Nvidia claimed that cryptocurrencies “do no good for humanity”, despite the fact that their graphics cards have been purchased in large numbers for mining.
Huge mining factories have been built
The increase in the price of graphics cards has been one of the most debated topics in recent years. It is a multifactorial phenomenon that cannot be attributed to a single event. Indeed, several factors have contributed to this increase, in particular the various confinements linked to the Covid-19 pandemic, which have caused an increase in the demand for computer equipment for teleworking and home leisure.
Meanwhile, the rise of cryptocurrencies has also played a major role in driving up GPU prices. Graphics cards have been widely used for cryptocurrency mining due to their ability to perform complex calculations quickly and efficiently, especially for Ethereum (pre-Merge anyway). This increased demand for GPUs for mining has led to a shortage of graphics cards in the market, thus exacerbating the price hike.
Nvidia: cryptocurrencies bring “nothing useful to society (…)”
Michael Kagan, CTO of Nvidia, said in an interview with the Guardian that cryptocurrencies bring “nothing useful to society (…)” and what is not “something good for humanity”. Nvidia’s CTO also said other uses of processing power, such as the artificial intelligence chatbot ChatGPT, are more interesting than cryptocurrency mining.
Michael Kagan’s statement comes as no surprise, Nvidia has never been close to the cryptocurrency community. In 2021, the company even launched software limiting the ability to use its graphics cards to mine Ethereum. However, Nvidia has also released graphics cards dedicated to cryptocurrency mining.
Nvidia has nothing to lose
This position allows Nvidia to focus on areas with greater growth potential, such as AI and gaming. By emphasizing the development of AI tools such as ChatGPT or Midjourney, Nvidia is positioning itself as a key player in the ongoing technological revolution. Investments and partnerships with giants such as Microsoft, Amazon and Oracle demonstrate that Nvidia aims to strengthen its position in the market and pave the way for new growth opportunities.
It is important to point out that Nvidia has nothing to lose by criticizing and rejecting cryptocurrencies, since using this hardware for cryptocurrency mining is no longer profitable at all. As you can see here, at 17 euro cents per kWh, no graphics card offers sufficient profitability. It takes more than 3,682 days (more than 10 years) to make a GeForce RTX 4090 profitable.
Nvidia has understood that the real added value of its products lies in more advanced and beneficial applications, such as artificial intelligence tools (like ChatGPT or Midjourney) and consumer customers with the world of video games.
Nvidia GeForce RTX 4090 // Source: Anthony Wonner – Aroged
By taking this position, Nvidia sends a strong message to markets and consumers, demonstrating that it cares about the impact and value of its products on society. This strategic communication allows the company to redirect the public’s attention to its true centers of interest and areas of expertise.
Nvidia strengthens its reputation
Cryptocurrencies have long been criticized for their excessive energy consumption, volatility and environmental impact. By distancing itself from this controversial industry, Nvidia reinforces its reputation as a responsible company, concerned about the environmental and social challenges facing the world. Criticism and rejection of cryptocurrencies, by Nvidia, is not only a smart strategic choice, but also a clear statement of intent.
It is important to note that while Nvidia is openly critical of cryptocurrencies and their impact on society, the company has actually sold graphics cards to cryptocurrency miners. This situation can be compared to that of the sellers of pickaxes to the gold diggers during the Gold Rush. Although Nvidia does not explicitly admit it, it is evident that the company has benefited from the cryptocurrency craze and increased demand for mining hardware.
This stance may be understandable from a business perspective, as companies naturally seek to maximize profits and take advantage of market opportunities. However, it’s hard not to question the honesty of this approach, since Nvidia is now showing opposition to cryptocurrencies despite having profited from this trend in the past.
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