Ethereum’s long-awaited transition to a Proof of Stake (PoS) consensus mechanism began on September 15, eventually ruling out long-standing transaction issues. Currently, the network is capable of processing 20,000 to 100,000 transactions per second (tps), as opposed to the previous speed of only 30 tps.
In addition, the merger also made the Ethereum network 99.9% more energy efficient than the previous iteration, allaying concerns about its excessive energy consumption, a criticism that is still highly commented on Bitcoin (BTC).
However, among these developments, there is a question that remains of interest to many crypto enthusiasts: “What will happen to the GPU market now that the transition period is over?”
Notably, after the merger, the blockchain moved from a power-intensive Proof of Work (PoW) mechanism to a PoS platform. As a result, miners who used to process transactions and produce blocks have been replaced by ecosystem participants who can now share ether
The numbers don’t lie
After the update was completed, the cost of a number of required GPUs fell sharply. For example, it is reported that the price of the very popular Nvidia RTX 3080 graphics card has dropped from $1,118 to around $700 (in the past three months) in China. Similarly, the price of GPUs made by companies like MSI has fallen by $280 since the end of July.
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To get a better idea of whether the Ethereum merger hype could have contributed to this price drop, Cointelegraph turned to Crypto White, CTO alias of ZK.Work, a Proof of Knowledge mining platform. He noted that prior to the merger, ETH had a total of 860 TH/s of hash power, of which less than 200 TH/s was in Ethereum Classic (
) and ETHW, a PoW fork of ETH launched after the update, along with other mining projects, while 660TH/s are temporarily disabled.
Referring to the above ETC hash rate chart, White notes that incoming hash power appears to be gradually leaving the network since mid-September, that is, since the merger. In this regard, it is assumed that the price of ETC did not rise as expected, because the influx of computing power caused many miners to stop their activities permanently. White added:
“This shows that there are a large number of idle GPUs in the crypto mining market, and traditional mining revenue cannot cover their operating costs, so they are closed and faced with a choice: wait for new mining opportunities or sell used ones.”
He also mentioned that many used NVIDIA 30 series GPUs have recently entered the secondary market for sale, which has led to lower prices for GPUs. But with lucrative minable coins continuing to hit the market in the near future, White thinks these GPUs may find use again.
What’s next for the GPU market?
As is now evident, the Ethereum merger was a major technical and industrial upgrade for the crypto mining sector as a whole. Ilman Shazhaev, founder and CEO of blockchain gaming firm metaverse Farcana, told Cointelegraph that despite this apparent setback, the GPU industry is now a permanent place, especially with the constant emergence of different PoW protocols every day:
“Despite the transition, the number of protocols needing GPUs is not decreasing, and this will help support the demand for these devices in the near future. Additionally, with the gradual introduction of innovations focused on the metaverse, the demand for GPUs will continue, Which is a major component of most game consoles.”
According to White, GPUs won’t get much cheaper anytime soon, and their prices are likely to stabilize at current prices. In fact, he believes the price changes we’re seeing now were “taken into account” prior to the merger, adding that to build momentum for upcoming GPU launches, manufacturers like Nvidia have been dumping inventory for some time now. Because of. He said:
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“I think the price of used GPUs will slowly decrease and the lower-end GPUs will probably disappear from the market completely. On the other hand, I think the demand for high-performance GPUs will continue to grow.”