RIP Gamers, not even the 1080 Ti will save you now.

[24601]

While arguing about the potential fates of various cryptocoins is obviously engaging, I found this video by Gamers Nexus to be very interesting.

The cost increase isn’t just directly caused by mining. There’s some indirect effects and there are some other serious issues.

• Mining has drive up price
• Memory prices have also caused a large percentage of the problem. ($30 increase in component costs to board makers - before it gets marked up to consumers - normally board makers expect memory prices to fluctuate by $5 per quarter
• Several manufacturers think Nvidia could provide more GPUs but they are not asking for more
• Significant concerns from manufacturers on being left with a lot of product on hand if the mining market crashes. Since ramping up takes a few months they are too concerned about unsellable product if mining crashes and floods the market with cheap cards between now and then.

What do you think AIB partners (aka, who was providing these answers) would tell you?

The reality is quite different.

The AIBs are selling GPUs by the pallet to (serious) miners.

The AIBs are the direct reason for the entire situation.

The majority of the GPUs never even make it to retailers, since the primary leaking channel to miners is at the AIBs themselves.

The only viable solution is for Nvidia to decrease AIB allocations and to increase the allocation for their 1st party web store as well as opening web stores in every region (they only have a US one right now).

Essentially what happens in the case of Nvidia is that Nvidia sells most of their chips to the AIBs, then sells some of their chips directly to mining equipment manufacturers, and then manufactures a small amount of their own reference cards to sell at their own web-store and at places like Best Buy.

Due to the fact that Nvidia is afraid of alienating the AIB partners, Nvidia cannot meet the demand from gamers that the AIBs are supposed to fulfill since the AIBs are selling the majority of the cards directly to miners instead of doing their jobs.

 

[VirtualLarry]

The only viable solution is for Nvidia to decrease AIB allocations and to increase the allocation for their 1st party web store as well as opening web stores in every region (they only have a US one right now).

I don't think that's the *only* viable solution. I don't recall if it was this thread or another one (there's like half a dozen on either mining or card shortages sprinkled throughout this forum), but I made a suggestion:

Why not built "mining features" into the cards, optimize them completely for mining purposes, sell them as "mining cards" (with an appropriate markup, but not so high as to discourage purchase of them), with possible a reduced warranty (or possibly an enhanced warranty, if the cards themselves can take the abuse, to justify higher prices and margins), to miners. Leave the "gamer" cards alone, but don't include the mining firmware/hardware extras in the "gamer" card, and sell those for a lesser price, but allow them to still mine in software (but at a performance/watt disadvantage, that would convince serious miners to go for the "mining edition" cards), but still allow gamers the ability to "casually mine", to make ROI for their cards.

 

[Paratus]

What do you think AIB partners (aka, who was providing these answers) would tell you?

The reality is quite different.

The AIBs are selling GPUs by the pallet to (serious) miners.

The AIBs are the direct reason for the entire situation.

The majority of the GPUs never even make it to retailers, since the primary leaking channel to miners is at the AIBs themselves.

The only viable solution is for Nvidia to decrease AIB allocations and to increase the allocation for their 1st party web store as well as opening web stores in every region (they only have a US one right now).

Essentially what happens in the case of Nvidia is that Nvidia sells most of their chips to the AIBs, then sells some of their chips directly to mining equipment manufacturers, and then manufactures a small amount of their own reference cards to sell at their own web-store and at places like Best Buy.

Due to the fact that Nvidia is afraid of alienating the AIB partners, Nvidia cannot meet the demand from gamers that the AIBs are supposed to fulfill since the AIBs are selling the majority of the cards directly to miners instead of doing their jobs.

That’s an interesting hypothesis but I don’t think the evidence supports it.

The AIBs are selling to miners because the demand is there. There’s a high risk that demand is not constant as the last crypto boom-bust cycle showed. No one, including Nvidia, wants to get caught with a ton of current product when all those mining cards get dumped on the market driving prices down. Especially when the memory prices drive the cost of those boards higher, making it harder to recoup the cost of purchasing them.

Nvidia is insulated from those cost for the most part since other than their directly sold cards the AIBs are paying for the GPUs whether the cards sell or not. Furthermore neither Nvidia nor the AIBs wants to have a ton of current gen cards in the pipe when the next gen is on it’s way.

High demand, high component prices and high uncertainty are all that’s necessary to drive high video card prices and low availability.

 

[24601]

I don't think that's the *only* viable solution. I don't recall if it was this thread or another one (there's like half a dozen on either mining or card shortages sprinkled throughout this forum), but I made a suggestion:

Why not built "mining features" into the cards, optimize them completely for mining purposes, sell them as "mining cards" (with an appropriate markup, but not so high as to discourage purchase of them), with possible a reduced warranty (or possibly an enhanced warranty, if the cards themselves can take the abuse, to justify higher prices and margins), to miners. Leave the "gamer" cards alone, but don't include the mining firmware/hardware extras in the "gamer" card, and sell those for a lesser price, but allow them to still mine in software (but at a performance/watt disadvantage, that would convince serious miners to go for the "mining edition" cards).

Pointless.

The main demand is from industrial scale miners, who will buy as many cards as they can get their hands on at the lowest prices they can find.

What this means in reality, is placing 1000, 5000, 10,000 card orders with an AIB and then having them deliver the pallets of cards directly to you.

Making "cards that are slightly better for mining" as a category is the highest possible risk, as you have just spent valuable engineering, marketing, design time on something so ephemeral.

The proper way is for one of the mining mega-corps to develop an "AIB" style card that they manufacture both for their own mining farms as well as would be desirable for retail consumption.

This way, it would be a chip that is earmarked to be sent to a mining company anyways (so it would not interfere with allocation/demand/supply calculus of the gaming channel) that is already building their own cards from chips that they bought directly from Nvidia.

It would be a way for Nvidia to sell more chips while not having their AIBs taking excessive/unwarranted risks.

 

[24601]

That’s an interesting hypothesis but I don’t think the evidence supports it.

The AIBs are selling to miners because the demand is there. There’s a high risk that demand is not constant as the last crypto boom-bust cycle showed. No one, including Nvidia, wants to get caught with a ton of current product when all those mining cards get dumped on the market driving prices down. Especially when the memory prices drive the cost of those boards higher, making it harder to recoup the cost of purchasing them.

Nvidia is insulated from those cost for the most part since other than their directly sold cards the AIBs are paying for the GPUs whether the cards sell or not. Furthermore neither Nvidia nor the AIBs wants to have a ton of current gen cards in the pipe when the next gen is on it’s way.

High demand, high component prices and high uncertainty are all that’s necessary to drive high video card prices and low availability.

You really need to stop talking about things that are out of the scope of your understanding.

What we are talking about is at a higher level of problem than the one your are regurgitating from the AIB PR reps ("reviewers").

The problem is purely structural with the miss-allocation of the duty of "selling to gamers" that Nvidia has bargained with AIBs for.

The AIBs could produce infinite cards and will still "have no cards to fulfill gamer demand" since the cards simply never reach retail.

This is the 5th time I've had to restate myself on this very specific subject.

The people reading the forums really need to take time to read what I am typing before pressing the "tweet" button.





Insulting members is not allowed.


esquared
Anandtech Forum Director

 

[Paratus]

I don't think that's the *only* viable solution. I don't recall if it was this thread or another one (there's like half a dozen on either mining or card shortages sprinkled throughout this forum), but I made a suggestion:

Why not built "mining features" into the cards, optimize them completely for mining purposes, sell them as "mining cards" (with an appropriate markup, but not so high as to discourage purchase of them), with possible a reduced warranty (or possibly an enhanced warranty, if the cards themselves can take the abuse, to justify higher prices and margins), to miners. Leave the "gamer" cards alone, but don't include the mining firmware/hardware extras in the "gamer" card, and sell those for a lesser price, but allow them to still mine in software (but at a performance/watt disadvantage, that would convince serious miners to go for the "mining edition" cards), but still allow gamers the ability to "casually mine", to make ROI for their cards.

There’s another more radical and partial fix I was thinking of. If the goal is to continue to allow the expansion of PC gaming why not include a mid range card with every enthusiast CPU purchase.

Intel with EMIB, HBM2, and an AMD GPU or their own homegrown one, and AMD with HBM2, infinity fabric, and an interposer with a GPU - CPU combination could provide an RX580 / 1060 class on board GPU.

That way you’d always have a decent GPU available. Of course that would leave the AIB market a lot smaller.

 

[VirtualLarry]

https://www.newegg.com/Product/Product.aspx?Item=N82E16814126133&ignorebbr=1

GTX1060 3GB for ... $639??? Ok, I've been defending mining, as a viable use for GPUs besides gaming, but I'm not defending this INSANE price-gouging.

Granted, this is a third-party seller via Newegg Marketplace, but still... a little extreme, don't you think?

That's got to be over 3x MSRP. How high can they go? Before people start saying "NO!".

Edit: What if all of these supposed "miners", that are buying cards by the pallet-load, weren't mining with them at all, but ebaying them for ridiculous prices? Just wondering...

 

[Paratus]

You really need to stop talking about things that are out of the scope of your understanding.

Let me help you out here. Insulting the person you are conversing with does nothing to elevate your position. On the contrary, I’m now fairly certain you have nothing to back your opinion up with.

What we are talking about is at a higher level of problem than the one your are regurgitating from the AIB PR reps ("reviewers").

So here we see you have an issue with AIBs and reviewers which seems to be a recurring theme with you.

I am also curious as to what “levels” of problems there are. Do you have a list?

The problem is purely structural with the miss-allocation of the duty of "selling to gamers" that Nvidia has bargained with AIBs for.

“Duty’s” between companies are called contracts. Are you saying the Nvidia has contracts with the AIBs that specify who they may sell to?

I would be interested in seeing evidence of this.

The AIBs could produce infinite cards and will still "have no cards to fulfill gamer demand" since the cards simply never reach retail.

Hyperbole also does not help your case. Demand is obviously not infinite so with enough production costs would come down through over supplying the market.

This is the 5th time I've had to restate myself on this very specific subject.

The people reading the forums really need to take time to read what I am typing before pressing the "tweet" button.

Is there some reason I should take your opinion as some how more important than any other poster here? Are you involved in the field for example?

I eagerly await your response.

 

[24601]

Whelp, looks like my late 2017 to early 2018 spoon-feeding session ends early.

Have fun fumbling in the dark by yourselves .

 

[Charlie22911]

Plot twist: AIBs aren’t selling cards to anyone, and instead are hoarding them to mine with for themselves.

 

[UsandThem]

https://www.newegg.com/Product/Product.aspx?Item=N82E16814126133&ignorebbr=1

GTX1060 3GB for ... $639??? Ok, I've been defending mining, as a viable use for GPUs besides gaming, but I'm not defending this INSANE price-gouging.

Granted, this is a third-party seller via Newegg Marketplace, but still... a little extreme, don't you think?

That's got to be over 3x MSRP. How high can they go? Before people start saying "NO!".

Miners will keep paying regardless of the price. What we need is for this crypto-currency gold rush frenzy to slow down. Everyone and their mom is trying to cash in for easy money. The only thing to get cards back to MSRP and actually available for end users to purchase is a big "pop".

 

[Madpacket]

You really need to stop talking about things that are out of the scope of your understanding.

What we are talking about is at a higher level of problem than the one your are regurgitating from the AIB PR reps ("reviewers").

The problem is purely structural with the miss-allocation of the duty of "selling to gamers" that Nvidia has bargained with AIBs for.

The AIBs could produce infinite cards and will still "have no cards to fulfill gamer demand" since the cards simply never reach retail.

This is the 5th time I've had to restate myself on this very specific subject.

The people reading the forums really need to take time to read what I am typing before pressing the "tweet" button.

You're ignoring some basic economic markers WRT mining difficulty and price. The more cards that are purchased by miners, the higher the difficulty becomes (PoW has self correcting difficulty based on total hashing power of the network).

There's an equilibrium that can be met between supply and demand.

Miner's will significantly slow down purchases as their profits dwindle due to increased difficulty and fluctuations in price.

The solution (there are others) IMHO is to ramp up production as much as possible. This will drive difficulty through the roof and reduce mining profits as a result. Nvidia has the capacity to do this (AMD as well but to a much lesser extent) but they refuse to. Why is that? You think they're worried the bottom will fall out and they'll (gasp) have to sell cards at MSRP again? Of course not. They're a greedy corporation acting in their own self interest increasing profits as much as possible by selling 2 year old GPU technology with insane margins (Volta is basically ready, why isn't it out yet?) which is what any responsible corporation should be doing. I don't blame them but it's a dick move.

Gamers need to focus some of this negativity at Nvidia/AMD. They've been ignoring miner's for far too long and put gamers and miners (due to lack of supply) in this position of having to shell out stupid prices for mid range cards.

 

[PeterScott]

Miners will keep paying regardless of the price. What we need is for this crypto-currency gold rush frenzy to slow down. Everyone and their mom is trying to cash in for easy money. The only thing to get cards back to MSRP and actually available for end users to purchase is a big "pop".

Or speed up. The faster that mining frenzy ramps, the sooner it hits the wall. If you get twice as many people mining, they get half the returns.

 

[VirtualLarry]

Miners will keep paying regardless of the price. What we need is for this crypto-currency gold rush frenzy to slow down. Everyone and their mom is trying to cash in for easy money.

But can you blame them? The ability of ordinary citizens, to use their computer time, to "print virtual money", is pretty unprecedented. And thus far, totally legal too. Why wouldn't even a "norm" want to get in on the action, if they can?

The only thing to get cards back to MSRP and actually available for end users to purchase is a big "pop".

Well, speaking selfishly for myself, I don't want the bubble to pop, per se, I want "mining" (making money at CC via my PC) to continue as a "thing". But speaking for the industry, the gamers want their gaming cards, and they want them at "normal" (non-inflated) prices. It would be nice if we could have both things. Which could be possible, if they made a separate "mining edition" card, or if they simply increased supply of the cards.

Thing is, it's not just the "mining fad" driving up prices, as that GN YT vid showed, memory prices are up industry-wide, and if they cost the mfg $30 more, you had better believe that the price at retail is going to rise probably nearly $100 anyways. That doesn't excuse the 3x MSRP markup of some cards, but it explains some of the mark-up that we're seeing from Newegg for their 1st-party sales cards.

 

[VirtualLarry]

The solution (there are others) IMHO is to ramp up production as much as possible. This will drive difficulty through the roof and reduce mining profits as a result. Nvidia has the capacity to do this (AMD as well but to a much lesser extent) but they refuse to. Why is that? You think they're worried the bottom will fall out and they'll (gasp) have to sell cards at MSRP again? Of course not. They're a greedy corporation acting in their own self interest increasing profits as much as possible by selling 2 year old GPU technology with insane margins (Volta is basically ready, why isn't it out yet?) which is what any responsible corporation should be doing. I don't blame them but it's a dick move.

Gamers need to focus some of this negativity at Nvidia/AMD. They've been ignoring miner's for far too long and put gamers and miners (due to lack of supply) in this position of having to shell out stupid prices for mid range cards.

I said the same thing, in different words, in a different thread. That the solution is self-correcting, and that the mfgs need to increase their supply, and then miners will make less $$$ per card, thus forcing prices back down, as demand equalizes.

 

[UsandThem]

I said the same thing, in different words, in a different thread. That the solution is self-correcting, and that the mfgs need to increase their supply, and then miners will make less $$$ per card, thus forcing prices back down, as demand equalizes.

Well at this point I don't think the average person who is doing a little mining like you is really affecting anything. I think the real problem are the huge mining farms mostly in Asia. These big players are getting their hands on huge shipments of cards, likely directly from the AIB partners or large distributors.

Miners like yourself will stop doing it when it gets more difficult to make much money after you factor in electricity. The large farms will keep going until there isn't any money to be made. I look at it much like the stock traders who do hundreds of thousands of micro-transactions every day, many times each one just worth insignificant amounts (like fractions of pennies), but when added all up are huge amounts of money made daily.

But we will see how it plays out because just the sheer amount of new crypto-currencies popping up is nothing short of amazing. Like any other "gold rush" that people have set out to get rich on, they all eventually dry up and end, leaving a lot of people with nothing. I personally think in a few years we will look back on this just like we did with the dot.com bubble.

 

[Red Squirrel]

Yep the real answer here is they just need to rev up production. It may even be in the favour as they will sell more units.

 

[ZGR]

Could upping production this late in the 1000 series push back Volta?

https://www.newegg.com/Product/Product.aspx?Item=N82E16814126133&ignorebbr=1

GTX1060 3GB for ... $639??? Ok, I've been defending mining, as a viable use for GPUs besides gaming, but I'm not defending this INSANE price-gouging.

Granted, this is a third-party seller via Newegg Marketplace, but still... a little extreme, don't you think?

That's got to be over 3x MSRP. How high can they go? Before people start saying "NO!".

Edit: What if all of these supposed "miners", that are buying cards by the pallet-load, weren't mining with them at all, but ebaying them for ridiculous prices? Just wondering...

C'mon Larry, real miners buy in bulk

https://www.newegg.com/Product/Product.aspx?Item=9SIA6V66SF5498&cm_re=gtx_1060-_-9SIA6V66SF5498-_-Product

https://www.newegg.com/Product/Prod...053&cm_re=gtx_1060-_-9SIA6V66RJ0053-_-Product

 

[Red Squirrel]

Lol that's great that Newegg is catering to miners. They may as well include risers while they're at it.

What's the difference between those two models though? Like I see they physically look different but they both have similar specs.

 

[littleg]

For me it's simply an unforgivable waste of energy. In these times of climate change when we're apparently doing what we can to limit our energy usage in order to keep carbon emissions down the cryptocurrency network is adding to a global problem and delivering no benefit to society.

They could at least do something useful with the energy they're currently wasting, fold proteins or something.

 

[Despoiler]

For me it's simply an unforgivable waste of energy. In these times of climate change when we're apparently doing what we can to limit our energy usage in order to keep carbon emissions down the cryptocurrency network is adding to a global problem and delivering no benefit to society.

They could at least do something useful with the energy they're currently wasting, fold proteins or something.

You'd be right except in many places you can have your energy company source your power from renewable. I specifically pay for that and I mine. I'm actually affecting positive change by increasing demand for solar and wind. Are you doing that?

 

[Paratus]

For me it's simply an unforgivable waste of energy. In these times of climate change when we're apparently doing what we can to limit our energy usage in order to keep carbon emissions down the cryptocurrency network is adding to a global problem and delivering no benefit to society.

They could at least do something useful with the energy they're currently wasting, fold proteins or something.

You'd be right except in many places you can have your energy company source your power from renewable. I specifically pay for that and I mine. I'm actually affecting positive change by increasing demand for solar and wind. Are you doing that?

Yup. 100% wind here. Although I’m not mining yet.

 

[Yakk]

Could upping production this late in the 1000 series push back Volta?

I would guess chip manufacturing is like most industries and normally AIBs would assume all the risk for an extended/late order. The chip manufacturer has their own commitments to roadmaps & shareholders. I'm sure there's a margin available and maybe if they get enough demand from most/all AIBs they could revise their roadmap after reviewing their supply chain can provide it.

 

[nitromullet]

looks like a miner selling off their cards...

https://www.ebay.com/itm/ONE-NVIDIA-GeForce-GTX-1070-Founders-Edition/323020492450

Perhaps not indicative of anything. It could just be a single miner with a few cards bowing out or trying to anticipate the market, but interesting to see nonetheless IMO.

 

[bigboxes]

You'd be right except in many places you can have your energy company source your power from renewable. I specifically pay for that and I mine. I'm actually affecting positive change by increasing demand for solar and wind. Are you doing that?

Bullcrap. You are not doing anything positive by using renewables and mining. Mining is a waste of resources, renewable or not.