCamelCamel

The PC gaming community is flooding social media and Reddit with thousands of angry posts, over the price gouging.

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One industry veteran lamented over the ramifications of consumers not being able to upgrade their gaming PC rigs.

"With availability consumed by the cryptocurrency mining market, there is little chance for any PC gamer to find a graphics card in stock, let along close to the expected price point," Shrout Research's Ryan Shrout wrote in an email. "Because of that, many enthusiasts and DIY builders are putting off system builds and upgrades completely, setting up an unfortunate situation for all other component vendors from processors to motherboards to storage."

Cryptocurrency miner demand is not sustainable or predictable over the long term. These buyers tend to flee as soon as profitability wanes as they do not have any brand loyalty and only care about mining return on investment.

This isn't the first time the digital currency craze has led to dramatic graphic card shortages. It occurred in June of last year and during the bitcoin boom of 2013.

AMD and Nvidia should not take the PC gaming market for granted. Gamers may resort to buying more powerful consoles such as the recently released Xbox One X, simply give up in frustration and move to other entertainment alternatives.

The companies can't risk losing these customers in exchange for short-term oriented, fickle digital currency miners.

Perhaps AMD and Nvidia can work with their retailer partners and limit sales to one or two cards per household. The companies can also incorporate better mining features for their cryptocurrency-specific mining cards or even take the drastic step of altering gaming graphics card firmware to limit mining functionality.

Something must be done.

Nvidia declined to comment for this story.

AMD sent the following statement when asked about the graphics card shortages for PC gamers due to the cryptocurrency mining: