Early Vega mining results might mean miners will buy them all

Finding stock of graphics cards in South Africa (and the rest of the world) at reasonable prices has been quite a mission of late. Ever since the price of Bitcoin and Ethereum started soaring, miners have found it extremely lucrative to buy into the cryptocurrency’s expansion by mining it with graphics cards connected via massive farms. It’s gotten so bad that you can’t even walk into a store expecting to buy a GTX 1080 anymore. Last month I warned that AMD’s Radeon RX Vega GPU – their upcoming next-generation flagship line – might be susceptible to shortages thanks to GPU farms picking up the card. Following news that AMD is adding special instructions to cater for hashing and blockchain technologies, it should come as no shock to anyone that these cards have been found to be obscenely good for coin mining.

According to Overclockers UK owner Mark Proudfoot, who posts as “Gibbo” on the forums, there is a serious risk that Vega is going to be sold out to miners in no time at all. A source (who works at one of the major GPU vendors) divulged to Gibbo under condition of anonymity that tests coming out of their performance labs showed RX Vega pushing between 70-100MH/s (megahashes per second, which translates to one million hash attempts per second).

For comparison, NVIDIA’s GeForce GTX 1080 pulls in about 27MH/s for Ethereum mining, while the GTX 1080 Ti tops out at 35MH/s. That means AMD has a GPU launching soon that is the same price as a GTX 1080, but outperforms it by a factor of 3 in mining. It’s apparently faster than two GTX 1070s in SLI.

I’m more inclined to believe these numbers than those reported for frame rates in games, because if Vega does really well for coin mining, we’re going to see another drought hit the high-end GPU market soon. Once miners move to Vega, we’re going to have a flood of used GTX 1080 Tis and GTX 1070s hitting the market to compensate for the increased cost, and prices for new, hardly used cards will go through the roof. There’s also the possibility that the Radeon Vega Frontier Edition cards won’t receive similar mining optimisations in their drivers, because AMD actually wants to keep those cards aside for traditional use.

As a reminder, some early pricing for RX Vega puts it around the R17,000 mark. Using the NiceHash calculator to figure out possible earnings at the current difficulty, one RX Vega GPU mining Ethereum for the NiceHash pool might pay for itself in about four months, and over the course of a year at the current difficulty, might bring in around $1,900, which is approximately R25,000 at today’s trading rates. If the current difficulty scale doesn’t move for the next four months, then we can expect miners to pick up RX Vegas at launch, mine for four months straight, and then sell the cards for about 70% of what they paid for it, earning them a fat profit after costs are deducted for electricity.

The conspiracy theories coming out of the woodwork regarding this vary from extremes of “AMD planned this early on”, to “maybe NVIDIA is telling people to say this to allow them to corner the gaming market”, and to me it’s the former rumour that sounds closest to the truth. AMD sees no growth driver in GPU mining because it’s a market they can’t predict well in advance, but it’s a market they can profit from in the short term. If there’s scores of demand for their cards at full price, AMD has an outlet to push more cards to a growing market and clear out their inventory on schedule. All that’s needed is driver optimisations for miners to increase their profitability.

Of course, that doesn’t help us, the gamers, who’ll be trying to purchase these cards at the same time, but hopefully AMD’s reveal that they delayed the launch to build up stock means that there’ll be a healthy supply for everyone.