Cryptocurrency Mining – Forbes’ Disconnect From Reality Ignores Consumer Implications

“If we want fewer games to launch broken, we have to hold publishers accountable. But that first step absolutely starts with me, and with my fellow critics in the game industry. And you need to tell us that’s what you want. Ultimately, the games and the coverage of games is done for you. So wield the power you have and make your voice heard.”

That’s an excerpt from a Forbes article discussing the broken nature of reviews and games media. While the article itself is about reviews, the sentiment is no less relevant today: Games coverage is done for you, the consumer, by us, the media. But the onus is on us, the media, to provide you consumers with competent information.

It’s disappointing, then, that the same author who penned that fantastic, necessary, on-the-nose article also wrote one that is just so thoroughly disconnected from reality.

The disappointment isn’t just for posterity, rather, it stems from the notion the author himself put forth previously, that games media are here to serve consumers and their best interest in the industry.

Of course, I am referring to the recent Forbes article titled, “PC Gamers Should Stop Complaining About GPU Prices And Start Mining.”

Sensationalist headline aside, the content is disappointing and misleading. Furthermore, it is seemingly disconnected from the reality that consumers in the PC market are facing today — many of whom may be trying to get into PC gaming for the first time.

The article begins by saying,

“The reality is that if you want to build a PC right now or upgrade your graphics card, you’ll pay through the nose. But you can offset the absurd price tags of modern graphics cards by embracing the age-old adage ‘if you can’t beat ’em, join em.’”

Unfortunately, this mentality seemingly ignores the big picture perspective. By definition, “join ‘em” is contributing to the situation. The situation, in this case, is absurdly high prices of GPUs due to, among other factors like GDDR prices, cryptocurency mining.

By “joining ‘em”, you are quite literally feeding into this cycle. Mine more to offset ROI, thus contributing to GPU shortages. This in turn contributes to spikes in GPU prices even more, so one must mine more to make more ROI. Repeat ad nauseam.

This notion of “joining ‘em” is also a non-solution. Rather than contribute to and perpetuate the problem, one would hope a journalist would provide solutions to benefit gamers (the consumers who will actually use consumer GPUs for the purpose they were created) and not miners (those who don’t necessarily care about the health of the industry and may just see GPUs as a tool to use, adversely affecting availability and prices).

GTX 1060 via Newegg

The article continues,

“Let’s say you want to pick up an Nvidia GTX 1070. Depending on your location and retail preferences, it’s going to cost you anywhere from $699 to $850. So how do you make your money back on that graphics card purchase when you’re gaming with it? You don’t. I’m not even sure the concept of ROI (return on investment) crosses many people’s minds when building a PC or buying a new GPU.”

It’s here where the first seeds of cognitive dissonance are planted. The notion of ROI would, of course, not cross the minds of PC gamers when purchasing a new GPU. Why? Your average consumer will buy a GPU to game, not mine for cryptocurrency. ROI has quite literally nothing to do with gaming, so it seems rather disconnected to bring up ROI in such a context.

The article continues, and it’s here where it begins discussing a hypothetical consumer. It’s worth bearing in mind that this hypothetical consumer is the basis for future arguments brought forth in the article.

“Your GTX 750 Ti just isn’t cutting it anymore since it can’t exactly kick out 60FPS in PUBG without looking like your monitor is smeared with Vaseline. So you decide it’s time to execute a serious upgrade and go hunting for an Nvidia GTX 1070. One of the most “affordable” ones you can track down is the Gigabyte Gaming 1070 8GB for $699 [$650 at the time of this writing]. You hesitate, but eventually swallow the sticker shock and press forward knowing you’ll be playing literally any game out there in its beautiful intended 1080p/60fps glory — and many more at 1440p and 4K.”

The excerpt above assumes that anyone looking for a GPU will swallow the sticker shock. This assertion dangerously borders on fantasy. This completely dismisses the very realistic notion that someone looking for a 1070 at its MSRP of $399 is shopping in that price range for a reason: this consumer has a very real budget. It’s laughable to think any reasonable human being would be willing to pay $250 more for the same card he budgeted for. A reasonable human being would simply not do that.

Additionally, this assumption dismisses the equally realistic notion that, given the current GPU climate, someone looking to upgrade from a 750 Ti would suddenly not consider buying a console, like the Xbox One X — a product considerably more powerful than a 750 Ti and, as the author puts it, a “serious upgrade” over that card.

Someone upgrading from a 750 Ti, itself a budget card, would most likely be a budget-oriented, value-driven consumer. And in that sense, a $500 Xbox One X provides far greater value than a $650 1070. Personally, if I were looking for a “serious upgrade” from my 750 Ti, I’d buy a $500 console (by design, an all-in-one box) over a $650 GPU, and would easily recommend all such prospective consumers to do so. I don’t believe this to be an outlandish statement to make, and I suspect most reasonable human beings would do the same.

GTX 1070 via Amazon

The article continues,

“By the way, I already baked an average energy cost of $0.10 kW/h into these profit calculations. If you happen to be in a dorm or living somewhere where electrical is included, then go you!”

After digging into this a bit more, I found this estimated cost to actually be too low for many regions, even within the United States.

According to the Energy Information Administration, via reporting from ChooseEnergy.com, many states are much higher than that estimated $0.10 kWh. As an example, New York state is $0.17 per kWh as of December 2017, with a state like Hawaii costing $0.30 per kWh. That’s triple the estimation provided by the author. Unfortunately, the $0.10 per kWh estimation seems incorrect at best, and misleading at worst.

The article then moves on from the GPU upgrade scenario to a scenario involving a second GPU solely dedicated to mining.

“Does your motherboard have an extra PCIe slot for a secondary graphics card? Let’s imagine when you buy your new GTX 1070 you also pick up a GTX 1060 — which is incredibly energy efficient — and dedicate that to mining 24/7. I found the 6GB GTX 1060 version of Gigabyte’s Windforce model on Amazon for $359 [$325 at the time of writing]. Again, yea that’s pretty high. But guess what that card can bring in mining 24/7? That’s $504 per year, meaning that card pays for itself in less than 10 months when purely dedicated to mining, and then you’re cranking out pure profit with it running quietly in the shadows.”

This grossly ignores the very real cost of the GTX 1070. The author here is in no uncertain terms stating that you’re buying a 1060 alongside a 1070. Meaning, you’re not spending $325 for the 1060 as the author claims. You’re actually spending the $650 for the 1070 plus the $325 for the 1060 for a total of $975. This, in turn, negatively affects the ROI figure of $504 per year. It will simply be much lower. The author’s claim here is categorically misleading.

Again, let’s remember that the theoretical gamer the author is discussing in the use-case throughout this article is upgrading from a 750 Ti. Like I explained above, it is reasonable to assume that such a consumer is a budget-oriented, value-driven consumer. It is unreasonable and unrealistic to assume that such a consumer would spend nearly $1000 on multiple graphics cards.

Such a budget-oriented, value-driven consumer would not spend nearly $1000 on his hobby, never mind for his hobby in addition to a secondary source of income. It is simply irrational to think this way.

The article also fails to take into account very real factors like room temperature increasing, thus affecting your electricity in an attempt to keep ambient temperatures low, in turn affecting your bottom line. It also fails to take into account quality of life factors such as fan noise from your GPU if your PC is in your bedroom — not an uncommon scenario.

Additionally, it completely fails to take into account the human element, that is, how cryptocurrency mining has negatively affected real consumers, many of whom want to get into PC gaming for the first time.

Fellow writer, Joseph Bradford, had a recent anecdote regarding this, which he shared on his Twitter feed. Forgive the length, but I feel it absolutely paramount to include this in full in order to provide the real impact on actual consumers this article fails to consider.

“Was just a Fry’s looking for PSUs. Every time I go in there I look at the GPUs. This is what I saw.  

While looking there was a couple talking to their kid who was excited about getting his first GPU. But there was nothing on the shelves. The parents couldn’t understand why. I explained it’s because of crypto-mining and the supply/demand being screwed up as a result.

The parents were just trying to get their kid a GPU to play Fortnite. They didn’t understand how miners could need gaming GPUs, and I explained that it’s a matter of miners buying as many as they can to mine as much bitcoin or other cryptocurrency they invest in.

I explained that when you can find a GPU in stock it’s generally a couple hundred bucks more than it should regularly sell for. The kid was really depressed – that excitement turned into another example of how PC gaming is too ‘expensive.’ The parents were upset, obv.

To quote the mother: ‘That is so frustrating and depressing, my son was excited to get his first graphics card.’

All he wants to do is play Fortnite at 60fps. He doesn’t need a 1080ti, a Rx 570/580 would have done the trick. Instead they left empty handed, a victim of mining.

Mining, and the demand issues that are caused by mining, just ruined PC gaming for someone in real time in front of my very eyes. Gamers should not just ‘stop complaining and start mining,’ contributing to the problem. We need to hold companies accountable and demand change.

This was really depressing to see. Very depressing. Us in the industry look at this issue so differently (“not miners but the card manufacturer’s fault” is one common excuse) little is ever actually discussed how it affects actual, potential consumers. Cryptocurrency mining is, without a shadow of a doubt, ruining PC gaming.

Instead of a kid going home, excited to build his first PC and get into Fortnite, he was turned away for reasons he and his parents didn’t fully understand. His parents walked away knowing if they want to get a GPu they will be spending $100+ more than they should.”

Barren GPU aisle in the Las Vegas Fry’s. Photo credit Joseph Bradford.

It’s this tangible impact on real consumers that the Forbes article completely fails to acknowledge. It’s unfortunate and disappointing.

One can claim that by writing such an article, one is merely showing people some options. However, that’s completely missing the point. By using the megaphone that is Forbes, one is merely amplifying the problem. As media, one cannot sit there and naively imply that such an article is “just” showing options. It’s irresponsible.

I’ve also heard the argument, “the GPU manufacturers are at fault by not keeping up with demand, blame them.” Sure, they share blame. But this again ignores root cause. The real question is why these manufacturers can’t keep up with demand in the first place. The author is ignoring this very real question.

The article from Forbes is dangerous, disappointing, misleading, and worse, perpetuating a very real problem in this industry. Rather than provide consumers with solutions, it only appears to contribute to the current GPU shortages by glorifying cryptocurrency mining while simultaneously ignoring the consumers such practices leave in their wake.

David Gerard perhaps summed it up best in his book, Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts,

“Everything to do with cryptocurrencies and blockchains is the domain of fast-talking conmen. If anyone tries to sell you on either, kick them in the nuts and run.”

Written by
A highly opinionated avid PC gamer, Poorna blindly panics with his friends in various multiplayer games, much to the detriment of his team. Constantly questioning industry practices and a passion for technological progress drive his love for the video game industry. He pulls no punches and tells it like he sees it. He runs a podcast, Gaming The Industry, with fellow writer, Joseph Bradford, discussing industry practices and their effects on consumers.

1 Comment

  1. This writer clearly doesn’t “get” it. Allow me to explain:

    I have a gaming pc, and like most hardcore pc gamers, I also have an Xbox one S and a PS4. I prefer to game on my Xbox because it offers the flexibility to play from my couch, while also mining on my PC. And what he doesn’t understand is that mining is a victimless crime. Allow me to explain:

    I simply plug in my gpu to any pc I want. I have a gaming pc, so I use that. I power it up, and BOOM! Just like that I’m making money mining. My electricity bill is like 7 cents, so I’m not wasting any electricity doing this. In fact, I’d argue I’m SAVING electricity. Allow me to explain:

    See, when my pc is mining, I’m gaming on my Xbox. I’m getting beautiful 4K gameplay in 60 frames per second, and it’s so good, I never feel like I need to take a break to to get a beer or something. So by never getting beer, I’m not opening the fridge as much. And by not opening the fridge as much, what am I doing? SAVING ELECTRICITY! Because every time you open the fridge that light inside it comes on. Do you have any idea how expensive that is?!?! Well I do. Allow me to explain:

    One day I had a friend over who works for the electric company. He told me that one day a guy died in his apartment with the fridge door open. It was days before anyone found him, and when they did, that little light had burned out. But guess what: his electricity billed was like $150 dollars!!! Meanwhile, had his PC been mining for crypto currency that whole time, he could have had tons of money he could use to pay for that electricity bill. Well, if he was alive that is.

    So you keep on paying ridiculous amounts of money for your precious gpus, and I’ll keep mining the heck out of the internet. Oh – and enjoying Sea of Thieves, too.

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