Nvidia executive states crypto is useless, despite it making his company a lot of money
A bit of background
Nvidia is one of the companies that has benefited greatly from the invention of cryptocurrency. Cryptocurrency mining requires a lot of computational power, and Nvidia’s graphics processing units (GPUs) are well-suited to handle the complex calculations required to mine cryptocurrencies like Bitcoin and Ethereum.
In the early days of cryptocurrency, mining was done using CPUs (central processing units) that are used for regular computer tasks. However, as the complexity of mining increased, CPUs proved to be too slow and inefficient for the task. Miners began to switch to GPUs, which were faster and more capable of handling the workload.
As a result, Nvidia’s GPUs became highly sought after by cryptocurrency miners. The company’s products were in such high demand that they experienced shortages in supply, which caused prices to rise.
Nvidia recognized the potential of the cryptocurrency market early on and began to tailor its products to meet the needs of miners. The company launched specialized GPUs designed specifically for mining, which were more efficient and powerful than their regular gaming-oriented GPUs. These mining-specific GPUs were in high demand and helped to drive sales for the company.
Nvidia’s profits from cryptocurrency mining didn’t stop at the sale of its GPUs, however. The company’s stock price rose dramatically in 2017, when the value of Bitcoin and other cryptocurrencies reached all-time highs. Nvidia’s stock price was closely tied to the cryptocurrency market, and investors saw the company as a way to profit from the cryptocurrency boom.
Overall, the rise of cryptocurrency has been a boon for Nvidia. The company’s GPUs have been in high demand by miners, and the company has responded by launching specialized products designed for the task. Nvidia’s profits from cryptocurrency mining have helped to drive sales and boost its stock price, making it one of the biggest beneficiaries of the cryptocurrency boom.
Michael Kagan is no fan
Nvidia’s CTO, Michael Kagan, has criticized the cryptocurrency industry for not bringing anything useful to society despite profiting from mining hardware. Kagan stated that AI is more useful than crypto and hopes that Nvidia’s products will be used for AI development instead. Nvidia has a complicated history with crypto, as they have profited from the industry but also faced a chip shortage due to high demand from miners. The company attempted to deter crypto miners by implementing hash rate limitations on their products, but later released special products designed for crypto mining. Despite this, Kagan dislikes crypto and believes that it is useless to society.
Nvidia’s Complicated Relationship with Crypto:
Nvidia’s CTO, Michael Kagan, recently spoke out against the cryptocurrency industry, stating that crypto does not bring anything useful to society despite Nvidia profiting from the industry. Kagan hopes that Nvidia’s products will be used for AI development rather than crypto mining, as he believes that AI is more useful.
Nvidia has had a complicated relationship with the crypto industry. During the height of the crypto boom, there was a high demand for powerful graphics cards (GPUs) as Ethereum miners used them to mine token rewards via the original proof-of-work model. The demand for GPUs caused a chip shortage, and it became near-impossible for gamers to buy the latest generation of graphics cards.
In an effort to deter crypto miners, Nvidia first tried to force hashrate limitations on its products—for which hackers found a workaround. Later, the company released special products designed for crypto miners, such as the Nvidia Cmp Hx, a chip which NVIDIA’s website states is “designed for professional mining operations.”
Kagan’s Stance on Crypto:
Despite Nvidia’s profit from the crypto industry, Kagan has a negative view of crypto. He stated that he never believed that crypto is something that will do something good for humanity. He compared crypto to high-frequency trading and added that though trading brought business with traders aiming to save nanoseconds, crypto won’t do anything for humanity. “You know, people do crazy things, but they buy your stuff, you sell them stuff. But you don’t redirect the company to support whatever it is,” said Kagan.
Kagan’s Support for AI:
In contrast to his negative view of crypto, Kagan hopes that Nvidia’s products will be used for AI development instead. He believes that AI is more useful than crypto and hopes that Nvidia’s products will be used for the development of AI-related tasks. Kagan sees a lot of potential for good in training chatbots like ChatGPT. Since Nvidia is typically better at handling AI workloads than AMD, many companies turn to its data center GPUs. The first version of ChatGPT was trained with the help of around 10,000 Nvidia graphics cards, and rumor has it that this number will increase exponentially.
Nvidia’s CTO, Michael Kagan, has criticized the cryptocurrency industry for not bringing anything useful to society despite profiting from mining hardware. Kagan’s negative view of crypto is in contrast to the company’s complicated history with the industry. Despite profiting from the industry, Nvidia faced a chip shortage due to high demand from the crypto mining industry. The shortage caused prices for Nvidia’s graphics cards to skyrocket and made it difficult for gamers and other consumers to purchase them at reasonable prices. As a result, Nvidia limited the ability of users to fully explore their graphic cards solely for crypto mining. Nvidia first attempted to force hash rate limitations on its products to deter crypto miners, but hackers found a workaround. Later, the company released special products designed for crypto miners, such as the Nvidia CMP HX.
Bite that hand!
Despite profiting from the industry, Nvidia has always had a mixed relationship with crypto. In 2018, the company was fined $5.5 million by the U.S. Securities and Exchange Commission (SEC) for failing to disclose the impact of cryptocurrency mining on its gaming business in two quarterly filings. Nvidia’s PC original equipment manufacturer (OEM) revenue jumped 200% in 2017, with the company writing that the spike was “due primarily to strong demand for GPU products targeted for use in cryptocurrency mining.”
Nvidia’s recent comments on crypto seem to suggest a shift in its position. While the company has historically profited from the industry, it appears to be distancing itself from it now. Kagan’s comments that AI is a more useful application for Nvidia’s products than crypto are indicative of this shift. As The Guardian notes, Kagan hopes that Nvidia products are used for AI development rather than crypto mining.
Nvidia’s focus on AI is not surprising, given the current state of the technology industry. AI is rapidly advancing, and many companies are investing heavily in it. Nvidia is one of the leading companies in the AI space, with its graphics processing units (GPUs) being used in many AI applications. Chatbots, like ChatGPT, are one of the areas where Nvidia sees a lot of potential for its products. Nvidia is typically better at handling AI workloads than AMD, which is why many companies turn to its data center GPUs.