'Foolish' to Invest in High-End GPUs for Crypto Mining, Says Research Firm Head

Purchases of graphics processing units (GPUs) by cryptocurrency miners helped an explosion of sales during the fourth quarter of 2020, according to graphics and multimedia research firm Jon Peddie Research (JPR).

In a press release on Wednesday, JPR said GPU shipments rose by 20.5% in Q4 compared with the previous quarter and 12.4% year over year.

The increase in sales, largely due to a coronavirus-led shift to working from home offices and increase in indoor-related activities such as video gaming, was also boosted by cryptocurrency mining, the firm said.

"The pandemic has distorted all models and predictions, as has the gold-rush in Ethereum," said JPR.

See also: Crypto Mining Farm Spotted Using Nvidia RTX 30 Gaming Laptops: Report

JPR President and founder Jon Peddie said that while there has been speculation crypto mining would potentially spark a renewal of demand for GPUs, the power consumption of high-end cards "greatly diminishes the payoff."

Further, "Ethereum, the best-suited coin for GPUs, will fork into version 2.0 very soon, making GPUs obsolete," said Peddie. "A person would be very foolish to invest in a high-end, power-consuming [GPU] for crypto mining today.”

GPU suppliers like Nvidia have struggled to keep up with soaring demand for units that power everything from multimedia rendering to keeping up with the latest game titles and, though they don't like it, mining ether.

See also: Nvidia Redesigns Graphics Cards to Limit Their Use in Ethereum Mining

The demand from the crypto industry has been accused of making the latest graphics cards scarce for the everyday retail consumer. Nvidia recently responded by changing software drivers for high-end cards to make mining less effective. The firm will instead offer a dedicated mining unit.