Why GPU / Ethereum Mining Is Toast – Stop Buying GPUs

One way I keep up with the developments in cryptocurrency is I do watch some of the YouTubers since the YouTubers are generally following the juiciest developments to farm views. With the continued news that Ethereum is going to launch Eth 2.0 and is more or less on time (now called the “Ethereum consensus layer”, how catchy) how much denial there is around this fact.

Except we are way past that point now. It’s literally these YouTuber’s job to know that GPU mining is toast and today I’m going to expose how big of frauds they are, how they really built their mining farms, what they are actually doing vs. what they’re telling you and why, as well as explain what exactly is going on with Ethereum and why if you’re planning on being able to mine with those GPUs (at least above the cost of your electricity / profitably) the math is not looking good.

Why am I doing this? Because I’ve been mining since before Ethereum existed and will still be mining after Ethereum mining no longer exists so it’s pretty clear to me what is happening here.

Let’s break down what both the miners AND the Ethereum developers/community don’t seem to want to remember so we can actually understand what is happening (and when) and break it down!

Ethereum Mining Ending

Let’s start with the elephant in the room. Is Ethereum mining ending? Yes, not only is it ending, they have been trying to end it almost since Ethereum started. Within 2-3 of years it had already been decided this was going to happen.

Look at this EIP (Ethereum Improvement Proposal) from all the way back in December 2016 where it was already a foregone conclusion it was going to proof of stake: Official Ethereum EIP #186 – GitHub.

That was several difficulty bombs ago. The block reward was 5 ETH per block back then!

The Beacon Chain

Now you might say “okay, so they’ve wanted to end it forever and it hasn’t happened, so why shouldn’t we assume that it will never happen or take 5 more years”?

Excellent question! It’s because now Ethereum 2.0 / Ethereum consensus layer already exists. It’s not theoretical anymore. There’s no question it will work. It is working / has been working for a while.

It’s called the “Beacon Chain”. It’s a separate network from Ethereum 1.0 but it already exists today. You can already run a validator node and you can even send Ethereum to the chain and stake it for pathetic rewards vs. mining it gives with even mediocre hardware.

Seeing is believing. If you want to see the Ethereum 2.0 chain working we can use the block explorer from beaconcha.in like this:

Ethereum Beacon Chain
Ethereum Beacon Chain

It was launched all the way back on December 1st, 2020. This was when the Ethereum bubble was starting and after I’d bought the last GPUs I’d ever buy for mining (5x RX5700 XTs for $400/ea in early November before the price went 1k+) and started buying ASICs and have been ever since.

Goldshell ASIC     Goldshell ASIC     Goldshell ASIC     Goldshell ASIC     Goldshell ASIC    

The Merger

So what’s left? All that is left is for them to merge Ethereum 1.0 with the Beacon chain. That is it. It’s already working. They aren’t still making it.

Right now they are planning. They want to make sure the transition goes as smooth as possible. If things went really badly it would impact the value of Ethereum and create potentially countless really serious problems / headaches for people.

They could move it today if they wanted. They really could. Think that’s a stretch? How could you possibly know that James?

The 51% Attack Threat Fiasco

Despite all of the denial back when the miners first heard about this they threatened a 51% attack. This is where miners group together to achieve greater than 50% hashpower on the coin. This allows them to start screwing with blocks as they have enough miners to make this possible.

Why? Because they are morons basically. The gas fees were hugely cut for miners and most of it is burned now. It was called EIP-1559.

It wasn’t all of us (it was a lot of the sponsored miners we’ll be talking about later though). In fact I was warning it would kill mining. And guess what? I was probably right. Look at me vs. reddit here: Reddit EtherMining Subreddit “Show of Force” Discussion

My argument was that the “Show of Force” 51% mining attack was lame and counterproductive. Want to guess how that went?

They got absolutely trounced so bad that they don’t even speak of it anymore. Vitalik Buterin presented a plan to IMMEDIATELY move Ethereum 1.0 to the Beacon chain if the miners performed a 51% attack. Were they actually ready then? Probably not, there would have been a lot of problems. They have had a year to prepare since then and they already thought they could mostly do it. That’s how you know.

If you weren’t around when this happened you may have never even heard of this. That is because it went as badly as we told them it would if not worse, and guess what? It actually does look like it’s going to mostly kill mining, and it’s *definitely* going to kill GPU mining. Even just the threat of it. It doesn’t matter that they didn’t actually perform a 51% attack.

They forced the Ethereum team into a difficult position using what they must see as weaknesses/mistakes in the past. All of the major new competitors in this last bull run were Eth-killers that already were using proof of stake and had way, way lower fees which are atrocious on Ethereum to this day. The fees are literally the worst of any cryptocurrency in the world and maybe even more expensive fees than any financial product that has ever been created on Earth. Already being proof-of-stake meant they were immune to this threat the miners were making which was making them look even more like punks against their fiercest competitors that legitimately want them dead (Eth killers). This was going to trigger their wrath.

They don’t want to talk about it because it literally advanced the timetable. They cut off their own foot. This would not be happening as soon as it is going to if this didn’t happen and create a legitimate threat that spooked Ethereum holders/investors forcing Vitalik to respond.

If we had just had a little bit more time NVIDIA was heavily making more efficient GPUs for mining that used much less power. Things didn’t have to be this way. The miners honestly forced a lot of this by being such greedy short-sighted idiots as most of them are (which is why they usually go bankrupt when the bubble is over).

This last Ethereum mining bubble was so large that most of them got away jumping in late and buying GPUs at 5x prices. In 2017 they all went bankrupt and we went in to a 3 year bear market. They’ll just get left behind on ASICs and frankly they already have if they haven’t started building their ASIC farm already.

The Current Situation

Okay, now that we’ve covered the history that neither the miners or Ethereum developers want to talk about we have enough background to explain what is actually going on here with mining. Let’s divide the miners into two groups:

  • #1 – Old miners – Likely believe in decentralization and are most idealist about crypto, probably have mined other things than Ethereum before, have survived multiple bubbles, will tell you honestly if they think something is good/bad to mine as they’re experienced enough to know more people/attention to a coin actually does benefit them financially directly. Probably less than 10% of miners qualify in this climate.
  • #2 – Almost everyone else – Started mining in the middle of the Ethereum bubble and buying GPUs — were successful because of the magnitude of the Ethereum bubble but would not normally have been — not likely to care about decentralization or possibly even know what it is in some cases — some of them will survive and join the “old miners” club if they can survive a bubble or two bursting and not be gone — not necessarily evil but are naive/inexperienced and super prone to greed or they wouldn’t have jumped in during the middle of a bubble at 5x prices

But wait, there’s a third category I wanted to talk to you about today.

  • #3 Sponsored miners – People who received most or all of their GPUs for free during the Ethereum bubble by starting a YouTube channel to review GPUs for mining. Have never survived a bubble. Probably haven’t been mining for more than a few years at most. Did not build their farm the way they teach you. Their purpose is (was, we’ll get into it) to sell you GPUs one at a time and tell you to build their farm that way even though they didn’t and never will. This is what they’re still doing because they aren’t actually successful miners and that is all they know how to do. They’re sponsored grifters.

I’m not sure that most people realize this. All those YouTube cryptocurrency stars? Those are not successful or even real miners. They did not buy most of those GPUs, and they definitely didn’t build their farms the way they are telling you to. That’s all sponsored gear. You definitely don’t want their advice on how to actually build a profitable farm if you, for instance, actually have to buy your gear with your own money because they didn’t. They have no idea.

What happened was when the bubble started the GPU sales went absolutely off the charts. GPU launches were the biggest thing ever. Now people largely ignore them because the availability is so poor it doesn’t mean anything unless you’re an insider. As a result of this GPU vendors started raising their prices and really wanted to cash in on this phenomena.

NVIDIA started making GPUs that were more power efficient just for mining. That’s how much these companies wanted a piece. They also started sponsoring YouTubers. Just like YouTubers that review GPUs for gaming there started to be YouTubers who covered crypto mining that started to be sent free GPUs for the exact same reason. To sell more GPUs through influencers. That is where this class of “miner” was born.

You know who I’m talking about. The people with giant towers of GPUs behind them with all the RGB lit up basically screaming “look at how badass of a miner I am”. That’s your grifters right there. Guess where they got those? Most of them came from NVIDIA, EVGA, Gigabyte, every GPU vendor you can imagine.

What happened was all of these YouTubers realized that since the companies were trying to cash in on this phenomena there was an opportunity. It wasn’t mining though, not really, and definitely not the way they are preaching to their audience pretending they are building these farms 1 GPU at a time with their hard earned money like they’re telling their audiences. They smelled a grift and they started up their channel. Take it from another content creator but one with very different audiences / motivations.

Why Sponsored Miners Recommend GPUs STILL

There’s a few reasons. The first one I touched on already which is that that has always been their job. They got a bunch of free sponsored GPUs to build a poser farm with and look like they’re some kind of badass on YouTube. That’s all they are. They didn’t build that farm actually buying them like a real miner has to. How it worked is they would get a 3070 from NVIDIA, then a 3070 from ASUS, then a 3070 from Gigabyte, and so on. Then the 3060 came out and they would do it again!

Because of that they don’t actually know anything. Some of them might legitimately not know / understand that GPU mining is ending and that these other coins couldn’t even absorb a small fraction of Ethereum’s hashrate and remain profitable. The closer we get though the lower the chances are that is the case, and they’re getting quite low which is why I’m writing this now. Too low.

The explanation is really simple. The “Eth Mining isn’t ending / GPU mining isn’t ending” denial group is very passionate about what they are saying. They need a constant drip of reinforcement to maintain this illusion. Wait until you see the numbers, and then you will understand why. They’re absolutely soul-crushing.

What do YouTubers specialize in? Making content and ultimately driving clicks about things that piss people off. It’s usually controversial topics. Topics where people will subscribe and come back so you can drip-feed them the same nonsense are the most lucrative of all. That is the “grift”. People do it in almost every topic/category and this one is even better because it also has free merchandise you get to keep from the vendors.

Could you succeed at GPU mining with dozens of free GPUs during a silicon shortage?

That’s why these guys are *NOT* successful miners. Are you kidding me? Can you imagine being handed literally dozens of NVIDIA 3000 series GPU during the biggest Ethereum bubble in history AND a silicon shortage? How could you lose? That is literally a gift of hundreds of thousands of dollars between the ETH mined and the GPUs themselves.

Do you think that person has something to teach you about mining? Why? They don’t even know as much as you do. If you had to buy your equipment you are a better and more successful miner than they are. They aren’t miners. They’re sponsored performers with literally free gear, DOZENS of GPUs. They’re circus performers generating clicks from the build in their background and the brand names on them which was an investment by the manufacturer into that YouTuber at YOUR expense (you are the target to go buy the GPU and make the manufacturer money).

In fact, it’s even worse than that. They know they are lying to you AND you are buying them their ASIC miners with the money. Why? Because ASIC miners are *much* more difficult to get for free. You’re going to get at best one of the smaller models from each manufacturer or if you’re really lucky you might get something like a KD5/KD6 on occasion is as good as it could possibly get. You’re not going to get dozens of them. They need money. A lot of money, and there’s not much time.

They’re also *way* more expensive than GPUs. Too expensive for these guys even if they haven’t managed their money very wisely. They aren’t getting crazy money from the Ethereum anymore, nobody really is that isn’t using ASICs because they’re way more efficient and powerful. They probably paid way too much for those ASICs too because of the Eth bubble but the smart ones are doing fine.

That means they need you to buy them. The one free vendor ASIC is not even going to impress an average YouTube user. Buying 5-6 more of them is going to be a problem both because of availability and price. The GPU grift is all dried up. They’ll never receive another free GPU again. That time has passed and the manufacturers weren’t sending them to the mining YouTubers because they like them.

Don’t Be Fooled

Now let’s put it all together. We’ve covered the actual state and progress of the Ethereum chain merge that will eliminate Ethereum mining. We’ve covered the motivations of the people you are most likely to get crypto information from. Now let’s put it all together.

The GPU mining content in the year 2022 is so YOU can pay for their ASICs which the vendors will never send them enough of to even pose with on YouTube. Why? Because if they don’t get some ASICs fast they are not going to have a YouTube channel in 6 months. That is no joke.

They have a limited amount of time left to milk those GPUs before most of you still watching that trash will finally wake up and realize GPU mining is toast. They probably haven’t been managing their funds wisely and thought the grift could continue but they know it now.

Mark my words, it is that very moment when those of you remaining accept that Ethereum mining is ending when… SURPRISE! All of the sudden that YouTuber who has been doing knowingly dishonest GPU mining content pretending they are building these farms 1 GPU at a time like they’re telling the viewer?

They have a ton of ASIC content now paid for with your profits from needing to consume a constant drip of soothing saying it’s okay we will mine other coins blah blah blah. No. You won’t. The numbers do not support that conclusion.

Bobcat 300 Helium Miner
Bobcat 300 Helium Miner*

Why GPU mining can’t absorb Ethereum’s hash rate

Name a GPU mineable coin. You said Ravencoin didn’t you. Everyone always says Ravencoin when I ask that question!

It’s basically the same as it has been for the past few years. I’m going to show you, but brace yourselves.

WhatToMine – Daily Earnings Calculator

Let’s start with Ethereum Classic. GPU miners hoping to utilize this coin have a problem. It uses Ethash, the same as Ethereum, and there are ASICs for that. Those ASICs can’t mine anything else. They *HAVE* to mine Ethereum Classic or another Ethash coin of which there are some but they’re even tinier than the ones we’ll be comparing here.

What does that mean? It means since they have to mine Ethereum Classic and can’t mine the other coins the GPUs can you can scratch that one off your list. The ASICs are way more efficient than your GPUs that are also going to be homeless when Ethereum mining ends. You will not be able to compete here. It unfortunately also has by far the highest market cap of any of them of 3.8 billion.

Ethereum’s market cap is 331 billion. Let’s calculate that as a percentage to get a sense of how big Eth Classic is vs. Eth:

(3811994785 ÷ 331332705081) * 100 = 1.15%

Ok. That’s not good. Ethereum Classic, as BY FAR the biggest coin other than Ethereum that is GPU mineable, has 1.5% the market cap of Ethereum.

What happens when however many % of those people try to keep GPU mining or have to mine with their Ethash ASICs have to share a pie that is 1.15% the size of what they were getting before? They starve. You don’t make electricity. There aren’t enough daily emissions to feed you all.

Does it help if we do the calculations by hash rate? No, and they’re a lot harder to compare because a TH of hashpower on Ethash is not the same as on another coin/algorithm. You can do it though, and it scales pretty similarly to the market cap. The bigger factor will be whether there are ASICs on them because you can’t compete with the newer ASICs (9.5 GH/s in a single Bitmain ASIC, ONE!).

But what about those other coins?

We just did the biggest one and we are at 1.15% of Ethereum’s market cap. If you add them all together you won’t even break double digits. There’s nowhere to go, there’s no money in there literally. Not even if you add the entire market cap of the coins together can you find enough money for all these miners and have them make above the cost of electricity.

The fact is there are no other coins. Proof of Work is unfashionable now. Elon Musk will tweet saying you’re destroying the planet. Ethereum is feeding into this as well by touting how they’re getting rid of evil energy consuming mining to go to proof of stake. This makes all the other coins left behind on Proof of Stake look bad and no new project wants to be accused of that.

I just showed you the menu. Either 99% of both ASIC and GPU miners need to quit mining forever or you need to understand that you will be sharing from a pie that is 1-2% the size of Ethereum. Just Ethereum by itself. You also have ASICs that will be homeless that you will be competing with for Ethash (Eth Classic basically), which is by far your biggest choice.


If you want to keep mining then prepare. You’re going to need ASICs and / or Helium hotspots. There is no other choice as having no proof of work coins (at least that are in the spotlight) for so many years has left the landscape pretty barren. CPU mining hasn’t been profitable for years. If you think a type of mining can’t just go unprofitable and basically die then look at CPU mining, GPU mining is next.

If you want to ride out into the sunset then that is what you should do. Use what you have and keep it all as profit. Buying GPUs is only lining pockets at this point and it won’t be your pockets. Even if Ethereum mining goes on for longer than the end of the year (it won’t) the big boy ASICs from Bitmain that are 9.5GH/s will keep shipping and keep stomping on your GPUs until it’s not even worth the electricity.

Even at today’s numbers if you stopped mining Ethereum you’d be making about 60-70%. That is literally competing against nobody you already lose at least 30-40% of everything you make switching when nobody else even is. It’s going to be absolutely devastating.

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1 year ago

I know this is a little late but this post is what stopped me from coping and I finally decided to face reality. Read this a month or two ago and decided to just start selling my gpus and started buying ASIC’s, and I didn’t even lose that much tbh. Read some of your other posts and It’s all very nicely written, keep up the good work! 🙂

2 years ago

Stopping in to say Hi!

2 years ago

So what should I do now:
I have 38 GPUs 3080s and 3090s with 4Ghs and free power cuz of 20kW photovoltaics. Should I sell my GPUs and buy ASICS to mine BTC?

2 years ago

Thanks for quick answer James. I really appreciare that.
I could sell all od my 3080s to buy ASICS. Actually I was thinking about BTC ASICS in last month, that’s why I found You as part of my reaserch 🙂 3090s are not payed out yet but it doesn’t matter – 16 of them. It’s not my main business, it’s more like profitable hobby. I’m definitly not in trouble – dept – just need to make decision what to do in this year. More GPUs – 3090s only – or what else… I’m glad to find Your website… You just gave me fresh look on my mining.

Shoney's BigBoy
Shoney's BigBoy
2 years ago

You mentioned the next minable coin being below 2% the size of Ethereum. What if Ethereum GPU miners own a sizable stake of Ethereum, sell out in protest, buy up the next coin in line and start mining? Seems like that massive spike in a different coin would attract a lot of attention away from Ethereum and restore some profitability back to GPU mining. I am no expert on the situation, but that seems like a very plausible option. What are your thoughts?

2 years ago

Eth devs are thieves. They dumped all their ETC post DAO. They got rich off the hack