GPUs are manufacturable. The market is meant to signal to manufacturers that this is profitable to make more of, and thus, more would become available in the future. Unfortunately, the current world events conspired to not allow this balance to happen - chip shortages and logistics problems etc.

Give it a few more years, and it will balance back out.

Crypto is carefully designed to model Parkinson's Law. (Proof of) Work always grows to fill the compute available.

Network difficulty adjusts to pull the demand curve to the right.

That makes the GPU market supply-constrained. Any increase in supply will be met with a lower price equilibrium which will result in more GPUs bought and used for mining. Which results in a higher THR which will be met with additional increases in network difficulty which will pull the demand curve to the right ad infinitum.

I'm not sure how much more economics 101 I can make this. As long as GPUs are part of the system, the GPU market will be supply-constrained. The supply and demand curves will continue to drift to the right.

There is not enough competition, people got conditioned to high prices for 10 years - once prices are raised they are not coming back.

Good luck starting your GPU company

> Good luck starting your GPU company

There is a chance you may mean that sarcastically, so...

Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory. Mass produce 5-10 year old tech in bulk, soak up enough of the market to survive and move as quickly as possible into modern manufacturing techniques.

We've seen in the last number of years that investors/lenders are perfectly happy to take multi-billion dollar losses of multiple years while chasing a market. It'd work fine.

> Mass produce 5-10 year old tech in bulk

I really wonder if the tech/equipment to do this is actually also unavailable - preventing any competition from starting up. I think it's the same logistical bottleneck that is hitting everything, not some monopoly conspiracy, and if that's the case, by the time bottlenecks clear up, the demand for such items would also drop (as the higher end stuff becomes available again).

> Yes, if you think sale prices are going to stay much higher than manufacturing costs it is a great time to start a new GPU factory.

So then as PoW difficulty increases, demand for GPS increases. Necessitating more factories until the primary output of world industry is GPU factories.

Does nobody see how absurd this is?

The market is stuck in a feedback loop. People are naievely looking at this and saying "Aha, just follow the rules of capitalism and the market and it will work out well. That's the religion." Not seeing this is a spiral. There is no market solution here.

It's like we're looking at a while loop, with condition "true == true", the body of the loop doubles the length of a string each time. Somewhere here is saying, this will not end well, we're gonna use up all of our heap trying to double the string size. And somebody else's solution is, "close some running programs so that ram can be allocated to the string doubling program".

Ok yah, we can run a bit longer, but the end result is still 70%+ of RAM being used to allocated these strings and eventually program crash.

Building more GPU factories isn't a solution is crypto's exponential consumption of resources.

> So then as PoW difficulty increases, demand for GPS increases. Necessitating more factories until the primary output of world industry is GPU factories.

it's not absurd. If you replace GPU with food, and PoW with population, then you will see that it is not absurd. It is only absurd because of the a priori assumption that having more PoW is worthless - an assumption you wouldn't make with population.

And i would think that if in the future, demand for PoW crypto grew, it means it must be satisfying a demand (for example, currency collapse). As long as a demand is being satisfied, and paid for by individual's earned money, it should be fine (as opposed to being paid for by somebody else's money - aka, externalization of cost).

> it's not absurd. If you replace GPU with food, and PoW with population, then you will see that it is not absurd. It is only absurd because of the a priori assumption that having more PoW is worthless - an assumption you wouldn't make with population.

> And i would think that if in the future, demand for PoW crypto grew, it means it must be satisfying a demand (for example, currency collapse). As long as a demand is being satisfied, and paid for by individual's earned money, it should be fine (as opposed to being paid for by somebody else's money - aka, externalization of cost).

I'm not even certain how to respond to this. I called out that it's becoming evident that the growing problem with crypto is a collection of people who fundamentally don't understand markets and society. That the understanding is as simplistic as "if someone is willing to pay money for it, then it must be good for society". Which is beyond naieve. And how people need a deeper understanding of what's happening.

And the response "countering" my argument is essentially saying I'm wrong because paraphrasing: "If someone is willing to pay for it, it is good for society". And equating GPU production with food production because in this hypothetical they are both things people pay for.

I'm not certain we can have a productive discussion. The goal of society isn't to create markets. Markets are a tool society uses to improve life for people. Markets aren't the goal.

Making legal murder for hire is not a net positive for society, even though you could create a market place for it and people would pay for it. Arguing something is good because people will pay for it is so beyond flawed that I don't have a way to describe it.

Historically, for many products, high demand leads to lower unit prices as manufacturers become more efficient. Since we're a decade into GPU mining, there's been a lot of time for manufacturers to adjust. While so far they have not been able to keep up with demand, I don't think it's clear that they never will.

Sorry, not following. Can you explain how efficiencies in GPU production interact with network difficulty to produce lower GPU prices? I'm not finding much in the literature.

What makes hash-based proof of work function is that to produce some number of hashes you need to use some amount of real-world resources. In practice, the two main resource inputs are electricity and computational hardware. If hardware is scarce, as it is now, the hardware will be a large proportion of mining cost, while the more efficiently hardware can be produced, the more of the cost is electricity.

How does that make miners not buy GPUs?

LHR was one attempt at it with varying success.

And it won’t take a few years to balance out. If ETH really does go PoS in the next six months then you’ll see a lot of RTX 3080 and 3090 come on the market for very cheap.

A lot of ETH miners say they’ll go to RVN or others but there is no way other coins can take the hash rate currently devoted to ETH.

> The problem is that miners are buying GPUs.

That's not a real problem, I can stop buying GPUs and keep playing most 3-5 years old games with a decent integrated one in a relatively modern CPU at a fraction of the price, and that's it. I'm not a gamer however, so I would understand hardcore gamers to be pissed off, but that's not a real problem as nothing vital is taken away from anyone.

The real problem is the steadily raising demand in energy which doesn't seem to stop anywhere in the future. If we accept the fact that more energy translates into more money, and that more money allows miners to add more and more GPUs (or ASIC dedicated hardware, energy-wise, a cluster of GPUs and a box that draws 3000 watts are exactly the same thing) then we're going straight to a future in which every resource will be used to produce energy.

How to stop something that screams "put more energy in = get more money out"?

No way, it's probably too late, and I expect a huge misinformation campaign from the parties involved, which already amassed a lot of money to pay for it. Therefore we'll see a stronger push for nuclear and other non clean sources, but also soaring prices of every other source, including clean ones, because the demand dictates the price, and there is where most demand is coming from.

And there's also the warming problem, because you know, consuming so much energy doesn't come without a price to pay.