Ethereum’s long-awaited transition to a proof-of-stake (PoS) consensus mechanism kicked off on Sept. 15, thus lastly placing its long-standing transaction woes within the rearview mirror. Up to now, the community is now able to processing wherever between 20,000 to 100,000 transactions per second (TPS) versus its earlier fee of simply 30 TPS.
Moreover, the Merge additionally noticed the Ethereum community change into as much as 99.9% extra power environment friendly as in comparison with its earlier iteration, thus allaying fears of its extreme power consumption, a criticism that also lingers fairly closely in relation to Bitcoin (BTC).
Amid these developments, nonetheless, a query has continued to pique the curiosity of many crypto fans: “What occurs to the graphics processing unit market now that the transition has concluded?”
It’s price noting that following the Merge, the blockchain transitioned from its energy-intensive proof-of-work (PoW) mechanism to a PoS framework. Because of this, miners that used to course of transactions and produce blocks have been changed by ecosystem contributors who can now stake their Ether (ETH) holdings to change into community validators. Because of this, Ethereum-centric graphics processing unit (GPU) mining has been fully eradicated from the image.
The numbers don’t lie
After the conclusion of the improve, the worth of quite a few sought-after GPUs has dropped fairly drastically. For instance, studies indicate that the worth of Nvidia’s extremely well-liked RTX 3080 has dipped from $1,118 to roughly $700 (during the last three-month stretch) inside China. Equally, the worth of GPUs manufactured by companies like MSI has dropped by $280 since late July.
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To get a greater concept of whether or not these worth drops may have been influenced by the hype surrounding the Ethereum Merge, Cointelegraph reached out to Crypto White, the pseudonymous chief technical officer for ZK.Work — a mining platform for zero-knowledge proofs. He identified that earlier than the Merge, Ethereum had a complete of 860 terrahashes per second of hashing energy, of which lower than 200 TH/s went to Ethereum Traditional and ETHW, a PoW fork of Ethereum that went dwell after the improve, alongside different mining initiatives, whereas 660 TH/s was shut down quickly.
Alluding to Ethereum Traditional’s above-shown hash fee chart, White famous that the incoming hashing energy appears to have been exiting the community step by step since mid-September — i.e., the time of the Merge. On this regard, it’s speculated that the worth of Ethereum Traditional (ETC) didn’t rise as anticipated, with the inflow of this computing energy main a number of miners to close down their operations completely. White added:
“This exhibits that the cryptocurrency mining market has an enormous variety of idle GPUs and the income from conventional mining can’t help their operating prices, so they’re shutting down and dealing with the selection of ready for brand spanking new mining alternatives or promoting them second-hand.”
He additional claimed that many used NVIDIA 30 sequence GPUs have not too long ago entered the secondary marketplace for sale, reducing the worth of GPUs much more. Nevertheless, as probably profitable minable cash proceed to enter the market within the close to time period, White believes that these GPUs could as soon as once more discover utility.
What lies forward for the GPU market?
As is obvious by now, the Ethereum Merge has served as a serious technical and industrial improve for the cryptocurrency mining sector as a complete. Offering his tackle the matter, Ilman Shazhaev, founder and CEO of blockchain gaming metaverse Farcana, advised Cointelegraph that regardless of this obvious setback, the GPU trade is now an evergreen area of interest, particularly with the continued emergence of various PoW protocols with every passing day:
“Regardless of the transition, there isn’t any discount within the variety of protocols that wants GPUs, and this can assist maintain the demand for these units within the close to future. Additionally, with the gradual embrace of metaverse-centric improvements, the demand for GPUs, that are a key element of most gaming consoles, will likely be sustained.”
In White’s opinion, GPUs is not going to change into less expensive anytime quickly, with their costs almost certainly having stabilized round their present charges. In truth, he believes that the worth adjustments we’re witnessing now had “already been factored” in earlier than the Merge, including that to construct momentum for the launch of their upcoming GPUs, producers like Nvidia had already began clearing out their inventories someday in the past. He stated:
“I consider the worth of used GPUs will slowly decline, and low-end GPUs will in all probability go extinct from the market altogether. Then again, I consider demand for high-end GPUs will enhance.”
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Lastly, it must be famous that in a situation the place there aren’t any tokens to mine, it stands to cause that GPU prediction charges may also be affected, with most producers almost certainly reverting again to their “order-based manufacturing” processes because the mining growth of the previous couple of years had led to huge stockpiling.
ETH worth motion lackluster regardless of effectivity enhance
As famous beforehand, with the conclusion of the Merge, Ethereum’s power consumption has gone down by a staggering 99.9%, leading to a 0.2% discount in world energy consumption. Regardless of these vital developments, nonetheless, ETH’s worth motion has been extraordinarily poor, virtually sudden within the eyes of many.
As could be seen from the chart above, since Sept. 16, the altcoin has slipped from $1,630 to its present worth level of $1,330, showcasing a lack of roughly 22%. On this regard, consultants consider that this lack of constructive worth momentum might be resulting from upward actions having already been priced into the forex’s worth a few weeks earlier than the improve.
Thus, despite the fact that the Ethereum community has gotten rid of GPU mining fully, some sections of miners should try to preserve their cash-cow operating, as is made evident by the truth that a number of proposals to repeat the Ethereum blockchain, equivalent to ETHW — whereas retaining mining capabilities — have gained some traction. That being stated, whereas it’s fairly straightforward to develop such a token, this can be very arduous to persuade individuals to make use of it. Due to this fact, will probably be attention-grabbing to see how the way forward for Ethereum’s numerous PoW arduous forks and the GPU market continues to unfold from right here on out.