Surprisingly, mining in Germany is experiencing a revival after being declared dead due to high energy prices. The result is that most hardware dealers run out of suitable GPUs – like everywhere else in the world. There just doesn’t seem to be enough equipment to meet miners’ demand.
For many years everyone was certain that mining in Germany was more or less dead. It was no longer profitable because of the energy prices, which are among the highest in the world. If the people here were still mining, they did it because they got cheap energy.
Today, however, mining seems to be experiencing a revival in Germany. In the most important German forum for virtual currencies, coinforum.de, many threads on the subject of mining have surfaced in the last few weeks. Usually one wonders which software should be used for mining, which graphics cards are best suited and how to build a so-called “rig”, a mining system with several GPUs (graphics cards).
Mining is back. Chris from Bitcoin-Live, a longtime German miner, jokes that if the trend continues in Germany, China will soon overtake China as the world’s leading mining location. But only a few miners use Asics to search for bitcoins. Most use graphics cards instead to find Ether or Monero, the two largest acid-resistant coins.
One reason for the unexpected comeback of mining could be that it is no longer recognized as just an obscure use of hardware, but more and more as something everyday. GPU mining is the subject of regular reports in popular magazines such as PC Magazine or PC Games, and retailer Caseking advertises some of its products saying that it is perfect for mining.
The most important reason, however, is that mining has simply become profitable again.
Yes you will make a profit. At least for now.
It is not rocket science to calculate the profitability of mining. On the one hand, you have the cost of your rig and the energy. On the other hand, you have the revenue.
Chris from Bitcoin-Live demonstrates with a simple example that mining Ethereum can be profitable. A rig priced at 800 euros produces 45 megahash in one second and consumes 350 watts. At 29 cents ($ 0.33) for a kilowatt hour, the rig costs € 2.44 ($ 2.79) per day, but creates ether worth € 6.35 ($ 7.25). After almost seven months of operation, the system is paid off. Then it makes a daily profit until broken.
This bill gets even better if you get your energy cheaper, be it through your own generation or through industry tariffs. However, you need to take into account that the hash rate, especially Ethereum, is increasing rapidly.
Mining is a zero-sum game. Individual sales decrease when more people participate. Hence, mining will always be a marginal cost business in the long run; it is only profitable if the costs for hardware and energy are kept as low as possible. Because of this, in places with high energy prices like Germany, hobby mining is doomed to die and migrate to places with low energy prices. This process could be perfectly observed in Bitcoin mining.
So – why is it different this time? Why is Germany dismantling again despite the poor conditions? We will find the answer to this question in an amazing observation.
There just aren’t enough graphics cards in the world
Usually the difficulty of mining adapts to the price. When the price of a cryptocurrency goes up, more people mine it. This increases the hash rate and thus the difficulty of mining. The system will always find a balance that will reduce mining profitability to a very small margin.
At the moment, however, that balance seems to be lost. Let’s look at Ethereum. Since mid-February, the price of an ether has risen from USD 18 to just over USD 400 at its peak. It is multiplied by a factor greater than 20.Now let’s look at the difficulty. It also rose, but only from 120 to 900, which is a factor of 7.5. The values vary slightly if you change the observation time – but there is no avoiding the realization that the level of difficulty does not catch up with the price.
The amazing conclusion must be; There aren’t enough graphics cards in the world to match the mining difficulty with the price. A look at the availability of the most popular cards for mining confirms this.
Bitcoin-Live keeps a list of the most suitable graphics cards for mining. For a long time these were mostly cards from the AMD Radeon series, such as the RX 580 and 480. These models have developed into the yetis of computer hardware: everyone suspects they exist, but nobody has seen them. If you browse Amazon and the popular German computer shops in Germany, you will find that these cards are sold out almost everywhere. Most stores don’t even give a date when they can ship it again.
The perspectives are a bit better if you look at cards from Nvidia. For a long time, Nvidia’s products were unsuitable for mining, but since the GTX 1060 series, Nvidia has caught up with AMD. Rumor has it that the company took mining into account when developing the new series.
Graphics cards are only part of the problem, however. Chris from Bitcoin-Live explains:
“Regardless of whether you are looking for a GPU, a power supply unit, a small CPU or a mainboard with four or six PCIe ports – it is damn hard to find something suitable.”
Especially if you want to build large rigs, you will have massive difficulties finding hardware such as the rare 1000 watt power supply.
Traders raise prices, gamblers get angry
The big dealers in computer hardware have already responded to the increased demand. Chris says, “Often times you can only order two or three graphics cards for each delivery address. The hardware dealers try to protect their ‘normal’ customers. “
The non-mining users of graphics cards, such as gamers, have often become angry with the miners. For example, if you look at the comments on some YouTube videos, you will find harsh words against it: “So you the asshole who buys the whole GPU …” or “Fuck you dude, you are the reason why people do these things cannot buy for their systems. “
Some traders also raised the price of mining hardware. Partly, as Chris says, drastically. “Some go so far that I would call it moon prices or usury. Especially when we talk about power supplies. “
And that’s only the case in Germany. In some other countries it seems even more drastic. For example in Russia. Mining is so widespread here that the local markets have long since reached a total shortage of graphics cards. More and more Russians living abroad began to get involved in importing graphics cards to Russia, a business that suddenly became surprisingly profitable. Bitcoin.com reports:
“It has been reported that many Russian miners are able to earn up to twice the average monthly wage offered in the labor market, creating a huge demand for local mining equipment. Local media has reported that the number of Russians mining cryptocurrency has increased by 500 to 700 percent, leaving many GPU retailers unable to meet demand. Since consumers are buying hundreds of graphics cards, retailers have responded with price increases of up to 80 percent. “
There are similar reports for South Africa, where magazines report a lack of graphics cards suitable for mining. Even in the US, it’s nearly impossible for a motherboard writer to get their hands on good graphics cards to try out Ethereum mining.
The world, it seems, just doesn’t have enough graphics cards to meet the demand of all miners.
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