News Gamers Rejoice! Ethereum Reminds GPU Miners the End Is Near

[Endymio]

It had nothing to do with crypto. I was just saying that the economic system in general is already a house of cards. Most of the money in circulation today is debt rather than capital. With most transactions done by electronic bank account, the amount of money in circulation already isn't limited by what gets printed by federal banks.

Money in circulation is defined as M0. What you describe is a broader empirical measure known as M3. The two, however, are not disconnected as you imply.

 

[InvalidError]

These are not minor points. Once again: neither short selling, nor option trading in general, harms the companies involved. Nor does it harm "small investors". Unless you're attempting to bet on short-term market fluctuations, you're not affected by such transactions. Options trading increases overall liquidity and helps to signal longer-term price shifts: both benefits to the market at large.

Only when the market is operating normally. The AMC/Gamestop short-trading over-leveraged downhill wasn't built in one day, it was only made possible by AMC/Gamestop stocks being mostly abandoned, enabling a few players to control the market and manipulate the stock price until their dirty secret was exposed.

 

[Endymio]

...AMC/Gamestop stocks [were] mostly abandoned, enabling a few players to control the market and manipulate the stock price until their dirty secret was exposed.

It was neither dirty nor a secret: being widely taught in all college finance courses, as well as countless basic books on options investing. Nor was it "dirty", as neither the companies involved nor long-term investors were negatively affected in any manner. The only person affected by those making short-term bets on share price declines are those conversely betting on short-term increases.

Finally, the downward pressure on AMC and Gamestop stocks has nothing to do with Byzantine hedge-fund driven investment tactics. It's far simpler. Most of America has their own home theatre, and they purchase their video games online, or stream them directly. It isn't rocket science to see that corporations based heavily on large mall presences either need to adapt or die.

 

[jacob249358]

Several large errors here. First, lowering a company's share price does not "bankrupt" it, nor indeed affect its financial statement directly in any manner. It may potentially lower its ability to borrow money against its own shares, but that's about it. Secondly, the cycle you describe has zero long-term effect on share price. Third, the short seller in question is not "buying those shares back". In an uncovered short, the seller does not own the underlying instrument. If the call is exercised, the seller purchases the stock for the first time. Fourth, if the seller in question bets wrongly, they lose their bet. The notion that any seller can repeatedly and reliably "force" short positions to be profitable is entirely mistaken.

These are not minor points. Once again: neither short selling, nor option trading in general, harms the companies involved. Nor does it harm "small investors". Unless you're attempting to bet on short-term market fluctuations, you're not affected by such transactions. Options trading increases overall liquidity and helps to signal longer-term price shifts: both benefits to the market at large.

I'm 15 so if I'm using wrong terms and stuff please excuse it. ok, so everyone knows (hopefully) when there are more sellers than buyers stonks go down and vice versa. So what companies or hedge funds (whatever that is) do is sell the stock and then it goes down then they buy it back at a low price and sell it when it gets expensive again. And you said lowering the share doesn't affect the financial statement. I'm pretty sure it does. maybe. I know that people did this with cryptos too. If I'm talking about the wrong thing though ill just stop. but i think i agree with @InvalidError and he's been here since my first birthday so I'm not gonna try and scuffle with him

 

[Endymio]

I'm 15 so if I'm using wrong terms and stuff please excuse it....

Terminology is less important than understanding; don't worry about it.

... ok, so everyone knows (hopefully) when there are more sellers than buyers stonks go down and vice versa. So what companies or hedge funds (whatever that is) do is sell the stock and then it goes down then they buy it back at a low price

Short sellers do not sell the stock directly. What they sell is an option for someone else to purchase the stock at some future point in time, at the so-called "strike price". If the stock never reaches that price, the short seller pockets free money for doing nothing. If the stock hits that price, though, the buyer exercises the option, and the short seller loses money. If the stock goes substantially over that price, the short seller loses a lot of money, as they must purchase shares at a very high price, then sell them at a loss to the buyer.

(edit: I'm describing the more common naked call short here. The complexities of put options don't change the underlying argument however).

you said lowering the share doesn't affect the financial statement. I'm pretty sure it does. maybe.... i think i agree with @InvalidError and he's been here since my first birthday so I'm not gonna try and scuffle with him

The nice thing about facts is that they aren't democratic. They're either true or false, no matter who believes in them. A company owns assets: money in the bank, inventory, real property and equipment, and debts owed to them (usually in form of accounts receivable, but can take many other forms as well). The total value of these assets (minus any liabilities) is the company's net worth. (Sometimes called the book value.) If the net worth is zero or negative, the company is bankrupt.

The total value of a company's stock shares is the company's market capitalization ("market cap"). This is a figure almost always higher than the company's net worth, but can in certain cases be lower (which makes it ripe for a takeover or breakup attempt.) Changes to a company's market cap in no way affect the value of a company's assets, and thus do not affect its net worth.

 

[hotaru.hino]

Most gamers refuse to buy at these prices. Demand is very low among gamers. If you remove the incentive of profit from miners by the purchase of these cards, demand will plummet because the investment is not worthwhile. Prices will drop because there is some supply, but the supply is taken by those looking NOT to scalp, but to invest.

EVGA just released a bunch on queue. I got one. Checked ebay/hardwareswap etc, lots of people flipping those for easy money, because it is. Those go not to gamers, because hardly anyone wants to drop $1800 or $1600 on a 3080 unless you can afford it anyway, but someone considering them an investment and not a consumer product WILL in fact spend that money if they believe the risk is worthwhile.

And the current prices don't reflect what prices were before the mining boom. Again, even before the mining boom, scalpers were all over the cards for the first few months during the initial ramp up. While I don't recall waiting too long to get a GTX 980, I did have to wait a while to get a GTX 1080. And even then, moments after I placed an order after receiving an email confirmation it was in stock, it was sold out.

I mean, you don't even have to look at video cards to see that scalpers will pick up anything that people want. Look at consoles. The PlayStation 5 sold more units in its first year than the PlayStation 4, but it's damn near impossible to find a PlayStation 5 still.

 

[Co BIY]

New coins are emerging all the time and once eth is no longer available for mining, pple will mine something else. Then simply just push up the value is its profitable....

This is the reason I believe all current alt coins are overvalued in the extreme and that the idea of any scarcity in the realm of e-currencies is a fantasy.

There are minuscule barriers to entry and no limitations to endlessly equivalent products. (The opposite is true of GPU dependent products.)

It's like investing in cat videos, wildly popular, but why would I pay for them, anyone can make and distribute them for next to nothing.

 

[InvalidError]

There are minuscule barriers to entry and no limitations to endlessly equivalent products.

There is a limit: you can only create so many meme coins before enough people get burnt and learn to stay away the hard way.

 

[Alvar "Miles" Udell]

Will GPUs Get Cheap After Ethereum Ends GPU Mining? Unfortunately, It Depends (wccftech.com)

 

[hotaru.hino]

This is the reason I believe all current alt coins are overvalued in the extreme and that the idea of any scarcity in the realm of e-currencies is a fantasy.

There are minuscule barriers to entry and no limitations to endlessly equivalent products. (The opposite is true of GPU dependent products.)

It's like investing in cat videos, wildly popular, but why would I pay for them, anyone can make and distribute them for next to nothing.

Even when a cryptocurrency takes off, there's the problem that it's inherently deflationary. Nobody wants to spend them because its value supposedly increases over time. Which is kind of what you don't want if you want a healthy economy.

 

[TJ Hooker]

Short sellers do not sell the stock directly. What they sell is an option for someone else to purchase the stock at some future point in time, at the so-called "strike price".

Short selling doesn't inherently mean writing options. In general, it typically refers to selling (borrowed) shares, unless specificied otherwise. At least in my experience.

 

[Endymio]

Even when a cryptocurrency takes off, there's the problem that it's inherently deflationary. Nobody wants to spend them because its value supposedly increases over time. Which is kind of what you don't want if you want a healthy economy.

The behaviour you describe reduces money velocity; it does not, however, create deflationary pressure; quite the opposite, in fact. If price increases over time, people hold the commodity in question, reducing supply and further increasing price.

 

[Endymio]

Short selling doesn't inherently mean writing options. In general, it typically refers to selling (borrowed) shares, unless specificied otherwise.

Sure. In practice though, physical short selling generally occurs through a broker, who generally covers the position through an option or other form of derivative.

 

[desertsweeper]

Amazing. This is such a good idea. I wonder why they did not do this long ago... oh wait... they have been trying for how many years now? Yawn

 

[DavidC1]

Will GPUs Get Cheap After Ethereum Ends GPU Mining? Unfortunately, It Depends (wccftech.com)

Again, they are so focused on mining being the only impact. The whole semi industry is impacted by this. If you are into electronics you will notice getting components are more expensive and have ridiculous lead times.

It's not just electronics. Food prices are going up. Heck prices of puppies have been jumping.

And what I mean by authoritarian response is they are using the excuse of a flu like virus to panic everyone. So lockdowns affect supply chains and this year they are firing everyone that's doesn't do what mommy government says, which makes it worse.

That's the real reason. If Eth 2.0 goes online it might lower it for a short while, but that does nothing to loss of productivity and loss of workers. If you think gamer demand is negligible, why are video card prices up across the board? You can't mine worth crap with GTX 9xx.

 

[InvalidError]

Again, they are so focused on mining being the only impact. The whole semi industry is impacted by this. If you are into electronics you will notice getting components are more expensive and have ridiculous lead times.

Many of the same components are use across multiple industries from gaming mice through automotive and personal massagers. The same integrated power stages used in motherboard VRMs may also be used to drive 12V stepper motors, 12V solenoids, brushless motors and other stuff. The same multi-phase multi-rail VRM chips may also be used for stuff besides GPUs and CPUs. All high-speed ASICs need boatloads of surface-mount capacitors, most ASICs also require memory of one kind or another which is all made by the same handful of manufacturers using the same processes for all current-gen memory.

If ETC goes proof-of-stake, millions of mining GPUs may end up on the used market (the global ETC hash rate is roughly equivalent to 30 million RX580s), which could cause a drastic reduction in new-in-box GPU sales, freeing up related support components and upstream fab capacity for other uses.

If you think gamer demand is negligible, why are video card prices up across the board? You can't mine worth crap with GTX 9xx.

GPU prices are up across the board because most sane people don't want to upgrade in the middle of an insane price bubble and are holding on to whatever they already have, so the used market replicates the exact same thing that happens with new GPUs: high demand for GPUs of any description just to get going and no supply because most people who have one they'd like to upgrade but cannot are laying flat.

Why are Nvidia, AMD and Intel releasing their low-end GPUs early next year? Because they want to get ahead of the ETC used GPU glut. The RTX3050Ti will likely get a $300 street price and that will be a pretty tough pill to swallow if you can get a used mining RTX3060 for $200.

 

[Sleepy_Hollowed]

I'll wait until I see it. Not only has this been promised and not delivered for a while, leading me to think that it will forever be "right around the corner", but it also won't do much due to the other crypto-currencies out there that use mining.

I'd be happy to be proven wrong, but I'm betting on a specific track record.

 

[xxyyzz666]

They can move to other coins, but other coins don't have the value ETH does and there will be a displacement of a petahash of power turned over to less valuable coins which will, in turn, make them less profitable to mine. All in all, it's a very good step I think to help ease the demand. Anything could happen though.

If you are a "small" miner the rediculous gas fees for eth at payout seriously cut into profit to the point you are better mining something else overall.

I mean like 1-8 cards, you are looking at 30-40 cards before this goes away unless you want to waiy months between payouts.

 

[Lordadus]

I'm just a casual observer, but if you remove the energy hog of Proof Of Work (POW) and replace it with a more efficient Proof Of State (POS) technology, it raises 2 big questions in my mind:

1. Would hackers still have to spend the incredible amount of energy required (e.g. 51% of the network) to hack the blockchain?
2. Would the "perceived" value of the crypto-coin remain as high if the amount of effort (energy) required to add to the blockchain goes down? No huge energy requirement = no huge perceived value.

My thoughts may be the equivalent of thinking like a 3 year old, but taking a step back and looking at the big picture isn't a bad idea.

1.You would have to own 51% of all ETH to do that, which is pretty much impossible
2.Not really, ETH's value doesn't come from the energy it costs to run the network, it comes from the uses that the network has, such as NFTs, and of course the speculative nature of cryptos

 

[husker]

As another poster pointed out, the PoS model changes your point 1 objection from "incredible amount of energy" to "incredible amount of money".

As for objection 2, the value of crypto -- and indeed all currencies in general -- derives not from the energy required to mint them, but from their scarcity. It takes very little energy to print a $100 bill. If the government engaged in no restraint in printing them, they'd be utterly worthless. (and soon very well may be).

Makes sense and thank you.