Why Graphics Cards Became Expensive, and Are About to Get Much Cheaper

Right now there is a world-wide GPU shortage. If you’ve tried to pick a high end graphics card to build your latest gaming machine you’ll probably have figured it out, graphics cards of any kind are in short supply. But it’s not just the newer top-shelf graphics cards, older cards have doubled or tripled in price on the second-hand market, and it’s all down to cryptocurrency.

Things began to spiral out of control towards the end of May with the uptick the Ethereum market driving miners to clear out the shelves of anything that could be used to mine the currency, and while shortages of cards has happened before, there’s never been anything on this sort of scale before. Bitcoin also went through a stage where off-the-shelf GPU cards were a good fit—you now need custom ASIC hardware to even have a chance of mining being profitable—but it was still early days for the cryptocurrency market as GPU mining of Bitcoin became unprofitable late-2011, or possibly early-2012, and far fewer people were aware of it.

With the price of Ethereum climbing from about $10 in January to a peak of around $400 in June, huge numbers of people were drawn by attractive returns that could be made by mining the currency. If you purchased a cluster of six AMD RX 580 cards, for $350 a piece, you would have made roughly around $900 over the course of a month. At that rate of return the cluster would have pretty much paid for themselves in just over two months.

In response to the rising demand the manufacturers introduced new ranges of ‘mining’ cards. Based around the same designs as normal cards these new cards often drop display connectors entirely, if you’re mining cryptocurrency you just don’t need to be able to connect your card to a monitor. However they also come with shorter warranties, an acknowledgement by manufacturers that—unlike gamers—the cards will be run continuously twenty four hours a day.

But the time when GPUs are profitable for Ethereum mining is rapidly coming to an end. Not only has the price of the currency declined by 45% over the course of the last month, but the DAG has increased to the point where its already unprofitable for smaller miners in any case.

You should therefore expect to see a large number of graphics cards bought for mining to turn up on the second hand market ‘real soon now’ as miners seek to close out their positions. That means a flood of cheap high-end graphics cards on eBay, which will make gamers happy, but alongside those will be a large number of those new ‘mining’ cards.

On the face of it with shorter warranties, and no display connectors, those mining cards aren’t that useful. Certainly gamers won’t be interested in them, but perhaps you should be—because they’re the perfect platform to start experimenting with deep learning. With solid GPU support you can reduce time for deep learning experiments from months, to days, and with the flood of cards coming onto the market in the next month or two, now could well be the time to build a bargain deep learning rig.

Although if you are thinking about picking up some cheap ‘mining’ cards to play around with deep learning you should be aware that most of the available machine learning libraries are based around CUDA, rather than OpenCL. So while the underlying hardware of the two brands is just as good, you might want to focus your search on NVIDIA rather than AMD cards.