Wednesday, June 7th 2017
Ethereum Mining Wipes Out Radeon Inventory, AMD Stock Rallies
AMD Radeon graphics cards have always been too good at GPGPU for their own good. The new Ethereum block-chain compute network, with the Ethereum crypto-currency, works really really good with AMD Radeon Graphics CoreNext architecture-based GPUs (that's every AMD GPU since Radeon HD 7000 series). As a result, not only have Ethereum prospectors bought out nearly all inventory of AMD Radeon graphics cards from the market, but also forced an inflation of used AMD Radeon graphics cards on online tech-forums, and used-goods stores on eBay and Amazon. Some of these used cards are priced higher than even launch-prices.
Every $1,000 spent on AMD Radeon hardware towards Ethereum mining is recovered within 2 months, and then as long as your hardware lasts and you're paying your power bills, you're swimming in crypto-currency that can be converted to Bitcoin and even US Dollars. One Ethereum (ETH) exchanges to USD $265 at the time of this writing. There's already $330 million worth Ethereum being traded, and that number is only going to grow as people sell USD or BTC to buy ETH and pay for entry into the Ethereum network, and use ETH as a crypto-currency.
AMD is at the receiving end of this mad rush to grab up Radeon graphics cards. The company's stock surged nearly 9 percent on Tuesday (6th June). Those shorting (betting against) the AMD stock have been inflicted with heavy losses. "As of Monday, AMD short-sellers had been up about $15 million for 2017. But Tuesday's share surge left them at a loss of $125 million on paper for the year," writes Reuters, citing S3 Partners, a financial analytics firm. The AMD stock was also bolstered by Apple's announcement of new iMac, iMac Pro, and Macbooks that use AMD Radeon graphics chips.ETH-USD chart by Coingecko, Source: Reuters
Every $1,000 spent on AMD Radeon hardware towards Ethereum mining is recovered within 2 months, and then as long as your hardware lasts and you're paying your power bills, you're swimming in crypto-currency that can be converted to Bitcoin and even US Dollars. One Ethereum (ETH) exchanges to USD $265 at the time of this writing. There's already $330 million worth Ethereum being traded, and that number is only going to grow as people sell USD or BTC to buy ETH and pay for entry into the Ethereum network, and use ETH as a crypto-currency.
106 Comments on Ethereum Mining Wipes Out Radeon Inventory, AMD Stock Rallies
No 2% credit card fee for the seller, and no servers need to be hosted by credit card companies. This is a completely decentralized computational network that can do so many things besides simple transactions. Many companies are looking into utilizing blockchain to remove the need for server farms. It is complete democratization of computing. The icing on the cake is that there also are no currency exchange fees.
Then you go on talking about "getting tracked". I never claimed you couldn't be tracked using Bitcoin - in fact it's easier to track people than cash! But if you use an obfuscation wallet it is incredibly hard to follow, and alternatives like DASH do in fact make it nearly impossible to be tracked.
*walks away sad*
The transaction fee is paid for in and by the inflation from handing out money for processing, and the only real value created by it is from people who need or want to use it. All money systems work the same, and there is no free lunches.
First up, a quickie, all cryptocurrencies DO generally have a cost to send a transaction - at least if you ever want that transaction to complete in a reasonable time frame. Taking Bitcoin as an example, when you send a transaction to the network you choose a fee to pay to the miners. The higher the fee you give, the higher priority miners will give your transaction. Blocks are created every 10mins (on average) and can only contain 1MB of data, so can only accommodate a fixed number of transactions. If there's too many transactions to fit, miners will pick the ones with the highest fees first, and hold the remaining lower fee transactions for the next block. However, there is a mechanism whereby miners are supposed to include a few "oldest first" transactions in their blocks, this is designed to ensure that all transactions eventually do get processed. This is up to miners though, no one can force them to actually do this, it's just the default in the Core software.
So yes, whilst you can send Bitcoin to anyone in the world for free, realistically you will pay a small fee each time, though this will be MUCH smaller than standard international transfers. As the network gets more congested with more transactions however, these fees will rise. Simple supply and demand. This is the whole reason for the Bitcoin scaling debate which has been ongoing for a good while now.
Next, Ethereum! Ethereum is not a decentralised supercomputer as you might initial expect. For the execution of smart contract code on the Ethereum network, every single node runs the exact same code so it's a giant duplication of effort rather than a collaborative supercomputer one. It should be noted that the smart contract code is extremely simple code and not complex computing by any means. It's generally along the lines of "if this then do that" because the higher the complexity of the code, the more it costs the person uploading it to have it accepted by the network. For example, every new variable costs more ETH for the uploader, as does every "if" or "for loop". If you fancy a look at an example you can play around with some Solidity code online here: ethereum.github.io/browser-solidity/. A good tutorial can be found here: solidity.readthedocs.io/en/latest/introduction-to-smart-contracts.html
The purpose of the Ethereum network all duplicating effort is so that everyone can then compare the results to check for consistency in the calculations, much like everyone in the Bitcoin network verifying all the transactions for themselves.
Now the Ethereum mining process is separate from the smart contract functionality, and is the subject of this article and likely what most people are thinking about when they hear about "these wasteful cryptocurrencies". Mining is the process of generating new blocks to add to the blockchain, and in Ethereum this is currently done via a Proof-of-Work mechanism which does indeed consume a hell of a lot of electricity! It also provides absolutely no benefit to anyone outside of the Ethereum ecosystem, no arguments from me there. In that sense, the calculations are indeed a giant waste of resources to an outside observer, however, as pointed out by some here already, that energy goes to securing the transactions on the network and that in itself is arguably extremely useful as it vastly reduces the human interaction required to keep things synchronised and to prevent fraud/double-spending etc. You could argue this means people can get indeed get jobs in other areas of life and that could arguably be more productive for the world in general than having loads of people spending their time and effort on carrying out and checking financial transactions.
GPU Mining at home - there's a number of reasons why people might mine, the obvious one being for financial gain. Reasons might include spinning up a mining business for financial profit, or it might be an average home user who fancies earning a few $. Other motivations might be to promote the ideological use of cryptocurrencies as a way to pull currency control away from governments, or it might simply be as one person said, because it's a fun hobby for some! Personally, I'm a home user who has a single GPU mining away 24/7 primarily because I happen to find it really interesting. It doesn't hurt that it also makes a small amount of money in the meantime. I ease my concerns about wasting power and the rising power bill by reminding myself it actually helps heat my house which is a productive use of all that waste heat :) .
All that said, I have mined BTC, DOGE, ETH and a couple of others, and I have invested money simply buying BTC and ETH. I have made WAY more money investing and doing some light trading (primarily for entertainment) compared to mining. If you're thinking about buying a GPU to mine with purely for financial gain, I would highly recommend just buying some cryptos and hanging onto them instead.
Finally on mining, Ethereum will soon (possibly this year, probably later as it keeps getting delayed) switch to Proof-of-Stake mining. This will prevent just anyone from joining in with mining and making money form it. the PoS mechanism will eventually require that you have to own a bunch of Ethereum in order to contribute to the mining process (without some you'll just be ignored by the rest of the network if you try). The details aren't yet concrete, they're still testing and working on what they want for the final version, but anyone anywhere being able to contribute to securing the Ethereum network and/or mining for profit will eventually come to an end. This is probably a good thing in my opinion, by that point enough people should be invested in the network that PoS can safely replace PoW and we can save a whole lot of electricity in the long run!
So from that enormous rant, you can probably guess my opinion is that cryptocurrencies are not a waste of time and effort. I honestly see a cashless future, though this will probably not be in my lifetime. Understanding the potential of cryptocurrencies requires an awful lot of economic thought which I honestly can't get my head round entirely. A form of currency with a fixed supply that absolutely cannot have its number of units increased or decreased (unless agreed by majority consensus of the miners) is not something we've ever had on a global scale before. Can economies function properly long-term like this? Many people much better versed in economic theory will be thinking about this and we'll just have to wait and see.
Well this was ridiculously over the top for a forum thread....
Edit: Forgot to talk about anonymity in blockchains. Really quickly though, everything is recorded so every transaction will always be traceable. However, who submits a transaction is extremely hard to trace, you need to see them send it because once it's propagating around the network the source cannot be determined. It's also important to remember that in the blockchain world, anyone can create a new address at any time for essentially no cost. So I can create myself 10,000 addresses and ping Bitcoin around those addresses like crazy making it much harder to track. The counter to that is that each transaction will cost me a little Bitcoin to perform. However, there are mixing (also known as tumbling) services which are effectively giant money cleaning services - not necessarily for illegal purposes (although clearly good for that). If enough people use a mixing or tumbling service, and that service doesn't keep records (a very key point) then you can have near-perfect anonymity. Other cryptocurrencies attempt a similar thing built into the way they work - Zcash and Monero being two examples.
So anyone claiming that the NSA is tracking everyone using Bitcoin should know that it is actually possible to use cryptocurrencies without being traced. The NSA can watch people who don't put much effort into being anonymous, but if you truly want to hide then it's definitely possible. Where you can catch bad people doing this is on the standard currency side of things, i.e. when someone is suddenly living above the means they can afford according to their tax returns, or has giant lump sums of money appearing in their accounts from currency exchanges etc.
People have forgotten how to say "i don't know" for example Lets say i ask a person "You think we'll ever get to Mars" he will reply "not in a thousand years" then i will ask what do you base you answer on do you have knowledge on aerospace engineering , space flight he say no well but I have a right do my opinion. Better be honest and say I don't know.
Most of us live in a free country and yes you should have the right do your opinion you can think the craziest thoughts you want, You should just never be responsible for creating legislation.
Legislation should be based on objective truths not in some belief system.
(I'm trying not to react to texts about "corrupt banks" etc. You can call me old or something.)Behind a fiat money you have a state. The fundament for stability of currency is the constant amount of it. When a state decides to change the amount of money, it always has a great impact on its value. But it's still way more stable than cryptocurrencies.
Also banks mentioned by @remixedcat have nothing to do with stability of a currency in long term. They trade it, which can lead to temporary changes in quote - true. But now they can also trade cryptocurrencies (and they do), so there is no difference in this aspect.
From a financial point of view, the main issue with cryptocurrencies is that there is no control over the amount. Yes, a single currency is limited by the algorithm, but you can create many of them. As long as they hook up miners, they quickly become mainstream.
Some say the total amount of cryptocurrencies is limited by the mining potential and it is more or less true. But estimates are all based on assumptions about the total hashing power in the system. Will these assumptions hold when everyone starts to mine at home? When companies start to make GPUs purely for mining? When people no longer buy a single GPU for gaming, but 4-5? :-)
But you can suggest a documentary if you wish. If it's not an obvious conspiracy theory movie, I might as well give it a go. :-D
But putting financial aspect aside (I assume this is not a topic many here will agree with me), I still find the anonymity to be an issue.
And of course I'm not a huge fan of pointless electricity wasting, but - to be honest - I'm not a huge fan of gaming PCs that use 1000W as well. I mean: 15 years ago a PC drawing 100W was fine for gaming at a standard resolution of the period (e.g. 1024 x 768).
And not surprisingly: today you can easily build a PC for 1080p gaming that'll draw 100-150W. You think banks manipulate people? Look how computer stuff manufacturers convince gamers that they need 600W monsters. :-D
Its not "real" just created by the bankers.
everyone owes everyone.. a huge merry go round of debt repayments.. all it takes to go pop is one large default which could be a bank or a government and the chain is broken.. apart from showing a lack of faith in government money i aint entirely sure how crypto currency fits in with the overall financial scheme of things but i find its rapidly increase in value a bit scary.. he he
trog
...probably shouldnt insult the guy anyway.
Yes, everyone borrow from everyone. And it's also true that they might never pay back.
But they pay the interest and this results in a cashflow between countries and institutions. This actually makes the financial system... a system - rather than a group of highly separated entities - which bring stability to the financial world (to go in part with trade- also greatly globalized since we dumped representation money).
Also, while I can agree that financial system is not perfect, aren't we actually comparing state currencies to virtual ones? so do you think the surge of BTC this year is OK? Or what happened to VTC yesterday (+50%)? :-)
so far its all held together by artificially low interest rates which initially were supposed to be a short term measure but cant be "normalized" because any increase in interest rates would make the debt repayments impossible..
i think the rise in crypto currencies is just part of the coming financial collapse.. or a sign of it.. i was looking at a short interview with jim rogers last night.. when ask when the collapse was coming he simply said later this year or next year.. these guys dont like being firm on the "when" but he was about as firm as he could be..
the stock market is massively over valued.. in a bubble so to speak.. money is borrowed for next to nothing and its all pumped into the stock market.. the market keeps going up come what may.. governments print money to buy back their own debt and keep their bond prices up and companies borrow easy money to buy back their own shares and keep the share prices up.. none of its real any more.. :)
trog