Electronics bazaars in Asia are receiving a flood of international buyers looking for cheap cryptocurrency mining equipment.
Equipment including components such as GPU’s, motherboards and fans, can be as much as 50% cheaper here than in Europe. At many locations, customers can also have their mining rigs assembled by sellers while they wait, and still pay less. One key destination is Hong Kong’s Sham Shui Po market, which is made even more attractive due to the lack of sales tax. However, the boom in sales is being felt across Asia – a welcome respite. Sales had been falling in recent years with the demand for personal computers dropping significantly. The equipment is mostly manufactured in China, with GPU’s being developed by Advanced Micro Devices (AMD) and Nvidia.
The drive behind the rush for computer equipment is cryptocurrency mining – the process that ensures the security of Proof of Work protocols such as Bitcoin. Computers race to solve complex mathematical calculations, and when they find a solution are allowed to write a block on the chain and are rewarded. This is how new Bitcoins are created, and the rapid rise in cryptocurrency prices has seen a surge in those looking to start mining.
However, experts note that there are several limitations to home mining rigs. Initial starting costs can range anywhere from a few thousand dollars to tens of thousands or more, and mining is a highly energy-intensive process, adding further costs. Moreover, the average home miner is in direct competition with much more powerful machines and mining farms, which can mean infrequent payouts. It can take many months of constant work to make back investments costs and begin to profit.
Whilst small miners may struggle, manufacturers are raking huge profits from the hype. Earlier this year AMD announced revenues of $1.48 billion, a 34 percent year-on-year increase. Computing and Graphics cards contributed $958 million to this figure – rising 60 percent. Nvidia has also benefited, with the company announcing a $150m boost in revenue from miners. The reason for the huge boost is that crypto mining has created a huge demand for GPUs, with the average mining rigs holding anywhere from six to twelve GPU cards. The craze has left manufactures racing to meet demand. It has also been reported that development has begun on mining specific cards that are stripped down and come with a reduced warranty, in a bid to boost production.
The high demand is also being felt in Asian bazaars. One shop owner said that “We’ve been selling more these few months and we often run out of stock”. Another seller Liu Xiao Yu in Singapore told Reuters:
“There was a customer who asked for a rig with 500 GPU cards, which amounted to over S$350,000 ($262,700)…There was another who came by last week asking for 1,000 GPU cards, but I am afraid to accept the offer as supplies are low now.”
The profitability of mining depends entirely upon the cryptocurrency markets, and demand for equipment falls significantly when the market crashes. However, those in the industry are confident of good business for the foreseeable future, commenting:
“Once the value of Bitcoin increases again, we will receive multiple calls and emails from customers all over the world.”
Featured image from Shutterstock.
Last modified: May 20, 2020 9:04 PM UTC