Computer gamers are finding the price increases in video card upgrades to be prohibitive as the demand for high performance GPU’s far exceeds the standard gaming community market.
The source of this unexpected surge in gaming card demand — crypto currency miners. Bitcoin, Litecoin, Ethereum and other digital currencies have experienced exponential spikes in their prices, raising the fees paid to miners who write transactions to the distributed ledger and create new digital coins.
Digital currency miners are paid a fee for solving a mathematical problem involving locating a random sequence of numbers. The first miner to locate the sequence writes the outstanding exchange transactions to the ledger, legitimizing them. This process also creates new coins in the digital currency, which are paid to the miners for their efforts.
Locating the random sequence is a computationally expensive task, requiring specialized processors in order for the miner to have a fair competitive advantage against other miners also looking for the next sequence.
The rewards are significant. A Bitcoin miner is currently paid 12 1/2 bitcoins for each success in locating the random sequence. Even at today’s price of approximately 10,000 USD per Bitcoin, that equates to 125,000 USD.
Miners build their supercomputers, called mining rigs, from a number of specialized components. One lower cost means of creating a rig is to create a back planed array of computer graphics cards, whose specialized processors’, GPUs, function very well in the solving of these mathematical problems.
The problems created for the gaming community are a result of the crypto miners purchasing high end graphics cards in bulk to create and update their mining rigs, resulting in scarcities that have driven prices to outrageous levels.
With price markups exceeding 80 percent, the NVIDIA GTX 1070, at an MSRP of $380 is selling for $700, the same price as the higher end GTX 1080.
Outraged gamers have taken to message boards and social media outlets, expressing their frustrations over the current GPU prices.
Some retailers have tried to find a compromise that will appease what has become a very profitable demand created by the miners and the satisfaction of their long term gaming customers.
Micro Center has been reported to offer large discounts on the cards to gamers, who purchase an individual card along with other computer building items. Only time will tell whether this will provide the price relief that computer gamers are seeking from this crypto currency mining craze.