MMOWare - Bitcoin, Litecoin, Dogecoin, and the Scarcity of Video Cards
Hold onto your wallets folks and I’m talking about your actual money if you’re planning on buying a video card in the near future. GPU prices have been inflating at an increasing speed and video card availability continues to fluctuate like crazy. There is a major risk that any video card purchased through eBay or second hand has been burned out, as a consequence of the BitCoin community. See altcoins like Litecoin and Dogecoin rely on GPU processing power to mine their virtual crytocurrencies. Since these coins can turn electricity into fun money, there is a mad rush on video cards.
A brief aside - cryptocurrencies are a "new" kind of money on the Internet that has to be "mined" with a computer which does increasingly difficult math problems (based on that coin's difficulty level) to "find" a "coin" which is then disbursed. They currently use different pieces of hardware to do the math, which consumes a lot of electricity. A lot of people are "buying into" these currencies thinking they will inflate and they will pull a profit (i.e. investing into it) while others believe it's the "currency of the future."
It’s not new, no. It’s been going on for a little over a year now. First BitCoins required GPU processing power before ASICs took over the place. Now, altcoins based on Scrypt need that GPU power to mine these precious electronic bits of math as they head to the moon. Scrypt originally was designed for CPU mining, but the captains of industry of the BitCoin community worked tirelessly to switch it to the more efficent and faster GPU mining because why not.
Video Cards trade almost like Magic the Gathering Cards right now. Well, except I mean people don’t trade them and they’re not used for playing physical games in game stores. I digress, the point of the matter is that certain models are rare. Originally it was ATI cards, because they allowed for efficient mining. After NVIDIA introduced their Maxwell architecture, they too have been marked for the *coin invasion.
What does this mean for you and I? It means we’re stuck either buying burned out video cards from eBay that were ran at 100% (probably overclocked) for months until their performance peaked out and the miner is trying to offload them to another miner at a profit or stare at NewEgg and cry as you can’t find any video cards available.
Radeon 7950s for instance in a quick search found a lot of brands out of stock. On eBay they are running at or above retail. Crazy huh? A lot of new video cards are scarce and hard to find. Now this doesn’t apply to every video card ever, just the ones that the altcoin mining community seeks to find.
With the recent implosion of the Bitcoin market with Magic the Gathering Online eXchange (MtGOX)there has been a surge of people moving into the altcoin markets which are not only easier to set up (GPU mining is a lot easier than ASIC mining to obtain the servers) but profitable still. If Bitcoin survives the failure of MtGOX, there may be some movement back to Bitcoin, but even then most serious miners use ASICs for Bitcoin and GPUs for Litecoin.
What You Can Do
So if you’re searching for a video card, you need to follow some important steps. First never buy a used video card right now. You’re going to read that they’re barely used, get them, and find that they’re burned out. That’s a super crazy common theme right now. You just really, really should avoid buying used video cards unless they’re from a trusted vendor and will accept returns.
Now, next, do not under any circumstance get fixated to a single version or brand of a card and DO NOT pay $100s more for a “premium” version because it’s the only one of the type of card you want. The super OC’d water cooled cards rarely sell out and there is no reason to pay that premium because miners bought out the cheaper versions and you feel some kind of odd desperation. I’ve heard it happen and it’s sad. Unless you want or have a reason for the crazy super premium cards, just find a different model, seriously.
As for good models, I don’t seriously feel like trying to suggest something on the broad spectrum of available models and in the future, if you come across this article, I don’t want you to feel like a specific card is awesome when that market is changing month to month. Then again, a great card today is a cheap card tomorrow.
Anyway, my advice to buying a GPU is do your research, don’t buy used, and use alternative cards for the ones that the Bitcoiners are going for.