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The recent Sichuan region ban has caused up to a 65% drop in GPU prices, cementing China’s continuous suspension of crypto mining operations.
The graphics processing units (GPUs) market is starting to open up as prices drop. Following China’s crackdown on crypto mining operations in multiple parts of the country, more people can now afford current GPU prices.
A South China Morning Post report published on Monday revealed that graphics cards from makers such as Asus and Nvidia have lost up to two-thirds of their value as seen on e-commerce websites. According to the report, Nvidia’s entry-level Quadro P1000 retailed for 2,429 yuan ($376), down 19% from its early May price of 3,000 yuan. Asus’ more advanced RTX3060 was the much bigger crash. The graphics card plummetted by 65%, from 13,499 yuan in May to 4,699 on Monday.
Expectedly, the crash should make it easier for crypto miners to purchase much-needed equipment. However, since the multiple bans have affected miners, gamers are taking advantage of the crash.
Video gamers are mostly responsible for graphics card use. The technology helps gamers process heavy software and graphics used for complex games. However, miners use these graphic cards since they provide considerable processing power for their operations. Crypto miners use this processing power from the graphics cards to handle complex mining computations and hashing. More powerful graphics cards allow miners to increase their chance of adding new blocks to a blockchain before other miners do.
China’s Crackdown and the Drop of GPU Prices
The GPU price crash is directly tied to a recent order from the Sichuan province banning cryptocurrency mining operations. Sichuan followed in the footsteps of Xinjiang and Inner Mongolia, effectively banning all cryptocurrency operations in the province. This is a sharp detour from an earlier South China Morning Post report which stated that the southwestern province would allow miners to operate until September. The report mentioned that Sichuan’s energy regulator met with power companies in the province. However, they could not conclude on changing policies and their effect.
Bitcoin’s energy consumption is one of the network’s major problems. In line with Beijing’s goal to tackle this, several provinces have also banned cryptocurrency mining operations. Beijing plans for its carbon emissions to peak by 2030 and then become carbon neutral by 2060.
In August last year, CoinSpeaker reported that the autonomous regional government of Inner Mongolia disqualified 21 mining farms from electricity tariff incentives. Before then, mining outfits enjoyed discounted prices. By March, Inner Mongolia shut down crypto mining operations for energy efficiency reasons. The government specifically suspended approval for new cryptocurrency mining farms and began closing down operating ones.
The Xinjiang autonomous region also suspended crypto mining earlier this month. The region’s Changji Prefecture Government ordered government offices in the Zhundong Economic Technological development park to stop all crypto transactions.