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>therefore there's absolutely no way prices of hardware and energy will return to normal until governments won't stop this nonsense. For all its faults, the ma

>therefore there's absolutely no way prices of hardware and energy will return to normal until governments won't stop this nonsense. For all its faults, the market is great at solving these problems. Though I suppose it depends on what you mean by "normal".

kelseyfrog 5y ago
The problem is that miners are buying GPUs. Without denying the problem, how can the market fix this?
- jefftk 5y ago
  Historically, for many products, high demand leads to lower unit prices as manufacturers become more efficient. Since we're a decade into GPU mining, there's been a lot of time for manufacturers to adjust. While so far they have not been able to keep up with demand, I don't think it's clear that they never will.
  - kelseyfrog 5y ago
    Sorry, not following. Can you explain how efficiencies in GPU production interact with network difficulty to produce lower GPU prices? I'm not finding much in the literature.
    - jefftk 5y ago
      What makes hash-based proof of work function is that to produce some number of hashes you need to use some amount of real-world resources. In practice, the two main resource inputs are electricity and computational hardware. If hardware is scarce, as it is now, the hardware will be a large proportion of mining cost, while the more efficiently hardware can be produced, the more of the cost is electricity.
      - kelseyfrog 5y ago
        How does that make miners not buy GPUs?
- chii 5y ago
  GPUs are manufacturable. The market is meant to signal to manufacturers that this is profitable to make more of, and thus, more would become available in the future. Unfortunately, the current world events conspired to not allow this balance to happen - chip shortages and logistics problems etc. Give it a few more years, and it will balance back out.
  - jokethrowaway 5y ago
    There is not enough competition, people got conditioned to high prices for 10 years - once prices are raised they are not coming back. Good luck starting your GPU company
    - roenxi 5y ago
      > Good luck starting your GPU company There is a chance you may mean that sarcastically, so... Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory. Mass produce 5-10 year old tech in bulk, soak up enough of the market to survive and move as quickly as possible into modern manufacturing techniques. We've seen in the last number of years that investors/lenders are perfectly happy to take multi-billion dollar losses of multiple years while chasing a market. It'd work fine.
      - chii 5y ago
        > Mass produce 5-10 year old tech in bulk I really wonder if the tech/equipment to do this is actually also unavailable - preventing any competition from starting up. I think it's the same logistical bottleneck that is hitting everything, not some monopoly conspiracy, and if that's the case, by the time bottlenecks clear up, the demand for such items would also drop (as the higher end stuff becomes available again).
      - BoiledCabbage 5y ago
        > Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory. So then as PoW difficulty increases, demand for GPS increases. Necessitating more factories until the primary output of world industry is GPU factories. Does nobody see how absurd this is? The market is stuck in a feedback loop. People are naievely looking at this and saying "Aha, just follow the rules of capitalism and the market and it will work out well. That's the religion." Not seeing this is a spiral. There is no market solution here. It's like we're looking at a while loop, with condition "true == true", the body of the loop doubles the length of a string each time. Somewhere here is saying, this will not end well, we're gonna use up all of our heap trying to double the string size. And somebody else's solution is, "close some running programs so that ram can be allocated to the string doubling program". Ok yah, we can run a bit longer, but the end result is still 70%+ of RAM being used to allocated these strings and eventually program crash. Building more GPU factories isn't a solution is crypto's exponential consumption of resources.
- 300bps 5y ago
  LHR was one attempt at it with varying success. And it won’t take a few years to balance out. If ETH really does go PoS in the next six months then you’ll see a lot of RTX 3080 and 3090 come on the market for very cheap. A lot of ETH miners say they’ll go to RVN or others but there is no way other coins can take the hash rate currently devoted to ETH.
- squarefoot 5y ago
  > The problem is that miners are buying GPUs. That's not a real problem, I can stop buying GPUs and keep playing most 3-5 years old games with a decent integrated one in a relatively modern CPU at a fraction of the price, and that's it. I'm not a gamer however, so I would understand hardcore gamers to be pissed off, but that's not a real problem as nothing vital is taken away from anyone. The real problem is the steadily raising demand in energy which doesn't seem to stop anywhere in the future. If we accept the fact that more energy translates into more money, and that more money allows miners to add more and more GPUs (or ASIC dedicated hardware, energy-wise, a cluster of GPUs and a box that draws 3000 watts are exactly the same thing) then we're going straight to a future in which every resource will be used to produce energy. How to stop something that screams "put more energy in = get more money out"? No way, it's probably too late, and I expect a huge misinformation campaign from the parties involved, which already amassed a lot of money to pay for it. Therefore we'll see a stronger push for nuclear and other non clean sources, but also soaring prices of every other source, including clean ones, because the demand dictates the price, and there is where most demand is coming from. And there's also the warming problem, because you know, consuming so much energy doesn't come without a price to pay.

kelseyfrog 5y ago

The problem is that miners are buying GPUs. Without denying the problem, how can the market fix this?

jefftk 5y ago
Historically, for many products, high demand leads to lower unit prices as manufacturers become more efficient. Since we're a decade into GPU mining, there's been a lot of time for manufacturers to adjust. While so far they have not been able to keep up with demand, I don't think it's clear that they never will.
- kelseyfrog 5y ago
  Sorry, not following. Can you explain how efficiencies in GPU production interact with network difficulty to produce lower GPU prices? I'm not finding much in the literature.
  - jefftk 5y ago
    What makes hash-based proof of work function is that to produce some number of hashes you need to use some amount of real-world resources. In practice, the two main resource inputs are electricity and computational hardware. If hardware is scarce, as it is now, the hardware will be a large proportion of mining cost, while the more efficiently hardware can be produced, the more of the cost is electricity.
    - kelseyfrog 5y ago
      How does that make miners not buy GPUs?
chii 5y ago
GPUs are manufacturable. The market is meant to signal to manufacturers that this is profitable to make more of, and thus, more would become available in the future. Unfortunately, the current world events conspired to not allow this balance to happen - chip shortages and logistics problems etc. Give it a few more years, and it will balance back out.
- jokethrowaway 5y ago
  There is not enough competition, people got conditioned to high prices for 10 years - once prices are raised they are not coming back. Good luck starting your GPU company
  - roenxi 5y ago
    > Good luck starting your GPU company There is a chance you may mean that sarcastically, so... Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory. Mass produce 5-10 year old tech in bulk, soak up enough of the market to survive and move as quickly as possible into modern manufacturing techniques. We've seen in the last number of years that investors/lenders are perfectly happy to take multi-billion dollar losses of multiple years while chasing a market. It'd work fine.
    - chii 5y ago
      > Mass produce 5-10 year old tech in bulk I really wonder if the tech/equipment to do this is actually also unavailable - preventing any competition from starting up. I think it's the same logistical bottleneck that is hitting everything, not some monopoly conspiracy, and if that's the case, by the time bottlenecks clear up, the demand for such items would also drop (as the higher end stuff becomes available again).
    - BoiledCabbage 5y ago
      > Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory. So then as PoW difficulty increases, demand for GPS increases. Necessitating more factories until the primary output of world industry is GPU factories. Does nobody see how absurd this is? The market is stuck in a feedback loop. People are naievely looking at this and saying "Aha, just follow the rules of capitalism and the market and it will work out well. That's the religion." Not seeing this is a spiral. There is no market solution here. It's like we're looking at a while loop, with condition "true == true", the body of the loop doubles the length of a string each time. Somewhere here is saying, this will not end well, we're gonna use up all of our heap trying to double the string size. And somebody else's solution is, "close some running programs so that ram can be allocated to the string doubling program". Ok yah, we can run a bit longer, but the end result is still 70%+ of RAM being used to allocated these strings and eventually program crash. Building more GPU factories isn't a solution is crypto's exponential consumption of resources.
300bps 5y ago
LHR was one attempt at it with varying success. And it won’t take a few years to balance out. If ETH really does go PoS in the next six months then you’ll see a lot of RTX 3080 and 3090 come on the market for very cheap. A lot of ETH miners say they’ll go to RVN or others but there is no way other coins can take the hash rate currently devoted to ETH.
squarefoot 5y ago
> The problem is that miners are buying GPUs. That's not a real problem, I can stop buying GPUs and keep playing most 3-5 years old games with a decent integrated one in a relatively modern CPU at a fraction of the price, and that's it. I'm not a gamer however, so I would understand hardcore gamers to be pissed off, but that's not a real problem as nothing vital is taken away from anyone. The real problem is the steadily raising demand in energy which doesn't seem to stop anywhere in the future. If we accept the fact that more energy translates into more money, and that more money allows miners to add more and more GPUs (or ASIC dedicated hardware, energy-wise, a cluster of GPUs and a box that draws 3000 watts are exactly the same thing) then we're going straight to a future in which every resource will be used to produce energy. How to stop something that screams "put more energy in = get more money out"? No way, it's probably too late, and I expect a huge misinformation campaign from the parties involved, which already amassed a lot of money to pay for it. Therefore we'll see a stronger push for nuclear and other non clean sources, but also soaring prices of every other source, including clean ones, because the demand dictates the price, and there is where most demand is coming from. And there's also the warming problem, because you know, consuming so much energy doesn't come without a price to pay.