Ethereum’s PoS upgrade will decrease the graphic card demand according to NVIDIA reports, with discussions over the future of GPU mining sweeping over the mining community as we can see more in our latest Ethereum news.
If EIP-1559 fails to bring down the ETH high transaction costs and drive Ethereum mining obsolete, the move to a proof of stake will most certainly do. While these thoughts are a dime a dozen these days with graphic card manufacturers like Nvidia have yet to address these concerns at least until now. In the earnings call, Nvidia warned the investors that Ethereum 2.0 will result in reduced demand for the graphic cards and as for the results, the manufacturer reported a huge earnings beat of 84% yearly growth in revenue and 106% growth in the gaming segment including graphic card sales. The company also said that the gaming revenues totaled $2.76 billion for the quarter and this was all because of the demand for GPUs by miners. Nvidia CFO Colette Kress said:
“Gaming revenue was up 106 percent from a year ago and up 11 percent sequentially, reflecting higher sales in GeForce GPUs, with both desktop and laptop setting records, as well as in game-console SOCs We continued to benefit from strong sales of our GeForce RTXTM 30 Series based on the NVIDIA Ampere architecture. We believe Gaming also benefited from cryptocurrency mining demand.”
Nvidia noted in its recent SEC filing that the GPU demand could fluctuate based on the changes of the crypto mining landscape:
“Demand and use of GPUs for cryptocurrency has fluctuated in the past and is likely to continue to change quickly. Volatility in the cryptocurrency market, including changes in the prices of cryptocurrencies, can impact demand for our products and our ability to estimate demand for our products.”
The company also outlined how the reduced profitability of GPU mining from Ethereum 2.0 could cause a flood on resales and with the ongoing semiconductor shortage, the latest 3000 series were sold out almost instantly across the world. This led to prices for the signature models to command double the MSRP from the private vendors and during the flash crash, Ethereum mining profitability surged to the highest point in 3 years which eventually led to GPU prices surging.
With Ethereum’s PoS upgrade there is a chance of slowing down the demand for mining chips.
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