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Used GPUs flood the market as Ethereum's price drops below $150

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Re: Used GPUs flood the market as Ethereum's price drops below $150

#21

Post by benchaney »

vortico wrote: post #17

Sorry if this is a dumb question, but does a single party control the difficulty level of Ethereum and Bitcoin? If so, it seems like they have massive control over the market. If not, how does it work?

The target amount of time per block was set as a global constant (1 block every 10 minutes for bitcoin, 1 block every 15 seconds for ethereum). At fixed intervals, the difficulty is adjusted based on the actual rate of mining. The computation is deterministic, and agreed upon using the standard consensus mechanism. No individual controls it.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#22

Post by DanBlake »

pfooti wrote: post #14
DanBlake wrote: post #7

Just took a quick look at this. If you are located in the 'mining valley' of Washington where power is ~2c/kwh you are still getting healthy profits. A computer with 7 GTX 1070 graphics cards should produce ~230 mh/s and draw 1 kw. This would cost approximately $30/month in power factoring in kw demand + cooling. The above setup will currently generate $385/month in ETH. So basically for miners who are in the right s…

But that's 385 / month revenue? On a setup that's what, $3400 to buy, for seven 1070s? Seems like asking for 10 months to cover capex is a bit thin, given the price instability.

High risk, high reward. If you buy the average piece of real estate and rent it out, you are looking at 30+ years to cover the cost.

You can also lose it all (housing bubble) or quadruple your investment (investing in SF 10 years ago)

Re: Used GPUs flood the market as Ethereum's price drops below $150

#23

Post by iak8god »

geff82 wrote: post #2

And then they'll buy back at horrendous prices when the Price goes up again? Seems like shortsighted people do this. At least they could play some tremendous video games in the mean time ;)

It's not just the price, but the rising difficulty[1]. Since last month the price of ETH dropped by more than 50% (from a record high bubble). In the same time span, difficulty - how much ETH you can expect to get per whatever your GPU's hashrate is - has nearly doubled.

A whole bunch of people bought in last month when mining profitability calculators were saying you could make $X per month per card, where X is a significant percentage of the card's retail price. Now it's $X/4, the difficulty continues its steady rise, and the fiat price of ETH is totally unpredictable but appears to be on a downward trend.

Unless the price of ETH returns to record highs, the cards people bought last month will never pay for themselves. That's why they're flooding eBay.

[1] https://www.coinwarz.com/difficulty-charts/ethereum-difficul...

Re: Used GPUs flood the market as Ethereum's price drops below $150

#24

Post by tasty_freeze »

the_end wrote: post #4

Welcome to the end. Ethereum crasheses, bringing NVDA down. Bringing the NASDAQ down. Down and down it all goes. This house of cards, these castles in the sky.

If you really believe that, then put your money into a short position and profit handsomely. But I suspect you are just talking, and don't believe what you say enough to risk a dollar.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#25

Post by iak8god »

corporateslave2 wrote: post #13

GPU trading? More profitable than buying the underlying currency since GPU's in relatively good condition always hold a certain value? High levels of correlation with BTC and ETH, along with other cryptocurrency, but a floor on how low it can go. Pays off while holding by mining coins. Much like a dividend.

A friend of mine flipped a brand new GPU on eBay for ~twice its MSRP last month. It'd be hard to do that consistently though, as the limited availability in stores was temporary, caused by the surge in ETH mining. Also the fees and risks involved in selling on eBay quickly eat away at the profits.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#26

Post by TazeTSchnitzel »

WatchDog wrote: post #18
corporateslave2 wrote: post #13

GPU trading? More profitable than buying the underlying currency since GPU's in relatively good condition always hold a certain value? High levels of correlation with BTC and ETH, along with other cryptocurrency, but a floor on how low it can go. Pays off while holding by mining coins. Much like a dividend.

Computer hardware depreciates rapidly, and is expensive to trade(shipping/testing/labour).

Also, said depreciation is intensified by cryptocurrency mining. It's basically GPU torture and buyers in the used market are (rightly) distrustful of GPUs that appear to have been used for mining.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#28

Post by ikeboy »

DanBlake wrote: post #7

Just took a quick look at this. If you are located in the 'mining valley' of Washington where power is ~2c/kwh you are still getting healthy profits. A computer with 7 GTX 1070 graphics cards should produce ~230 mh/s and draw 1 kw. This would cost approximately $30/month in power factoring in kw demand + cooling. The above setup will currently generate $385/month in ETH. So basically for miners who are in the right s…

Average price paid for electricity in many regions is 20 cents/kwh. Just using your numbers that translates into $300/month in costs for under $400 in ETH.

At the national average it would be $200/month by rough math.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#29

Post by kobeya »

ikeboy wrote: post #28
DanBlake wrote: post #7

Just took a quick look at this. If you are located in the 'mining valley' of Washington where power is ~2c/kwh you are still getting healthy profits. A computer with 7 GTX 1070 graphics cards should produce ~230 mh/s and draw 1 kw. This would cost approximately $30/month in power factoring in kw demand + cooling. The above setup will currently generate $385/month in ETH. So basically for miners who are in the right s…

Average price paid for electricity in many regions is 20 cents/kwh. Just using your numbers that translates into $300/month in costs for under $400 in ETH. At the national average it would be $200/month by rough math.

2 cents, not 20.

Re: Used GPUs flood the market as Ethereum's price drops below $150

#30

Post by gwern »

pfooti wrote: post #14
DanBlake wrote: post #7

Just took a quick look at this. If you are located in the 'mining valley' of Washington where power is ~2c/kwh you are still getting healthy profits. A computer with 7 GTX 1070 graphics cards should produce ~230 mh/s and draw 1 kw. This would cost approximately $30/month in power factoring in kw demand + cooling. The above setup will currently generate $385/month in ETH. So basically for miners who are in the right s…

But that's 385 / month revenue? On a setup that's what, $3400 to buy, for seven 1070s? Seems like asking for 10 months to cover capex is a bit thin, given the price instability.

Miners shouldn't be meaningfully exposed since they can sell off their ETH as soon as they mine it (deposit it to an exchange address and sell off every few minutes via an API, or something like that). And while ETH might crash enough to make it no longer profitable and risking your capex, you can switch your GPU to mine whatever is most profitable, so you're more diversified than it looks and insulated from the instability.
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