Chennai goes crypto-crazy

We live in a time of a mini gold rush. For more than a year now, cryptocurrencies such as Bitcoin and Ethereum have created a buzz due to the exponential increase in value these digital assets have received. Buying a good amount of Bitcoins on an exchange and holding onto them as though they were a stock is one thing. On the other hand, buying a bunch of high-end graphics card to build machines that mine other alternate coins have become the go-to option for a lot of folks in Chennai who are looking to smartly invest their money in a semi-passive way. And this creates opportunities and problems.

The opportunities are obvious: Briefly put, through a process termed as ‘mining’ wherein by utlising the processing power of the Graphics Processing Unit (GPUs,) miners can solve complex mathematical problems required to process transactions and they are in return rewarded a small token of the digital currency that is currently mined. The return of investment for this venture is easy enough for an individual to calculate. And for the most part, there isn’t much active work from the side of the investor.

Then there are the problems. Just recently, there have been reports that Search For Extraterrestrial Life (SETI), an organisation that does what its name indicates, have come out and said they’ve experienced difficulties in acquiring high-end graphics cards required to carry out their activities. A gamer or a professional who does any kind of intense computer graphical work will have slim chances in acquiring the hardware they need at a reasonable price, let alone timely manner. Just head over to any reputed dealer in the electronic hub of Ritchie Street off Mount Road and you’re bound to get the ‘out of stock, please come back next week’ reply. There’s also a good chance of a price increase from your last visit.

Shankar, a freelance graphics designer and entrepreneur who has a studio in Anna Nagar, is invested in both sides. “I lucked out in buying my cards about 8 months ago, before the demand increased,” he said. “When I saw firsthand a mining farm a friend had setup in Bangalore, I decided to make a small investment myself. But in the current climate, I can’t afford to buy half the amount of cards I had bought then. Would have saved them for my work.”

With the value of these currencies undergoing timely flux every few months, mining has come to be seen as the more stable option as the money made is predictable. In Chennai and throughout India, acquiring a graphics card at even 1.5 times the original rate set by the manufacturer is going to be tough. Is there light at the end of the tunnel? The crypto market recently crashed (a bitcoin went from Rs. 10 lakhs to Rs. 4 lakhs,) and yet the coins already are in the recovery phase. People are not going to sell their cards for a second-hand rate as long as their ventures remain profitable. Waiting might be the best (or only) option as you’re bound to go bankrupt buying one of these cards.