As the Ethereum network’s move to a proof-of-stake (PoS) consensus mechanism spurs adoption from institutional investors, prices for graphics processing units (GPUs), often used to mine ether (ETH), have fallen in China.
Following the historic Ethereum merger on September 15th, previously highly sought-after Nvidia GeForce GPUs have become much cheaper, reports the South China Morning Post. The price of GPU dropped from 8,000 yuan ($1118) to 5,000 yuan in 3 months, according to Peng, a Chinese businessman who cited the RTX 3080 as an example.
According to Peng, when Bitcoin (BTC) mining was at its peak in China, mining companies made purchases of GPUs. But now, the businessman said, nobody buys new computers, let alone new GPUs.
Another trader, Liu, also sold low-end RTX 3080 cards from manufacturers such as MSI, with prices reduced by 2,000 yuan compared to 2 months ago. According to Liu, this could be heavily influenced by the hype surrounding the Ethereum merger.
Retailers are not the only ones affected by low demand. Online shopping platforms Taobao and JD have shown a reduction in the price of GPUs. The RTX 3080 cards on these sites have a price drop of a few hundred yuan compared to their price three months ago.
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After the Ethereum merger, the ETH blockchain moved from its power-based proof-of-work (PoW) mechanism to a PoS layer beacon chain. In this way, the miners who used to process transactions and produce blocks will be replaced by the participants of the ecosystem, ETH will become the new validator of the network.
Meanwhile, a PoW fork called ETHPoW went live when the merger started. However, despite trying to keep the PoW agreement going, it ran into technical issues at launch, causing the value of the ETHW token to drop by 65%.