Ever since cryptocurrency miners realized that the graphics processing units (GPUs) used to process the demanding visuals for modern PC games could be turned to the task of crunching numbers to produce crypto, gamers and miners have been at loggerheads. Miners have snapped up stocks of GPUs as soon as they come on the market, sending prices soaring and leaving gamers empty-handed. Those tensions threatened to burst forth last week, as reports spread that so-called hash-rate limits-applied by GPU manufacturer Nvidia to reduce a chip's efficiency when mining cryptocurrencies such as Ethereum-had been compromised. The news was subsequently debunked, and experts said it was almost impossible to get around the restrictions, which slash RTX 3060 crypto mining capacity by 50%. Subsequently, multiple reports have claimed that a beta driver release bypasses Nvidia's restrictions. The furor highlights growing apprehension in the chip industry, as principal manufacturers Nvidia and AMD seek to accommodate the needs of both gamers and crypto miners. It comes amid a surge in crypto mining revenues that's seen mining operators desperate to buy up inventory-leading to skyrocketing prices for GPUs. Chip manufacturers, meanwhile, are hampered by the scarcity of raw materials needed and confounded by Ethereum's shift to a proof-of-stake consensus model, which will ultimately do away with mining altogether.

A surge in the popularity of crypto mining followed PayPal's decision to integrate cryptocurrencies and high-profile investor interest. This contributed to a significant surge in GPU sales in Q4 2020, with GPU shipments rising by20.5% quarter-on-quarter and by 12.4% over Q4 2019, according to a report published this month. Analysts, Jon Peddie Research (JPR), who are behind the report, claimed that mining, specifically on the Ethereum network, played a sizeable role.

This year, Ethereum network fees earned by miners more than doubled, even from last year's peak during the craze for decentralized finance (DeFi) last summer, and miners saw their revenue triple. No other cryptocurrency comes close to Ethereum for mining profitability right now, according to mining experts. The flip side of this success was that an average transaction fee reached $38.21 on Feb 23, making the network unviable for smaller transactions (and impacting on activity in the burgeoning DeFi space). Ethereum's ongoing upgrade, Ethereum 2.0, is designed to mitigate those concerns.

In the meantime, Ethereum cofounder Vitalik Buterin has proposed interim scaling measures. Some community improvement proposals have not gone down well with miners, who fear a reduction in their fees of as much as 50%. A new proposal, EIP-3368, would see block rewards reduced by 0.25 ETH every quarter, helping to ease the impact of Ethereum's transition to proof-of-stake on miners. JPR noted that upcoming changes to the Ethereum ecosystem mean that demand for GPUs among crypto miners is likely to evaporate, as the blockchain network transitions to Eth 2. However, this will take some time. The network will be upgraded in phases, and the last isn't scheduled to happen until 2022-assuming there are no delays.