Nvidia Says Crypto Adds Nothing to Society, Despite Profiting From Mining
Computer hardware manufacturer Nvidia has profited off of the cryptocurrency mining industry in recent years—but now CTO Michael Kagan has reportedly said that crypto does not “bring anything useful for society,” according to The Guardian.
Instead, Kagan hopes that NVIDIA products are used for artificial intelligence (AI) development rather than crypto mining.
“All this crypto stuff, it needed parallel processing, and [Nvidia] is the best so people just programmed it to use for this purpose,” Kagan said. “They bought a lot of stuff, and then eventually it collapsed, because it doesn’t bring anything useful for society. AI does.”
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While Kagan argues that the crypto industry has “collapsed,” Bitcoin and Ethereum, the two largest cryptocurrencies by market cap, have regained value in recent months. Bitcoin is up 17% in the past month, and Ethereum is up 7% per CoinGecko data.
The emerging Web3 gaming industry has also seen substantial venture capital funding in recent months. But Kagan simply doesn’t believe that crypto has merit.
“I never believed that [crypto] is something that will do something good for humanity,” he added. “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.”
Kagan did not immediately respond to Decrypt’s request for comment.
Nvidia has a historically mixed relationship with crypto. Before Ethereum’s move to a more energy-efficient proof-of-stake model in September 2022, 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.
Combined with a pandemic-related chip shortage, the cost of GPUs skyrocketed 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.”
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Despite Kagan’s dislike for crypto, Nvidia has profited off of the industry for years. The firm’s PC original equipment manufacturer (OEM) revenue jumped 200% in 2017, with Nvidia writing that the spike was “due primarily to strong demand for GPU products targeted for use in cryptocurrency mining.”
Last year, Nvidia paid the U.S. Securities and Exchange Commission (SEC) $5.5 million in fines for failing to disclose that its gaming GPUs also saw success because crypto miners were buying up those products en masse as well.