Bitcoin News

Crypto Mining Driving Up Chip Costs – How Long Will It Last?

bitcoin mining

It has come as no shock to many computer users that the prices of key components have increased in recent years, reversing what had for many years been a pattern of gradually dropping prices. Computer builders who may have sought to upgrade were suddenly faced with significantly increased prices for RAM, video cards, and other important hardware. While increased demand for smartphones and tablets has been at least partially responsible for that increase in price, the major driver has been the increased demand for cryptocurrency mining hardware. But how long will that effect last?

With an increase in cryptocurrency prices, especially Bitcoin, more and more people sought to profit from those price rises by getting involved in Bitcoin and cryptocurrency mining. But Bitcoin mining is famously hardware intensive, requiring significant outlays first for hardware, and then significant outlays for electricity.

The big debate among miners is between two methods of mining: ASIC and GPU mining. GPU mining use the GPUs (graphics processing units) from video cards to mine cryptocurrencies, while ASIC uses chips that are specifically tailored to mine Bitcoin. While ASICs are faster and use less energy, they also are much more expensive and less flexible. For many small scale miners, then, video cards are the way to go. Try to find a new video card at your local Micro Center or Best Buy, or even online, and you’ll have to rush to get one before they’re sold out.

And if you’re one of the lucky ones to get your hands on one, you’ll have to pay way more than you would have just five years ago. Expect to pay more than $300 for a mid-range card and well more than that for the top-end cards. RAM has seen similar price increases, with many modules quadrupling in price in recent years. For those who didn’t future-proof their computers, adding additional RAM now could bite them in the wallet.

The big question, of course, is how long will all of this last? While computer users and gamers are hoping that the cryptocurrency mining craze dies down, there are no indications that that will be the case any time soon. With many mining companies, even if one cryptocurrency becomes unprofitable to mine they just shift their resources to mining something else. Bitcoin investors may not need to pay any attention to this with regard to their Bitcoin investments, but if they’re looking to buy a new computer or new components in the near future they might get an unexpected case of sticker shock.