Thursday, October 18, 2012
Mining With GPUs
Though the recent rally in the exchange rates has caused mining profitability to rise to the highest level seen since February, many mining operators are planning for the future and liquidating their inefficient rigs, as shown in this post’s photo.
In less than six months, block 210,000 will be reached and with that event the block reward will drop by half, to the level of just 25 BTC. Thus instead of 7,200 BTC targeted for issuance per-day, only 3,600 BTC per-day will go to those mining.
Because it can’t be known what the exchange rate and mining difficulty level will be at that point in time, mining operators are preparing by either switching over to more efficient mining equipment or are liquidating operations outright — oftentimes due to the higher capital requirements needed to acquire the modern forms of mining hardware (FPGA and ASIC).
But one mining operator’s pain is another’s gain. Those operating where electric rates are a fraction of their competitor’s rates are still able to compete while mining with GPUs due to the comparatively lower cost of GPU hardware. Lower cost, maybe, but they still aren’t cheap. Even though the GPUs from this post’s photo are offered for sale as being used previously for mining (presumably for many months) they still have a relatively high market value compared to the price when they are purchased brand new. The HD 6950s in this instance, are offered at only a 25% discount versus the current price from NewEgg.
The seller, in this instance, is not leaving mining but instead “restructuring” his mining operation to use far less power to be compatible with the operation’s new solar power source. “I’m in a position to buy enough solar panels at an amazing price that I’ll never need to buy electricity again” writes forum member AmpEater. So while there likely won’t be less GPU mining occurring in total, there will be a rotation of hashing equipment. GPUs are being decommissioned where power is expensive and those same cards remain a valued commodity to those with access to power that is relatively cheap.
If the exchange rate continues to rise faster than the difficulty does, even with the block reward drop these mining operators using GPUs yet might come to find their strategy paying off handsomely.
Posted by paypal alternatives at 11:22 AM