Nvidia is leaving Cryptocurrency Mining

There are rumours surfacing that Nvidia has lost interest in the crypto mining market and are limiting sales of their products to this market. Initially, most crypto mining activity was done on powerful PC graphics cards which is still the case for some of the newer cryptocurrencies. According to Nvidia, the BitCoin algorithm is easy to implement in an ASIC and more effective. While Nvidia has made dedicated boards for crypto mining the bulk of the BitCoin business is moving rapidly to ASIC where manufacturing capability and costs are more important than software, ecosystems and support. Nvidia is surrendering this market to TSMC that have seen a surge in revenue over the last few quarters.



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Nvidia Conference call Comments:

“So what happens is when a crypto — when a currency — digital currency market becomes very large, it entices somebody to build a custom ASIC for it. And of course, Bitcoin is the perfect example of that. Bitcoin is incredibly easy to design in its specialized chip form. But then what happens is a couple of different players starts to monopolize the marketplace. As a result, it chases everybody out of the mining market and it encourages a new currency to evolve, to emerge. And the new currency, the only way to get people to mine is if it’s hard to mine, okay? You got to put some effort into it. However, you want a lot of people to try to mine it.

And so, therefore, the platform that is perfect for it, the ideal platform for digital, new emerging digital currencies turns out to be a CUDA GPU. And the reason for that is because there are several hundred million NVIDIA GPUs in the marketplace. If you want to create a new cryptocurrency algorithm, optimizing for our GPUs is really quite ideal. It’s hard to do. It’s hard to do, therefore, you need a lot of computation to do it. And yet there is enough GPUs in the marketplace, it’s such an open platform that the ability for somebody to get in and start mining is very low barriers to entry.

And so that’s the cycles of these digital currencies, and that’s the reason why I say that digital currency crypto usage of GPUs, crypto usage of GPUs will be small but not 0 for some time. And it’s small because when it gets big, somebody will be able to build custom ASIC. But if somebody builds a custom ASIC, there will be a new emerging cryptocurrency. So ebbs and flows.”