How mining has affected component prices

Cryptocurrency mining is the process in which miners use computing power (hashing) to process transactions and obtain rewards, in this case, cryptocurrencies.

In other words, it is the process of recording blockchain transactions to obtain a cryptocurrency. However, to achieve this, a powerful computer is needed to be able to process large amounts of data, miners acquire high-end GPUs (graphic cards) and CPUs (Central Processor) to start mining.

Due to the constant increase in the value of cryptocurrencies many companies and organizations have opted to start mining which has caused the prices of graphics cards to double and many of them even run out of stock. An example of this was the new RTX 3000 series GPU that was introduced in November 2020 which in just one month was no longer available.

However, the price of the components has dropped in recent months due to the Chinese government banning bitcoin mining which caused mining groups such as HashCow or BTC.TOP suspended its operations in China which caused the fall of bitcoin which in turn lowered the demand for components for this activity. Let’s remember that China is responsible for 65% of bitcoin production worldwide.

Experts in the field believe that this is temporary since companies are considering moving to other countries to continue their mining activity and in turn, the value of bitcoin has started to rise again as well as other cryptocurrencies, which could cause the prices of components to increase again and its stock to decrease making it more difficult to obtain. Thus affecting other sectors that need this technology.