Will Nvidia GPUs for Mining Help Players Get an RTX 3080?

The first signs are not encouraging.

It’s no secret that it’s almost impossible to find a new generation graphics card today, from the modest Nvidia GeForce RTX 3060 or AMD Radeon RX 6700 XT to the most powerful and expensive ones like the Nvidia GeForce RTX 3080, Nvidia GeForce RTX 3090 and AMD Radeon RX 6900 XT.

Without a doubt, the main problem is buying up on eBay and other sites – or sneaky speculators, according to desperate players, who have been wanting to upgrade their computers for almost a year. Entire teams of resellers have been formed, buying up every available video card, using bots and other means to take over the market for video cards that are in unprecedented demand.

The problem is exacerbated by the fact that components such as video memory and semiconductors are experiencing supply constraints, causing a shortage of components needed to produce more video cards and meet demand. And since these parts are needed everywhere, from the production of video cards to game consoles, yes, even cars, the problem is much larger than video cards.

As if a perfect supply storm wasn’t enough, with the latest graphics cards hitting the market in the fall and winter of 2020, Ethereum and Bitcoin prices skyrocketed. Whether it was the result of new and powerful graphics cards hitting the market or just an unfortunate moment, in any case, the demand for video cards of all stripes began to grow, as cryptocurrency was devoured by everything that came across.

As the profitability of cryptocurrency mining skyrocketed, many miners were willing to pay the markup charged by Internet resellers, as long as the final profit formula remained positive. How actively the problem of outbids intersects with cryptocurrency mining is not clear even at Nvidia, but unlike other problems, mining is a problem that Nvidia is trying to solve directly.

The question is whether the company’s solution with its dedicated cryptocurrency mining graphics cards (CMP), designed to reduce the demand for custom Ampere graphics cards, will be enough to get the latter to the gamers who need them.

Unfortunately, recent reports with leaked specs from one of the new CMP graphics cards aren’t very encouraging.

(Image credit: Zotac)

HASHING PROFIT FROM VIDEO CARDS

To understand why Nvidia’s CMP seems like a mediocre solution, we’ll compare the new graphics cards from Nvidia and AMD, and then see how well they do in Ethereum mining. To simplify, we will use dollars for comparison, since the difference in this case is the difference between the cards, which will vary in different cryptocurrencies.

We are also targeting Ethereum rather than Bitcoin as ETH is the cryptocurrency that is currently “thriving” and attracting the most influence from miners, especially newbies.

Without going into details about how cryptocurrency mining works, what matters is the very formula that cryptominers use to determine whether it is worth buying a graphics card for cryptocurrency mining or not. The formula is simple, the math is not particularly difficult, but to save you from reading a bunch of equations, we use a calculator CryptoCompare Ethereum Mining Profitability.

There are a lot of variable variables in a mining environment, including power consumption, hashrate (measured in megahash per second or MH/s), and ETH price, so we’ll have to nail a few variables to the wall and focus on hashrate. Power consumption will remain the same as stated in the specifications of the graphics card, and we are also using the current rate of $0.111724 per hour. Our calculations don’t factor in the price of a graphics card when determining profitability, but we’ll come back to that in a moment.

With all the limitations, we look at the specifications of the Nvidia CMP and calculate the approximate profit based on known variables. Starting from the bottom, the Nvidia 30HX has a hash rate of 26 Mh/s, the 40HX has a hash rate of 36 Mh/s, the 50HX has a hash rate of 45 Mh/s, and the 90HX has a CMP limit of 90 Mh/s.

Based on our calculations, GPUs are mining $1.94, $2.65, $3.26 and $7 per day at current ETH prices. Of all the currently available Ampere or Radeon RX 6000 graphics cards, only the hash-limited RTX 3060 has a profitability below the CMP of $1.47 per day. Disable the hash rate limiter, which miners have already learned to do, after which the profitability of the 3060 will jump to $3.47 per day, which remains the lowest profitability among the next generation video cards, but more than all other CMP video cards, except for the 90HX.

The 90HX’s profitability of $7.00 surpasses that of all consumer graphics cards except for the RTX 3090, which makes $9.71 per day. The rest of the graphics cards are somewhere in between, with the RTX 3060 Ti earning $4.53, the RTX 3070 earning $4.66, and the RTX 3080 earning $6.83 per day. AMD Radeon RX 6700 XT earns $3.61 per day, RX 6800 earns $4.43 per day, and RX 6800 XT and RX 6900 XT earn $5.19 per day.

Ultimately, the only CMP graphics card that can impact next-generation consumer graphics card demand, relying on profitability, is the 90HX, which will remain unavailable for a few more months. Good is not enough.

(Image credit: Puget Systems)

Why GPUs for mining won’t affect the number of GPUs?

Earlier this month, a group of smugglers in Hong Kong lost a shipment of 30HX CMPs confiscated by customs officials, the first time anyone has actually seen these graphics cards in the wild. How the smugglers got video cards is an open question, because they are not on sale.

The only time we saw the CMP for sale was at the Microless store in the UAE, where the cards briefly sold for $723 before the page was taken down. The overpricing of RTX and RX graphics cards is monstrous today, which is why you can’t get RTX 3060 at RRP of $329 (25000r + VAT), graphics cards from OEM partners are slightly more expensive at RRP, but in the market you will find them at double and triple the price. And with the ability to unlock the hash limiter, the RTX 3060 will remain at its peak price point for an extended period of time even if the price of ETH drops.

The problem continues to escalate as you move on to expensive graphics cards. If prices for the 40HX, 50HX, and 90HX remain roughly proportional to the 30HX, graphics cards will not only remain unprofitable, they will not be resold. At least the RTX 3090 can be resold to desperate gamers on eBay. If the price of ETH falls, no one will want to buy the CMP version.

The 30HX smuggling case also does not indicate the introduction of these graphics cards into the cryptocurrency mining operations that today gather all the graphics cards on Earth around them. In fact, this only indicates that even large miners cannot find graphics cards, turning to RTX 3000 laptops to fill the gap, even a few hundred CMP graphics cards will be better than nothing, especially if they “fell out of the shipping container, before leaving the port of Hong Kong.

All this indicates that CMP versions will not be a replacement for RTX, they are the last resort for miners and large-scale cryptocurrency mining operations. This means that these graphics cards will be replaced first of all by new and affordable RTX or RX.

In the end, the only scenario in which the mining of cryptocurrencies will stop buying up all the video cards of gamers to whom they were originally intended is the solution of all problems at once. The crypto boom should fail, EHT and BTC prices should fall, after which we will see an excess of video cards on eBay and other sites where miners will try to recoup what they spent, because they bought video cards at an inflated price. We hope that this will put an end to the resellers who buy new video cards without leaving users a chance to get one of them.