I have a dumb theoretical question, but I genuinely don't understand the answer.
Why wouldn't nvidia and amd or any other card maker just keep the cards and mine all the cryptocurrency for themselves?
Why wouldn't nvidia and amd or any other card maker just keep the cards and mine all the cryptocurrency for themselves?
a 3070 with an average 60 Mh/s: https://whattomine.com/coins/151-eth-ethash?hr=60&p=120&fee=...
Like, the premise is supposed to be that if there is that much profit to be made mining, people will mine, the hash rate will skyrocket, the block production time will get too low, and the hash difficulty will rise until the profit you can make is low enough that you aren't sure if you want to do it anymore. Does the difficultly just not rise fast enough?
Or like, is this largely just because the price of Ethereum has gone up "too quickly" in the past month? If so, does this calculator take into account the incentive factor that if people actually do this the difficulty will go up, and so this $7 of profit today might be $0.50 of profit in a month, and maybe you will fail to pay off your hardware investment fast enough?
Or is there just something really weird going on in this market that I don't understand (and would love love love to learn about)... maybe it literally is just as simple as "there aren't enough graphics cards to go around, and Nvidia's disinterest in making profit in this way--even temporarily--is the strongest current limit on hashrate"?
https://www.wsj.com/articles/tesla-makes-more-money-trading-...
I am not kidding. It seems a substantial proportion of TSLA buyers aren't really interested in its fundamentals but like what Elon tweets out.
Tesla simply took some of their cash and invested in Bitcoin, they didn't shift production or pivot their business.
The fact that they made money off of the investment and whether or not it was more than their revenue is irrelevant, the move didn't affect their core business, it was just lucrative.
According to that article if you split out the emission credits as well then they've made around -200% more profit selling Bitcoin and -600% more profit with emission credits than selling cars.
The fact that both are negative should tell you something's gone awry.
[1] https://old.reddit.com/r/dataisbeautiful/comments/n0jxyt/tes...
Lots of people enter the pyramid because they have seen early investors benefit greatly and they want to benefit too. It works very well until people start getting out of the pyramid(selling) and the same thing happens in inverse, people want to recover the money they invested and price plummets.
There are two main reasons a big company like Nvidia can not mine for themselves:
1. Nobody will enter the pyramid in the first place just for enriching Nvidia. People enter a pyramid because they have seen their neighbor making money "out of nothing" and they get the Gold Rush themselves. Like a virus the Rush is contagious by people between them.
2. When prices go up everything is happiness and good feelings. When prices go down the people that have lost their savings will get mad at the company that benefited from their own ignorance or greed.
I think your viewpoint could use some revision. You’ve either described any typical investment but I Uber it as a pyramid or you misunderstand the goals of crypto.
If they suddenly changed strategy like this, their stock price would be hammered instantly and there would be a clamour to replace their CEOs and boards.
Essentially, this move would wreck their basic business. And dropping that business for crypto is very risky. It is also probably not what investors would expect.
Sort of. It's a matter of establishing trust with buyers, holders, and the ecosystem. If a hypothetical 51% owner behaved as a good citizen (which is to say, their incentives were publicly aligned towards preserving value rather than exploiting double-spends), the confidence wouldn't necessarily erode. (Contrast with a nation-state or other hostile actor who performs a 51% attack with the express intent of theft or undermining trust, which has happened with smaller cryptos.)
The three largest BTC miners combined have been well over 51% of the hashpower for years now, and they could collude to crash or exploit BTC if they wanted; it's simply not currently in their interest. Yet more evidence that while Proof of Work was a clever hack in the original BTC whitepaper, it doesn't inherently lead to decentralization, and is functionally indistinguishable from Proof of Stake with extra steps.
They'd have short term massive gains but it wouldn't be sustainable.
It's a way of artificially segmenting the market.
Bitcoin costs more to mine than the power bill you'll receive. This is why increasingly most malware happens by stealing power one way or another. And I don't think NVidia and AMD are in the stealing power business.
he's talking about cryptocurrencies in general, not bitcoin specifically. Mining ETH with recent-ish is currently profitable unless your electricity is very expensive (50+ cents). Besides, bitcoin mining is dominated by ASICs and there really isn't really any point in using hacked computers to mine it because there are more profitable coins (ones using ASIC resistant algorithms).
They're right where they want to be.
I wonder if the corporate psychology is similar to human psychology. In which, far from being run by a green field thinker like you, they are short-term oriented, and mainly backwards-looking for the sake of emotional security--we already know best what works for us.
Ok, I understand that NVidia does not want to mine themselves, but why on Earth won't they just raise the prices to the level miners are willing to pay?
"We want to sell to gamers, not miners" is the stupidest excuse ever. Isn't capitalism all about selling to the highest bidder? Why do they even care about who buys their product?
EDIT: Also, think about this: gamers that are considering upgrading their hardware get additional incentive - Etherum mining makes buying this new, shiny GPU basically free. Typically, after 9-12 months the initial investment is paid off. Without the possibility of mining many gamers will delay the decision about buying a new GPU, hurting NVidia sales further.
It would be like FB shutting down the blue app and pivoting to Tinder.
Capitalism can be about that, but there's a lot more to it than simply charging the highest price possible on every transaction. For example, loss leader products and free trials are common across industries. I don't have any insight into Nvidia's thinking specifically, but they might believe that cultivating the gaming market by not pricing gamers out of their product in the short term has much more longterm value than going all in on of the most volatile industires in the world.
It's not their business. They've built over the many years, a very defensible business out of expertise (and IP). That expertise is unique and resilient to the whims of a speculative investor hive-mind.
More practically, they just wouldn't be able to compete. Against companies that build ASICs specifically for mining, the tech they have, while is viable for the small-time gamer-miner demographic, does not have good returns on a larger economies of scale.