Computer video cards have become a scare commodity in Russia as cryptocurrency miners bulk buy components to cash in on the Bitcoin craze
(WASHINGTON, DC) An ordinary Russian consumer may face difficulty buying a video card for his home PC, Vedomosti newspaper reports. The recent surge in the value of bitcoin has caused a jump in demand for video cards, which are used in cryptocurrency mining.
People buy up to 600 video cards at once, sources in the industry told the media, causing a nearly 80 percent price surge since the spring.
Over the past two months, video card shipments have tripled, said IT-distributor Treolan. Market demand exceeds supply, it added.
Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the blockchain. It is also the means through which new bitcoins are created.
Anyone with access to the internet and suitable hardware can participate in cryptocurrency mining. Graphics or video cards are more efficient at mining than CPUs.
Since the end of March, the value of bitcoin against the US dollar has skyrocketed by 200 percent (from approximately $1,000 to $3,000 peak on June 12). Bitcoin rival Ethereum has risen 2,400 percent since March.
It has become easy for any PC owner to participate in bitcoin mining. It takes up to 45 days for a home computer to mine one bitcoin (worth about $2562). One Ethereum is worth about $375 but is easier to mine.
As specialists note, after you have generated your first bitcoin, further mining becomes more difficult. It requires better computers with better video cards, and electricity bills surge dramatically.
So, miners are forced to unite in groups to make mining more profitable. Russia has about 5-7 percent of the mining sources, mining business owner Dmitry Marinichev told Vedomosti.
In early June, Russian President Vladimir Putin met Ethereum’s founder Vitalik Buterin on the sidelines of the St. Petersburg Economic Forum and supported his plans to build contacts with local partners to implement blockchain technology in Russia.
During his speech at the forum, President Putin said that "the digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business model.”
Russian Central Bank Deputy Governor Olga Skorobogatova also touched on cryptocurrencies at the forum, saying Russia’s central bank has already deployed an Ethereum-based blockchain as a pilot project to process online payments and verify customer data with lenders including Sberbank PJSC.
Mrs. Skorobogatova said she couldn’t rule out the possibility of Russia’s central bank using Ethereum technologies for the development of a national virtual currency down the road.
According to Bloomberg, Russia’s state development bank VEB has agreed to start using Ethereum for some administrative functions, and Steelmaker Severstal PJSC tested Ethereum’s blockchain for secure transfer of international credit letters.