I'm trying to figure out this statement. Wouldn't fewer miners on a given coin mean a better chance at profitability for those remaining, not less?
Personally, I think that "coins" are a blight upon the world. Etherium, in particular, was designed to be mined on graphics cards in an effort to democratize mining (Bitcoin had long-since been relegated to ASIC miners). How did that work out for the rest of us!? Unintended consequences, indeed! Now, next on the consumer's chopping block is storage, and what will come after that?
Anyway, I've given up on getting any new graphics cards for now (so glad I didn't sell my 2080ti, as I nearly did in anticipation of a 3080). I'd estimate December at the earliest before availability is moderately improved. But I don't expect prices to drop by very much, and by then one might wish to wait for a 4080 to be "available" anyway.
The basic explanation is:
Cryptocurrency is awarded when a block is calculated. This is a mathematical operation that requires multiple GPU's to perform. The block is usually calculated with a ton of smaller math operations that each GPU solves.
The difficulty of solving these mathematical problems is directly proportional to the difficulty level of the network. As more processing power gets added, the difficulty rises. So basically, ideally, the rate of distributing cryptocurrency that's generated through POW will be slow enough that the value can rise.
The reason no other coin will be viable when Ethereum mining dies, is because there's a LOT of hashing power on Ethereum right now. I'm not talking about ASIC's, but GPU's. Ethereum was GPU mineable for way longer than BTC.
Right now, I'd be surprised if even 0.5% of the hashing power on Ethereum was on any of the alt-coins. The reason 10% would be a lot is because even 10% of Ethereum hashing power would be so much, that the difficulty would rise, but the value of the alt-coins wouldn't rise alongside the difficulty rise. So it wouldn't be profitable for miners.
And at the same time, they'd see other miners trying to dump their GPU's before the market corrects itself. Why would the market correct itself? Because GPU's are still being manufactured. Why would anyone pay $2400 for a 3080 on Ebay when Best Buy is still stocking them every week? Plus gamers who don't care about the LHR versions will buy those. So large mining farms will dump their GPU's, hoping to get as much of the resell price as they can. Some just want the GPU's gone so they'll literally dump them for or under MSRP.
This will sort of lead to a snowball effect. GPU's going down in price, causes more mining farms to dump their GPU's hoping to sell them, which will again cause GPU's to go down in price, causing more mining farms to sell them. This happened in 2017, trust me, it'll be the same now, maybe even worse.
