Hey there Reader,
I know I missed the last two weeks' newsletter issues. Truth is, I just wasn't quite in the head-space to write the newsletter, between some personal life stuff and just feeling really busy all of a sudden.
But I'm back this week. We got some big crypto news, market analysis for GPU companies, and a big update on my career (the next step in become a "Professional Tinkerer").
Consequences of the Ethereum "Merge"
Last week saw the long-awaited "Merge" for Ethereum which has officially transitioned the blockchain from its former GPU-powered proof-of-work consensus mechanism to a much more efficient proof-of-stake system.
Many have been surprised to see ETH's price decline post-merge, going from roughly $1,750 right before the merge to $1,250 today.
Here are my feelings on why this happened:
- Hype. As with most things in crypto, the hype ended up being bigger than the result. The move to PoS has actually had minimal effect on how Ethereum operates (more on that in a second), so as people realized that, the buying pressure dried up and instead you have miners cashing out the last of their ETH to try to recoup a little bit before cashing out their mining rigs (if they even can).
- The "Merge" was only the first step. Ethereum is still super expensive and slow to use. There are three other upgrades that Ethereum is planning to go through in order to support enhanced scalability, broader user participation, and cheaper/faster transactions. The next stage is to enable "sharding" which is a technological improvement that will enhance Ethereum's scalability, make it easier to run Ethereum nodes, and more. You can read about it here if you're so inclined (warning, lots of nerd words).
- Centralization concerns: now that Ethereum has transitioned to PoS, upwards of 40% of blocks are now being confirmed by just two entities: Lido and Coinbase. Since PoS relies on size of stake to determine who gets to write blocks, it will naturally lend itself to more centralized outcomes. Hopefully, with future upgrades, it will become easy for individuals to run their own Ethereum clients and do so with smaller ETH stakes. But time will tell how this plays out.
The broader crypto market is down as well, along with more inflation concerns and broader bearish economic sentiment, so ETH is certainly not alone, but no doubt there are many unhappy ETH holders right now...
2023 will bring a radically different GPU market
Okay bear with me here, cause I'm going to get a little nerdy. If you're a PC gamer or into crypto, chances are you're well aware of the Great GPU Shortage of 2020/21. For those who aren't, when Nvidia released the 3000 series of GPUs and AMD released their 6000 series GPUs, both in 2020, they were immediately fully bought out. And then for the rest of 2020 and all of 2021, it was nearly impossible to purchase a GPU due to crazy high demand and lagging supply lines.
Well, it seems unlikely that this is going to happen again. Nvidia just announced their next-generation 4000 series GPUs which seem to come with a significant performance boost and a much more significant price increase over the 3000 series MSRPs. No word from AMD on their next-generation cards, but I would expect a similar trend from them too.
But it's not just the significantly higher prices (looks like $400-500 more expensive, in some cases nearly doubling the price of the previous gen comparatives). The move of Ethereum to PoS has made crypto mining essentially obsolete: yes, there are some other blockchains that are still based on GPU mining, but ETH was by far carrying the mining market. Combine the lack of mining demand with the higher prices and you have a recipe for significantly less GPU sales than the last generation, and I would not be expecting a GPU supply crunch like we did last time.
And a little cherry on top: EVGA, one of the largest GPU manufacturers for Nvidia GPUs, has decided to stop working with Nvidia entirely. You can read more about it in that article if you want, but EVGA's GPUs make up the vast majority of their sales, so this move is quite surprising to say the least.
It might be a decent time to snap up NVDA or AMD shares in the next year or two as they go through a little dip in business for now. Their products will always be valuable, and while I suspect they'll go through a little lull in their stock price for now, they'll come roaring back eventually.
I'm starting a consulting service
My time out of Corporate America has been some of the best weeks of my life. I want to make this a permanent lifestyle and lean into the Professional Tinkerer career that I've mentioned before. In order to do that, I obviously need to make an income.
So to do that, I'm starting to offer consulting services. Initially, I'm focusing on building what I call "Digital Growth Platforms" for personal service businesses (think dance studios, fitness studios, healthcare services, educators, or subscription services). Essentially, I'm helping these businesses build a scalable technological basis using existing market software + some custom software + a custom website to help them acquire customers easier, convert more effectively, and increase lifetime value of existing and new customers.
So, if you run a business like this or know someone who does, send me an email at firstname.lastname@example.org (or reply to this newsletter).
Most of the work I've been doing over the last 3 weeks has been related to this new consulting path. I've let my work on this newsletter/my writing as well as Odaat lay on the wayside in the meantime.
I hope to find a better balance in time, but I'm likely to continue prioritizing the consulting work, with my writing/audience-building being a secondary priority. I don't know if I'll have time to prioritize Odaat much, so that's sort of in the air right now.
But once I get the consulting work rolling, we'll have to see how my time ends up getting split. Right now, I've been doing a lot of prep work and getting started on my first project which I hope to share with you all soon.
So I'm going to keep this short this week, but hope to have more to share next week.
That's all for this week's issue. Thanks for reading, and you'll see me in your inbox again next week!
If I can ask you to do just one thing, consider sharing this newsletter with a friend or family member. Here's the link so you can pass it along: https://aherosjourney.co/.