The Nvidia 2080 Will Not Kill The GPU Market Here's Why

Shutterstock

When you set out to mine cryptocurrency you are presented with two choices: Buy a GPU (graphic processing unit) or buy an ASIC (application-specific integrated circuit).

I think An ASIC is a terrible computing device, period. While it might be great for mining coins, at some point it has a list of downsides that make it probably the nastiest piece of technology ever created outside of the military.

Here is a list of negatives:

It throws off more heat than a fan heater.
It gobbles insane amounts of energy, which can make the device unprofitable fast.
It makes incredibly large amounts of noise, to such an extent it can damage your hearing. It is not an understatement to say even one ASIC makes it sound like you have a small jet plane in the room.
It can only do one job--mine a specific coin with a specific algo.
It costs a lot but loses its value in weeks.
It is supplied only when it’s worth less to the manufacture to use than it can be sold for, which is often above its potential earning capability.
You can wake up tomorrow and it is worthless.

... There’s more but you get the point.

On the other hand, a GPU is hot but not furnace hot, eats around 25% the energy of an ASIC, is noisy but won’t earn you a restraining order from neighbors and retains value because gamers like them.

The current top GPU for commercial mining is the 1080 Ti. It is the best bang for buck you can get to mine altcoin cryptos. There are more powerful ones like the Titan V, but at 30%-50% more power you are spending anywhere between 3-5 times the money.

The calculation is how much coin you can mine at the cost of repaying the capital outlay and the running costs. Running costs on GPUs can be much lower than ASIC so it comes down to the cost of repaying the capital outlay of the hardware.

A few months ago you could get $3-$5 a day from a 1080 Ti but with the collapse in value of most altcoins that is down to $1 a day. As such, a 1080 Ti pays back in a just shy of two years these days. It was paying back in four months last year but as the price has fallen and the number of machines mining has increased, the payback time has ballooned.

The major worry for miners is that their equipment will be made obsolete by new equipment. An ASIC can blow GPU miners out of the water if one suddenly appears on the scene for a coin that has up to that point been unminable by an ASIC. This recently happened to monero, which luckily for the GPU and CPU miners forked to a new standard they could change to while ‘bricking’ the ASIC unable to make the change.

The new Nvidia 2080 is--or perhaps better stated 'was'--such a threat. A new generation of GPU that was several times more powerful than the 1080 Ti would quickly obsolete it as a miner but as it turns out the new hardware is unlikely to produce more than 30%-50% more coins per day and as such will only relegate the 1080 Ti by a third or less.

The cost of the new card is in line with the old 1080 range and likely to be at a premium; this will leave the 1080 Ti with a long mining life ahead of it, especially if altcoin prices turn around.

The new 2080 range will develop over time but could take at least a couple of years to push the 1080 Ti into retirement, which is good news for the miners who have invested in rigs, many of which will still have some time to go to get their investment back on the $1,000-plus per machine they paid at the height of the market earlier this year.

While the mining boom for AMD and Nvidia may be over, this windfall will return when crypto makes its comeback.

Disclosure: I own shares of Advanced Micro Devices.

-----

Clem Chambers is the CEO of private investors Web site ADVFN.com and author of Be Rich, The Game in Wall Street and Trading Cryptocurrencies: A Beginner’s Guide.

Let's block ads! (Why?)

Read More The Nvidia 2080 Will Not Kill The GPU Market, Here's Why : https://ift.tt/2N5CfnB

Let's block ads! (Why?)