GPU makers increasingly disengage from crypto miners Nvidia and AMD have signaled they're trying to disengage from the blockchain market, preferring to instead sell to gamers. Cryptocurrency miners have been a blessing and a curse for GPU-makers. The companies initially embraced the demand miners created, but then worried as that caused GPU shortages which made it difficult to …
Well it is... just not intentionally. Even then, I doubt they care where their sales are coming from.
As for trying to break their products to not service crypto-mining, these can only really be done as an artificial limit, which from my understanding the miners are managing to get around anyway.
They're not miners. Miners dig up useful stuff, ore, coal etc....
These people are chancers. Crypto currency isn't currency, no fucker did any work at the start of it, it doesn't represent any actual value other than the electricity wasted to produce it.
But the promise of all that "wealth" for nothing though, eh?
"Neither do regular FIAT currencies have any representation of actual value.
They have value because we agree that they have value, that's all."
I think the comparison is abusive. FIAT has value as a representation of human activity and how it can be exchanged: 4 hours of person X costs Y and Y can be then used to purchase something entirely different.
So there is tangible stuff behind FIAT, contrary to crypto where there is, indeed, nothing except what some few people agree in value.
>> They have value because we agree that they have value, that's all.
> FIAT has value as a representation of human activity and how it can be exchanged: 4 hours of person X costs Y and Y can be then used to purchase something entirely different.
You just gave a concrete example, illustrating how the previous statement works in practice, and called it a counterargument.
That is no counterargument in actuality.
You see, the cyrpto fanatics' constant attempt to validate their cryptocurrencies with a defensive argument that "FIAT currency is the same!" is hogwash, using the belief that while FIAT currency is not backed by bullion reserves (the single reason why these knuckleheads use this fallacious argument in the first place) it *is* backed by the individual nation's GDP output.
FIAT pound sterlings and dollars are not backed by gold nor silver, but ARE backed by the government's stability granting their population the ability to support and maintain a substantial GDP output. Nations that do not have large GDP, and thereby large international trade volumes, either therefore have small-valued FIAT currencies OR must have their currencies backed by precious metal reserves.
The ignorance of the statement that "Crypto is the same as FIAT!" simply shows that the speaker does not understand the concept of trading one material value, precious metal reserves, for another, historically-proven productivity in creating goods for trade, AKA GDP output. The entire point of having precious metal reserves is that it can be traded with other parties for alternative items of equal value - precious metals are fungible. If your GDP creates 1 metric ton of steel, that steel has a value on the trading market and can be exchanged for other items of equal value - the steel is also fungible.
Therefore, boiled down to theory, both the precious metal (say, gold) and the steel have equal worth as a tradable asset in a trading market. They may not be of equal value, humans currently value an ounce of gold far more than an ounce of steel, but a trade can be made simply by adjusting the volume of each asset during the transaction.
Therefore, precious metals and steel, in this example, can be exchanged - we can make steel a reference reserve metal, if we the population of planet Earth damn well pleased. So a nation that can make one value, steel, has just as much market trading worth as a nation that holds reserve metals, say gold, as long as the volumes can be balanced for equal value. So a currency that is based on the structure of the nation that can make steel (for example) can have the same worldwide trading value as a nation that holds precious metals.
TL;dr
In other words miners, STOP with hokey "But FIAT!" because you are trying to create a valuation for your computational outputs. Note how volatile crypto is? Because nobody locks in any value, the "value" of crypto is simply if the person on the other side of the trade believes in it.
Or not.
It isn't backed by anything. It is, in a quotation from War Games, "A computer-generated fantasy" and only has a value to those few who are willing to play the game. It can disappear, be erased from storage memory, even more quickly than it was created. FIAT is based upon goods, from real material to traded financials, and has a 'base of reality' that you'll never get.
So, deal with it.
Or “the rule of law” as we mere slaves call it.
But the crypto people fail to understand that crypto requires exactly the same things as fiat to be trusted anyway. And then on top of that, it has additional risks. But precisely no risks are avoided.
If you live in Zim, and use only crypto to buy stuff, but Mugabe kindly requests you to give him some or all of your money, then you will do exactly what he asks whatever your philosophical position.
Meh.
Tell it to the Weimar Republic...
or El Salvador
It's all ultimately backed by trust in "the system".
You don't trust BTC et al, that's fine.
You might not trust, say, the Government of Zimbabwe.
That's a problem if you live there.
The only difference between the Zimbabwean Dollar and USD is trust.
If Smurfberries had a market cap of 1 Trillion USD, then sure.
If you can convince someone to accept a a certificate that promises "to pay the bearer" a certain number of smurfberries... and they can convince someone else... and so on...
No smurfberries have to actually exist.
FIAT has value as a representation of human activity and how it can be exchanged: 4 hours of person X costs Y and Y can be then used to purchase something entirely different.
But that representation is come to by common agreement.
, contrary to crypto where there is, indeed, nothing except what some few people agree in value.
That's the same thing.
So there is tangible stuff behind FIAT,
No, there isn't, that's the point. It's the international equivalent of going 'I'm good for it...Honest...'. With something like the gold standard you have a tangable amount of stuff (eg gold) for a given amount of currency. With FIAT you have the trust in the issuer.
Bitcoin is a first attempt at a crypto and it's not great, but the idea of a global, distributed, immutable ledger and currency possibly has merit in an increasingly global world.
"FIAT has value as a representation of human activity and how it can be exchanged: 4 hours of person X costs Y and Y can be then used to purchase something entirely different.
But that representation is come to by common agreement."
Quite right. But gold, one of the reserve metal standards in human financial trading (the other is silver), only has a value due to the fact that the humans have come to this belief by common agreement.
Rhodium, palladium, ruthenium and platinum - the platinum metals group - are ALL rarer than gold. Yet we do not use them as a reserve metal, completely destroying the belief that we use gold due to it's "rarity".
Gold is not actually that rare, compared to many other items on planet Earth. But we have granted gold a special status: human, by common agreement, have decided that gold is 'unique' and worthy of an exchange value that is higher than its actual physical properties demand of it. And we then decide to lock the values of our varied exchange tokens - money - to its 'inherent worth'.
But what inherent worth does gold really have? If we had a comic strike-caused nuclear winter next week, will your 3 pounds of gold reserves keep you alive? Only as long as other humans are willing to accept your gold in trade for things that you will actually need, water, food, shelter. But if there is no more world economy, if survival-level life is all that there is, what good is gold?
Nothing. It's worth, nothing.
Yet, humans hoard, cherish and declare it worthy of special treatment.
The idea, the theory, of FIAT currency is that the trusted output of human endeavors, labor, can and should be valued at the same level as a [seemingly] randomly-chosen metal. And, if it is, we can assign a monetary trading value to that trust. Therefore, the trust can be traded, the trust can be assigned a worldwide reserve value.
The concepts are not that great of a leap. But old-fashioned people wish to hold something in their hand that they can consider "worth", ironically whilst they expect other humans to hold their personal worth in balance during any interaction. For example, they expect to be hired at a pay scale before they ever output a single work-hour of labor to the employer, based upon an assessment of personal worth to said employer. They are trading their own FIAT personal worth, that their prior work is worth a comparison to their promised work, and expect fair trade for this before the work for the future has even begun.
"So there is tangible stuff behind FIAT, ..."
The tangible stuff is only "behind" FIAT insofar as there is a large enough consensus that accepts it as such.
"... contrary to crypto where there is, indeed, nothing except what some few people agree in value." (my emphasis)
So it's really just about the scale of the consensus.
As an aside, in the early 00s I worked for a couple of years for a hedge fund (algorithmic trading platforms). If you'd asked me before that if I could say what I thought "money" was, I'd have been reasonably confident that I could come up with a reasonable answer. Since then, not so much.
You can pay taxes in Fiat currency.
Debt is the origination of its value...as in the king ordering a lord to "send 10 men to join my army for a month or pay me 50 groats....if you dont have any groats and can spare no men then I will pay you 20 groats for every wagon load of Hay or decent horse"
Crypto does not have that advantage.
I am not arguing against crypto just clarifying your statement.
<blockquote>They have value because we agree that they have value, that's all.</blockquote>
Fiat currencies have value because the people who write the laws, have guns to shoot you with, run the jails, and decide who to throw into them, tell you they have value.
Those who print the fiat currency want to be paid the taxes (they say you owe them) in their fiat currency. You can't pay owed taxes in crypto coins.
If you get right down to it, nothing has intrinsic value unless your life depends on it. Air, water, food, shelter and medical care. And even in those cases, the value is highly variable based on current availability. But you very likely have to pay taxes on your water, food and shelter.
For a great many if not all people who transact in cryptocurrency, the "crypto" is more important than the "currency". They wouldn't care if governments taxed it if that could be done without said government being able to trace it.
Another inherent problem with crypto: KYC regulations making it very easy for the government to be able to trace it (unless you're a miner). All the advantages of crypto are getting stripped away by governments because those advantages were things the government could never compete with.
I want to win a race, but I don't want to have to train and run faster than the other guy. What do I do? Beat his f*cking shins to mince with a breaker bar. It's not the most elegant or sportsman like solution, but then again, governments have never seemed particularly fond of those when something so overtly threatens part of them.
While I feel similar with the way that cryptography in general has been treated by governments (We *ALL* remember the export controls on crypto in the early 90's), the whole thing with blockchain, and bitcoin (and all it's clones/derivatives/etc.) is that it's using increasing amounts of power and compute for something that is at the end of the day, a thing to barter with.
Unlike NFTs, which IMAO are just pointless- point me out a *GOOD* use case for it, and I might change my mind.
NFTs are just a type of smart contract. There are plenty of good use cases for those in general.
But for a dumb example, how about this... Taken at it's most basic, an NFT represents ownership of something tangible. Now what if that tangible thing were only accessible if you had the NFT? Like, for instance, a car. Imagine purchasing an NFT that resided in your "wallet" on your smart phone that was the digitally signed registration certificate used to open and start the car it represented.
So what happens when I sell the car, or give it to, say, a technophobic parent who wouldn't know an NFT if it bit her on the leg?
There's already a well understood process for tracing ownership of a vehicle, and that's by using title searches based on the VIN that's part of every car made since the mid 1950's (with a few exceptions), and agreed on by practically everyone world-wide.
Better example please; I'm not convinced.
the whole thing with blockchain, and bitcoin (and all it's clones/derivatives/etc.) is that it's using increasing amounts of power and compute for something that is at the end of the day, a thing to barter with.
That was a design choice in that it was intended to prevent there from being an infinite amount of a given currency. What happens when quantum computing matures a bit more and there is essentially an infinitely greater amount of the stuff to be made for the same cost of resources?
What ifs on quantum computing does not make a currency.
Block chains have great potential.
Crypto currency however by design require all the computational power there is. So when quantum comes even more will be mined to the limit of available compute, it will become more expensive to transact with, and so some newer cryptocurrency will come along.
So by design a given cryptocurrency has an expiry date or perhaps a non longer fashionable date. And it is so trivial to create another one. Eg Btc vs bch
What good is a Crypto currency too expensive to mine (and thus transact with) or too cheap to mine (so it has no value)? Whatever goldilocks cryptocyrrency will be trendy and then die away. This makes it difficult to be an enduring store of value.
There is nothing differentiating the 6000+ crypto currencies out there other than purely subjective criteria. You could have made a lot of `value', on any of them, just like horse racing.
In terms of transactions it plays the same role as a black market or secret gambling ring.
Buying anything with Btc is very much more expensive, so you need to have made profits on it, which means the volatility is a requisite.
Other than people saying one day it will be great nothing in practice when using it is. And those people hold cryptocurrency so they'd say that wouldn't they?
How do you tell the difference between the Dutch tulip bulb hysteria and genuine enduring collective agreement of value?
"So when quantum comes even more will be mined to the limit of available compute"
That's not how it works. The mining difficulty adjusts according to available hashing power. So if quantum computing does become mainstream exactly the same number of Bitcoin will be produced regardless. The block rate, reward and output will remain the same etc.
The difficulty already adjusts every X blocks according to the hashing power prese t at a given time.
This is why when tons of Chinese miners disappeared, Bitcoin was still produced at the same rate.
Gold also has no more value than what we attribute to it due to is apparent finite availability. Difference is (some) crypto is absolutely finite (like BTC and ETH, there is a max number that can ever be mined) but what happens when next year intergalactic travel becomes possible and somebody finds a moon made entirely of gold?
The value of fiat money only exists because it used to be backed by the gold standard. Most central banks stopped using that since the 70s and it's up to us to trust "them" to continue creating value for money.
That society has now valued BTC at $50l - $60k is a different discussion but BTC is basically digital gold.
That's the marketing blurb, but society also valued enron, dotcom, tulips, and so on.
Collective acceptance of currency requires transaction volume in the economy, not on exchanges. Bitcoin has near nothing of that, and what it does is largely illegal activities.
So pick a side - is btc a tulip or a currency replacement. There is nothing in the crypto currency marketing blurb supporting the latter.
No, BTC isn’t digital gold. We have *already seen* the counterexample for BTC being a finite resource, multiple times.
Your argument that people would go hunting for gold on asteroids, only happens if it’s mining cost on Earth rises sufficiently to make that economic.
The equivalent for crypto, isn’t mining bitcoins, it’s investing in marketing to invent new cryptocurrencies. Ethereum. Doge. Lite. Cardano. The total invested assets in crypto far exceeds the theoretical limit on total BTC, even when denominated in BTC. There are your crypto asteroids!
Every day new people reach 18 who don’t have any bitcoin. If BTC were the lord of everything, then those people can either labour as commis chefs to the BTC wealthy in the hope of a micro BTC tip…..or invent a new crypto where they are wealthy ones. Guess which one they choose.
It can be fashionable for the crypto people to say “I don’t know which one will be the winner, so I spread the risk by owning them all”. The point is, tomorrow’s crypto-winner hasn’t been started yet, so you can’t own it. And that will *always* be true. It’s a cash fire, always waiting for the next big thing.
Blockchain has a huge number of practical applications (indelible chain of evidence, distributed auditability of transactions etc), Burning electricity to generate a growing pile of speculative currency with no tangible backing of state sanctioned promissory debt (which ultimately, is what currencies are built on - the promise that the people a county are collectively "good for it") is the absolute bloody worst use of the technology.
Rather typically though, that's the application that receives 99% of the attention and effort... Humanity eh?
First, no asset - crypto, fiat currencies, stocks, commodities, food, cars, Pokemon cards, everything - has an intrinsic value. They are all valued based on what price a buyer and seller can agree upon. It is all based upon the basic concept of barter.
Certain assets have facilitated barter. Crypto has, in some cases, as has fiat currency, in many cases. The primary function of these assets is to convert them into real things, like dinner.
The primary difference between, say, Bitcoin and the US Dollar is the notation on the bottom of a US dollar: "Legal Tender for All Debts, Public and Private," Similar laws exist for other fiat currencies but the only country with a law like that for Bitcoin is El Salvador.
The so called USD tether cryptocurrency backs more fiat dollars than the cash equivalent held in all cryptoexchanges. How is this possible if the collective value assigned by crypto currency backers is actually grounded in real value?
That make them speculators /gamblers/ponzi peddlers.
Oh come now, there many disadvantaged and oppressed ransomware workers, gunrunning workers, drug dealing workers, tax evasion workers, and other shadow dwelling workers for whom crypto is the only chance they have to get their daily bread without being harrassed and detained.
...except for the ground breaking maths and computer science.
Bitcoin solved the Byzantine generals problem with proof of work. People seem to miss that point.
Whether or not you see Bitcoin as a legitimate financial instrument, you can't deny the progress that it represents mathematically and computationally.
https://fiatmarketcap.com/
But what does that mean relatively speaking?
Co2 output has increased in line with the decline of pirates in the Carribbean.
Are we comparing the value of currency in circulation relative to co2 output or are we comparing the co2 output per capita in a given economy?
Cute but wrong comment.
Bitcoin mining is getting something out - the unallocated millions of bitcoin still in limbo. We all know where this bitcoin is and mining is how you get it.
Nor is "useful", the least bit convincing. Gold has very little societal use - its value rests almost entirely on belief of its value. The same can be said for gemstones, art, stamps or any other collectible.
The cryptocurrencies aren't unique or limited - the 5000+ crypto in existence, with one coming out pretty much every week or several days, if proof of that. Nor am I the least bit convinced that even bitcoin has much of a future given its enormous electricity overhead.
But most importantly - there is a basic premise wrong with any attempts to talk about fiat vs. crypto: the law.
Fiat is mandated by law as payment for any debts, public or private. Crypto is not.
Fiat - particularly bank accounts - have all manner of regulatory apparatus around them. Crypto does not.
But, some of this can change and a little has changed already. The existence of CUSIP accounts at major financial institutions to hold bitcoin is one prominent example. CUSIP are custodial protected accounts - traditionally used for stocks and bonds but now expanded to include crypto.
Un-nuanced views on crypto are all wrong. I still think of crypto as nerd art - and bitcoin as (relatively) Rembrandt vs. shitcoins as street corner portraits, but that's just a personal view.
The problem with the crypto mining market segment is that it is incredibly fickle. Rising crypto prices can cause a huge peak in demand and falling prices and worse still government intervention can kill that demand with no notice. There is money to be made but if you decide to expand production facilities to exploit it you could very easily be left with a big empty factory and staff you need to let go. The gaming segment has a much more predictable demand to service. It's rather unfortunate that the miners are happy to buy a product that is optimized for gaming and not mining.
"Dropping" is NVidia's watchword. They dropped their stereo 3D platforms without looking back, they'll drop their VR support for a completely new and incompatible tech the second they feel like it. I'm not even sure it's linked to profit in any real way. The crypto miner market is fickle? Nothing like as fickle as NVidia's marketing pushes.
"Cryptocurrency miners have been a blessing and a curse for GPU-makers. The companies initially embraced the demand miners created, but then worried as that caused GPU shortages which made it difficult to project revenue."
Funny to hear crypto's volatility/opaqueness aspects is propagated to projected finances.
As we know, the terms "volatility" and "opaqueness" are not really a CFO's best friends.
The card in my main PC went *phut* recently, and the only viable replacement option I had for it was to refit the old card it'd replaced about 3 years ago - I simply wasn't prepared to pay the inflated prices being asked for a card comparable to the one that'd died, and for the sorts of prices I was willing to pay I'd have ended up with something barely any better than that old card, so old card it was.
I was fortunate to have still had that old card available to me as a fallback option - imagine how utterly pissed off you'd be if, instead of merely being unable to upgrade your system, you were left with a system that was completely useless unless you were willing to remortgage your house just to get the parts you needed to repair it...
Mind you, if the hardcore miners would stop at merely hoovering up 5 cards each then things might be OK supply-wise, but when you see some of them openly proud at showing off their rigs running double-digit numbers of cards, or showing off photos of a stack of newly purchased cards they managed to get at retail pricing "because they know someone who works at <electronics retailer> and got them put aside for them", *that's* when it really starts to get annoying for those of us who are just after one of the bloody things and don't have friends in high places.
And don't get me started on the other miners who've also got fed up with the lack of desktop cards and have adopted gaming laptops as their mining hardware of choice, leading to availability problems/price hikes on those as well - in addition to my desktop PC, i've also got an old laptop that I'd really prefer not to have to spend a day stripping down to the chassis and rebuilding with new parts just to keep it going for another 4-5 years, but looking at the prices of equivalent replacements makes me shudder. Mind you, considering most of the laptops these days come with those godawful clicky touchpads rather than seperate buttons, I may end up rebuilding it just to avoid throwing the new one out the window 5 minutes after I start using it and the mouse pointer starts to go crazy just like it does on every other craptop fitted with one of those abominations...
*and breathe...*
And what's even more aggravating is Nvidia killing the resale potential of mining cards. While it's annoying that you've got to pay so much for a card now, Nvidia's strategy with headless mining cards to ensure they can NEVER be re-sold into the gaming market eg next year
Wasting energy is the problem with crypto mining.
Yes. This. A hundred times this.
Even if you built a space heater that generated heat as a by-product of mining bitcoins you'd still be wasting energy because a heat pump would give you the same heat for less electricity.
All proof-of-work mechanisms are wasteful in this way, and always will be because the "work" exists only to satisfy the proof and not to achieve anything meaningful or valuable.
Did I read $7.1 billion in Q3, of which only $105 million was attributed to coin miners? I know common core math is all the craze I could be doing it wrong, but isn't that like only 1.4% of Nvidia's revenues? Kind of a mouse fart in the scheme of things.
Oh, and Reg.... I love articles that have anything to do with Bitcoin. I make a bowl of popcorn and read the comments. Very entertaining to watch the people who bought Bitcoin when it was cheap versus the people who wish they bought Bitcoin when it was cheap.
Nvidia and AMD are both playing games, the GPU shortages were certainly benefitting someone. Witness the retail price hikes. Either way there are a lot of amps going up in waste heat, adding measurably to energy demand and dependent on the mode of generation.. potentially adding significantly to global warming. What’s unclear is what happens to crypto fortunes when quantum (or photonics) comes of age.
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