Will graphics card prices drop after mining disaster? Don’t dream.

This mining accident is not the same as that mining accident. The mining accident we are talking about today is a phenomenon that the "mining industry" collectively collapsed due to the sharp drop in the price of virtual currency. The first mining accident is not far away from us. It was the first one in 2002... Oh no, it was in 2014 when many foreign exchanges jointly manipulated the price of Bitcoin, and the largest trading platform Mt.Gox then ran away, causing Bitcoin to be cut in half overnight, quickly falling from the high point of $1,000 that year to less than $500. Overnight, those who entered the market in the middle and took over at the high point jumped off the building, and those who wrote suicide notes wrote suicide notes.

That’s not all. After the price of Bitcoin dropped by half, it continued to drop to $200 in 2015, and the price of virtual currency remained very stable until the beginning of 2017. Bitcoin transfer is very simple, as long as you have the other party’s wallet address, no verification is required, but to actually exchange virtual currency for cash requires a trading institution. At that time, governments of all countries kept a wait-and-see attitude towards virtual currency, to see what would happen if it was allowed to develop.

Therefore, at that time, Mt.Gox only had the "largest trading platform" as its credit endorsement. It can be said that apart from the two words "largest", its credit is worthless. At that time, Mt.Gox's escape exacerbated the decline in people's trust in Bitcoin. Speculators quickly sold off and left the market, leading to the mining accident.

Bitcoin skyrocketed and gave birth to a bunch of offspring?

With the occurrence of major international events, such as Brexit and Trump's election as president, a large amount of capital has nowhere to go due to various reasons, so it has set its sights on virtual currencies, which are almost at a record low. Bitcoin's application and trading system are relatively mature, so capital has chosen it.

The number of virtual currencies continues to increase

Then Ethereum rushed into the virtual currency market with a brand new concept. The white paper said it was great and would make various contributions to the network. However, to this day, there is still no application of Ethereum-based technology, except for Ethereum. Now the market value of Ethereum is second only to Bitcoin, or it can be said to be the second largest bubble in the virtual currency market.

The virtual currency market bubble is too serious

Later, due to the conflict between the interests of miners and Bitcoin developers, Bitcoin forked prematurely, which seemed to give some people with ulterior motives some opportunities. Precisely because the source code of Bitcoin is open, many people with beautiful white papers entered the virtual currency market at one time.

To be frank, even the author can easily create a virtual currency, such as MLGB (Malig Coin), as long as you can write a white paper that fools everyone and describes the great prospects and future of this technology, and then enter the ICO, and then instruct the leeks to exchange it with more valuable virtual currency, and the developers will cash out the valuable coins. This is the routine to make money.

New coins can release a certain amount of currency into the market at the time of their initial launch. For example, I set the total amount of Maleg coins to 1E, and put 20 million coins into the market. The remaining 80 million will need to be mined by miners. What will they use? Of course, graphics cards.

Even if Bitcoin falls, there are still altcoins

In fact, using graphics cards to mine altcoins is more profitable than mining Bitcoin or Ethereum. Even if the mainstream currencies collapse, where can the altcoins that are less than a cent each fall?

At present, apart from Bitcoin and Litecoin, there are not many currencies with dedicated chip mining machines. Graphics cards are still needed for mining, so graphics card mining is still the main force. In addition, many people and the media make alarmist remarks every day, saying that if Bitcoin falls, graphics cards will drop in price, which is pure wishful thinking.

Virtual currency also relies on a variety of mining machines for support

You should know that a GTX1080Ti can only earn one cent if it mines Bitcoin for a month! The real use of graphics cards is for non-professional chip mining machines. The saying that the sharp drop in Bitcoin will cause graphics card prices to drop actually comes from the fact that the rise and fall of Bitcoin prices can be seen as a weather vane for other currencies. Industry-related trends will be reflected in the rise and fall of Bitcoin. Other currencies are based on the concept of Bitcoin, so just looking at Bitcoin is enough to understand the situation of the entire mining industry, but everyone must not be misled by those half-baked people to think that graphics cards are used to mine Bitcoin. This is an extremely amateur and irresponsible statement.

Inflation, exchange rates and rising raw material prices

Inflation happens every year, and coupled with exchange rate fluctuations and other reasons, the board of directors will certainly not sit idly by and watch money become less valuable. In order to maintain greater value of the money in hand and to make the company appear to be growing in performance, the selling price of graphics cards will inevitably increase.

Inflation reduces purchasing power

The current price increase of graphics cards is actually very stable, like a frog in boiling water. But if you look back at graphics cards of the same level of chips a few years ago, you will know that, for example, the price of the GTX650 I bought was 750 yuan, and now the normal price of GTX1050 is 999 yuan. After the price increase due to the mining boom, the big guys who are in a near monopoly position have tasted the sweetness. If graphics cards are always sold at this price, how can the future be good?

So, seemingly logical reasons came out: PCB price increase; R&D costs of graphics card manufacturing process architecture improvement; tight supply in the flash memory market, and price increases from various upstream suppliers have become excellent reasons. Assuming that the comprehensive cost of a graphics card has increased by 100 yuan, then consumers will have to pay at least double or even ten times the price. A power outage will increase the price by 10 yuan, a water supply will increase the price by 20 yuan, and occasionally a few insignificant production lines or factories will be burned down by themselves. The lost money will be earned back several times or even dozens of times from consumers.

Price increase after "monopoly"

There is a common trick in the business world. Once successful, the monopolist can count the money and scrap a lot of money counting machines. The first step is of course to find an opportunity to beat the opponent half to death. Let the opponent fall into a vicious cycle and leave a breath behind, instead of killing him all at once. The purpose of leaving the opponent with a breath is to avoid antitrust investigations.

Then they raise prices by upgrading their products to improve performance, especially when they are in a monopoly position. You should know that behind the saying "you get what you pay for" there is also a saying "you get three times the price for one dollar ". Emmmm, just look at the price gap between three times the performance and a certain product.

Therefore, the graphics card market is currently not just composed of NVIDIA and AMD. Don't forget that Intel's processors also have an integrated graphics card that is often automatically ignored by gamers. The integrated graphics card may simply increase power consumption for gamers, but it is simply a magic weapon for office environments that do not require high-performance graphics cards.

In this case, isn't this also a graphics card? What's more, almost every desktop processor Intel sells is equivalent to selling a graphics card. So although the market share of discrete gaming graphics cards is in a real monopoly position, looking at the entire graphics card market, it is not even close to a monopoly!

Do you think this is cool? The more I think about it, the spicier I feel. This is what is called blatant money grabbing. It is not easy to make a lot of money without being accused of monopoly. I am not a philanthropist, so why don’t I raise the price?

When will graphics cards drop in price?

In the past two days, everyone has been arguing about the mining disaster. Are graphics cards going to be reduced in price? Price reduction? Not happening! You should know that when graphics cards are at normal prices, the GTX10606G is around 2,000 yuan, and the RX580 also maintains the same price. When graphics card prices were at their peak, the price of 1066 soared to 3,500 yuan; 588 also reached 3,700 yuan. Now that the tide has receded, the low price range of 1066 is also 2,500 yuan, and the price of RX580 is 2,700 yuan. Is this a price reduction?

Raw material suppliers also began to raise prices

You should know that the price of the GTX10 series was far less expensive when it was first released. It has been nearly two years since the Pascal architecture was first released, and it is already old. According to normal market rules, the price should be nearly 1,000 yuan lower than the current price on the eve of the new product release.

The current wave of price cuts is a clearance operation before the new products are launched. Judging from the fact that the prices are being kept tight, there are too many people involved. If the prices are cut too drastically, the second-hand dealers who spent a lot of money to buy the cards in the first place will definitely collapse. However, there are quite a few such people. Therefore, it is possible that the top management decided to use a soft landing method for the graphics cards to transition to the new architecture products.

Due to the above reasons, it can be concluded that the normal price of new products in the future will be higher than the normal price of the previous generation of products. Another point with a high probability is that the price increase ratio per thousand yuan of performance of new products will be lower than that of the previous generation of products. The extra price from the original ratio is the specific amount of the actual price increase.

So, there is no such thing as price reduction of graphics cards!