Cryptocurrencies add nothing useful to society, says chip-maker Nvidia

...is incorrect. The total crypto market cap collapsed because of interest rate hikes.

Nvidia's stock dropped 68%. Is that because it didn't bring anything useful for society? No. It was trading at a premium because of low rates.

I only wanted to point out that this article is inane.

[1] https://finance.yahoo.com/news/fbi-seized-40-000-couple-1515... [2] https://www.law.cornell.edu/wex/civil_forfeiture

They are a pretty big win for those who believe in personal liberty.

They enable people to buy medicine that is otherwise too expensive to get from official channels.

Fundamentally, that’s a kind of transfer of wealth in and of itself. My favorite examples were people with subsidized electric bills who kinda scored on that arbitrage until everyone wised up.

I think it's worth putting into perspective though that machine learning kicked off in the 60s, whereas there wasn't any notable progress on the byzantine generals problem until 2009 (and even the concept of proof-of-work wasn't formalized until 1993). Distributed ledger technology is still relatively young compared to machine learning.

just ask it ;)

What was a legitimate problem was being preferentially sucked off shelves by miners. When NVIDIA was 2x as good as AMD, and it led to NVIDIA cards being priced 2x as high as AMD, that was a problem. And that was happening - prices lined up perfectly according to hashrate, and AMD cards had lower hashrates because they had narrower memory buses and infinity cache didn't help mining. They were taking heat in tech media for failure to control prices/get supply under control (despite roughly 2x'ing their usual production) and potentially losing users to AMD

Solution: drop the hash rate by half. Now you are no longer preferentially being sucked off shelves and LHR cards should approximate the price of their AMD counterparts. You don't lose out on miner sales completely, but you're not disproportionately affected. And if there is a bust, you are both equally affected then too.

So it wasn't a fullhearted "we want miners OUT of the gaming market". If that was the case you'd have slowed it down by like 90-95%. They were happy to have the sales from miners, they just didn't want to suffer a competitive disadvantage relative to AMD due to miners gobbling up inventory.

I am not quite sure what to make out of the mining cards side of the equation. They have done this at least twice now (P104 mining cards, etc) but they never seem to lean into it fully in the sense of really shunting inventory heavily towards mining. And yet they know that a lot of gaming cards are being sold to miners, including big direct-to-farm sales from partners (who love it because it's bulk and they force the farms to disclaim the warranty).

Perhaps it's an artifact of how it's really partners doing the ordering of products (including mining cards - those are all sold via partners not direct from NVIDIA). If they're ordered as gaming chips you get gaming chips, and partners may not want to take the risk of leaning into mining too hard. Maybe if there was a harsher mining limiter it might force partners to actually make a choice on it instead of fence-sitting with gaming inventory, who knows.

--

On the other hand that strategy kind of missed in that AMD simply opted not to participate in the GPU market, when consoles were eating up 80% of their wafers off the top and the CPU market could shift their remaining wafers at 10x the margin of GPUs. See my other comment about the impossible boom/bust cycle of GPUs and AMD's answer is: simply don't participate in the GPU market during this cycle.

It took almost a full year for any of the 6000 series cards to show up in Steam Hardware Survey at a mere 0.15%. NVIDIA had 7-8% of the market being 30-series around the same point - and I doubt 30-series are being used in LAN cafes in china, that is a 1060/1650 phenomenon not one that hits all cards equally. And actually 6700XT rapidly overtook all three of the higher cards combined. AMD just barely made any of the 6800/6800XT/6900 series at all, for the first year.

You can't blame them when one $649-MSRP 6800XT with 520mm^2 of silicon and $200-300 of other BOM cost, could be sold as six 5800X processors (81mm^2 CCD, GloFo 12nm IO die) each with an MSRP of $449, or as 3/4 of an Epyc 64C that sells for $10k MSRP, with essentially no BOM cost. You are talking about selling the same piece of silicon for $200, $2700, or $7500, it's not a hard choice to make. And they could absolutely sell the CPUs at or above MSRP, and that's after cranking MSRP and dropping value SKUs already. So they did a token launch (as late as possible) to satisfy their legal obligation to investors and went and made some fucking money, and simply chose not to participate in the GPU bubble this time.

Increasingly I think the discrete GPU market is just a backstop for AMD. It's a place to soak up excess wafers if they order too much for CPUs and Epyc, and it's a slush fund of wafers if they have unexpected demand from CPUs and Epyc and consoles. It's not something they put an R&D focus on (a major chunk of RNDA1 and RDNA2's early-stage R&D were largely funded by Sony and MS) and it's not something they put first in their manufacturing priority. It's also why they're lagging on the features side of the equation - consoles are paying for the R&D and consoles don't care about tensor cores or video encoder quality or optical flow engines, and won't pay for it in their chips or even fund the R&D.

dGPUs are just a sponge to soak up any excess in the rest of the business, or squeeze a little extra out of. Not a focus anymore. Maybe that changes if they're the first to multi-GCD and have a real shot to win, but, in the current scenario they get 80% of the revenue for 20% of the effort and that's what they're doing.

--

Now the other side of the "AMD simply chose not to participate in the GPU market" coin: it's all still a single market and AMD has to wait for the inventory to burn off too, even if it's NVIDIA inventory. OEMs like Gigabyte, Asus, MSI, etc aren't buying RDNA3 GPUs for their beige boxes or laptops if they have a bunch of Ampere sitting around, even if AMD inventory isn't high itself. Same for the secondary market, it doesn't matter if you are selling new RDNA3 cards if there are a bunch of used miner cards at great prices and people are buying used instead of new. It's all one market.

Some of the drop in marketshare despite deep price cuts is due to exactly this: OEMs aren't buying right now. Not buying anyone, but what's sitting in their stockpile is NVIDIA cards. And AMD can't make the big deals with OEMs that make up the majority of the market - the DIY market is a fraction of the overall market and AMD is selling great there (see: mindfactory numbers) due to aggressive pricing, but OEMs had piles of Ampere they need to get rid of. JPR did have some errors in the last set of numbers but still, the numbers for AMD are not great even then and that's the reason IMO, it's not DIY sales it's OEM sales.

I think the fact that they launched laptop Navi 33 in January but delayed the desktop until June is due to this: it's an inventory problem, and there is a lot of dGPU inventory still piled up. Not theirs, but that doesn't really matter.

What are you talking about? The inaccessibility of the models and the heavy gatekeeping by the big players is leading to more and more open source models that can run on an average gaming GPU or a Mac M1. It seems like every day on HN there is another post on another super-optimized version of something that was once only accessible to those with huge server farms or cloud budgets. You're seeing announcements like Stanford's Alpaca that specifically mention how it can run on low-budget commodity hardware or a few hundred dollars in the cloud.

I'd say efficiency and optimization is one of the hottest areas in large language models right now, although the motivation is less for climate reasons and more for 'I want to do this on my own hardware and have no safety censors' reasons.

The most influential crypto companies were already incorporated in the west.

The price and market cap both collapsed. https://www.coinbase.com/price/chia-network tells me the latest daily volume is less than $5M USD.

But if you look at the original, Bitcoin, it's harder to make the same argument, as arguably, there is no "them at the top" for Bitcoin.

"As needed" is an interesting phrase. I'd argue that what we need from cryptocurrency is for it to move past the current phase where the only consensus it bothers with is account balances.

We need consensus about things that will help us collectively act to keep powerful entities like governments in check. As it stands, they're very good at dividing us against one another.

If you end up making some fiat along the way, that's fine, but the return on an investment in crypto is a world where the powerful are well-behaved because they're scared that the rest of us will turn our backs on the abstractions that give them power.

As it stands, that's not a credible threat, so it's reasonable to make investments that'll take things in the direction (which is, sadly, not the effect of most crypto investing).

How do those people collectively agree on the value of the USD? By looking at the fundamentals - the economy of the US, the stability of its government, the likelihood that it will make good on its bonds.

Money is power in a distinct way that freedom of information, in general, is not:

You don't need to believe in a (digital crypto) currency for it to hold value:

As long as someone else believes it, you can make them do things for that currency.

I believe this potency is what makes the scum of the Earth flock to cryptocurrencies.

I was working on decentralized systems back as early as 2001--notably, well before Bitcoin existed--and it frankly seemed just as true back then and we didn't even know how or if it was going to be possible for anyone to make the money part work. In 2009, when Bitcoin came out, I was too busy working on my federated iOS app store alternative for it to sink in what had happened as I remember barely taking note of Bitcoin and later not taking enough note when people tried to show it to me that something important had been figured out. I am sad that I saw people I even knew working on Ethereum and still didn't join the efforts until 2017.

But like, with permissionless systems, and when all the participants are anonymous, you have a really serious problem of how to deal with freeriders and spam. To the extent to which prior attempts at such protocols have worked they either are run by centralized cabals (Tor and its ~10 directory servers managed by Roger Dingledine and his friends), is based on barter and has severe / obvious limits on its applicability (Bittorrent), or--and this is the biggest category by far--only works because it is so niche and/or new that no one has so far decided to attack it (or, worse: someone did attack it, the attack worked, but the protocol is so niche that the people who built the protocol don't actually give a shit as the attacks aren't happening in practice... this is the situation with I2P). Hell: email has even become more and more centralized and less possible to remain anonymous, in no small part due to spam.

At best, you see people try to build a kind of reputation management system based on your IPv4 address, under the assumption that those are scarce. In fact, despite Tor being largely centralized (on the aforementioned directory services run by Roger Dingledine and his friends) it also relies heavily on IPv4 address scarcity as they don't know all of the server administrators (though Roger Dingledine does claim to "personally have met" 2/3rds of them, which I find more terrifying than relieving). This, though, only really works if you use a slow accumulation whitelist model (which is how Tor manages their high-risk exit nodes) as otherwise your protocol kind of becomes irrelevant in a world of IPv6 (which Tor has in fact struggled with, though they have better options here due to the design of the directory server cabal).

Regardless, if you are building up reputation surrounding IP addresses, you know what you aren't? Anonymous (because an IP address is a location tied to a user; and, if you are able to borrow someone else's IP address, its reputation is going to be poor, almost by definition). And, sure... that's sort of OK for some kinds of protocols: in the case of Tor, you want the users to be anonymous while the servers don't at all have to be (and, in a very real sense, can't) and so they can use this largely-centralized design for the list of servers to slowly build trust in new operators whose reputation they manage by their indirect identity, and then hopefully the users can be anonymous, right? (...Right?)

But like, the users being anonymous only sort of works on Tor because the users are by-and-large actively choosing to not be brats: the servers are donating resources and they are donating it to a cause, not because they are bored; and so, if you sit around using their bandwidth and good will to do nothing more interesting than stream YouTube videos all day--as a user in the United States who is not blocked from accessing YouTube or anything--you are considered to be abusing a scarce resource and people who find out try to make you feel bad. Maybe it works? But the result undermines the premise: everyone who uses Tor is supposedly someone who needs to use Tor, which means the FBI can and in fact did (as part of XKeyScore) just flag people who go to Tor's website for extra diligence.

If you wanted the worlds' Internet traffic to flow through it, with every user using much more bandwidth from the system than it costs them to send (as their bandwidth gets amplified as it goes through multiple other nodes) you need a way to dole out this resource in a fair way, building some kind of market for the resource; and, I totally do appreciate this answer kind of sucks, but the decentralized way to build a market is... capitalism, using some kind of money to compensate people for their efforts. You will find a similar need in any decentralized system to prevent bad actors from just monopolizing all of the resources (well, unless you decide to use an IP-based reputation management scheme... which would again undermine the point).

(Note: I work on a system designed to make this eventually work in the specific case of an actually-fully decentralized market-based Tor-like mechanism. No: it isn't something I am sufficiently proud of right now to want to sit around arguing whether the thing that we deployed fully solved the problem: I am just going to say we made a lot of impact and progress and leave it at that for today... however, I am still working on this problem space, I already know how to make this stuff better, but I have been distracted with personal issues... maybe you'll see something dramatic from me in the near future. But like, I frankly see no way of making anything even similar work without money in the design; and, if you do, then I beg of you to drop everything you are doing and either build it or tell others how to build it as the world needs to have decentralized protocols and the reason almost all of the decentralized protocol design has moved into crypto is not merely because it is lucrative: it is because, for the first time, it actually feels possible there.)

But so like, I essentially dare you to show me any decentralized protocol that allows anonymous users to permissionlessly participate even if they are actively trying to gobble up resources and even if they simply hate the protocol and chose to implement it incorrectly. That Bitcoin worked was a watershed moment in this space, and it did it by starting with the idea of using capitalism to solve a kind of lazy version of the consensus problem. It isn't the be-all-and-end-all of designs and it has a lot of holes, and yet it is still working despite a ridiculous number of people trying to use it at the same time and a number of people actively wishing it didn't exist. Did it get expensive at times? Yes. But did it just turn into a bunch of worthless spam? No. Have people managed to shut it down? Not yet! And later designs have been attempting to iterate on the mechanism by adding more functionality (such as Ethereum, upon which my team was able to deploy a probabilistic nanopayments mechanism similar to the centralized Internet startup PepperCoin) or increasing the performance (I had been particularly enamored with Avalanche). There are parallel tracks designed to improve the privacy and anonymity (such as Zcash).

This is, in all honesty, the future of decentralized systems. And yes: the existence of money as one of the early essential primitives means that for every iota of progress there are people who just try to cash in on the whole thing... but I watched this space take a full decade before anyone even figured out how to build a decentralized currency, and the progress suddenly made since then has been dramatic, with people figuring out how to build any number of decentralized alternatives to centralized systems that previously would have been unheard of... even if you want to poo poo it all because it is "hard to use" or "costs more", the fact that it works is amazing and should be inspiring.

https://cryptome.org/ap.htm

https://bitcoin.org/en/bitcoin-paper

https://en.m.wikipedia.org/wiki/Silk_Road_(marketplace)

https://en.m.wikipedia.org/wiki/Decentralized_autonomous_org...

https://techcrunch.com/2021/10/09/crypto-remittances-are-a-l...

> Those Sand Hill Road VC investments were definitely punk.

I remember fondly the very early years of bitcoins, when it was worth nothing. I was probably too naïve at the time and didn't see the libertarian agenda of a lot of people, but it really did seem like a lot of the community was made of cryptopunks, excited with this idea of a cryptographic distributed virtual currency. Something that felt like it came straight out of a sci-fi novel. At the time, I think a lot of people (including me) thought that it could maybe help people in authoritarian country, make international transfer cheaper and faster, and digitize banks which felt so behind (I remember having to still call my bank on the phone to be able to do a lot of operations).

This sadly very promptly disappeared. It should have been obvious that a lot of rule surrounding banking where there for a reason. Cryptocurrencies became widely used (and recognized) for its criminal usage, facilitating ransomware, scams, money laundering, financing terrorism and other criminal network. Sure it was fun, and innocent enough, to be able to buy a bag of weed "anonymously" from the dark web, but sadly a lot of usage was darker than that. Authoritarian country, and again it should have been obvious, didn't have much trouble regulating their usage to a point that it couldn't be safely used in a amount that was not insignifiant. But most just didn't care because it didn't actually changed anything for them. And then years and years of development, but no significant progress seemed to be made. Transaction where impossible to scale and became massively expensive and the fundamental flaw of the technology seems to be insurmontable. Ethereum came with a nice promise also, the idea of a global decentralized machine. Program that could be run "on-the-chain" and enforced contract, promising to get rid of the need of a third party. But it also became obvious that it had all the disadvantage of having no third party and none of the advantage.

The crypto community also manage to prove to a massive extent the usefulness of regulation. There was a time where every day there were multiple new cryptocurrency with a nice shiny website, a white paper full of buzzword and not much else, promising a ICO in a few days. Then once the whole pump and dump was done, it vanished from existence. Over and over again. At some point ICO where replaced by NFT. Different name, same result. After the hype (a.k.a the marketing period), you were left with a useless and worthless digital token, and the only way to get rid of it was trying hard to convince other that it was worth anything.

Although I have to say, "fake it until you make it really" seems to be a core value of any crypto-enthusiate. Despite still having no actual usefulness, outside of being a vehicule for financial speculation, so much money was dumped into the whole ecosystem that it still look like a legitimate business. Crypto.com is (was?) a prime sponsor of F1, BtcTurk had advertisement plastered all over the newly built Atatürk Airport, NFT were "brought" by very famous people, ... And in many way it was successful enough to keep attracting investment, from very serious business-suit wearing people. Will they learn from FTX ? Why would they ? They didn't learn from Mt. Gox, Theter, Ripple, the many fraudulent ICO, the obvious pump and dump. If anything, everyone turns a blind eye because at this point, you either avoid crypto like the plague, you are part of the scam, or you are the one getting scammed.

I really miss those days where it seems like a sci-fi tech. In many ways, I still want to believe, but cryptocurrencies where born on a flawed premise. They are dead, they were always dead and they will remained dead.

We get a lot of obviously not-ready-for-prime-time stuff hitting production because it's too lucrative (see any number of DAO and smart-contract schemes that imploded), and there's a systemic allergy to input from the outside world as to what normal consumers want (things like reversability and systemic backstops), because the current system appeals to speculators.

I'd see the case for "useful in the future" if there were more efforts to answer the no-breakthrough-tech-required "faster horses" problems people have with mainstream finance. FedNow is coming in months and will give me settlement in minutes for pennies, and likely very solid legal backing. This is faster horses. Crypto might offer similar settlement speeds, but I understand it depends on the particular chain I choose, and to an extent, how much I'm willing to pay to push the transaction through. I'd also wonder how reliably the courts will accept a crypto paper trail if there's ever a dispute on a payment. (Not necessarily because the trail is bogus, but simply because it's not a well-established precedent of who and what can be trusted)

You could say that about any investment surely? Or do we assume all VC funded companies are altruistic endeavours only?

Those that held pre-2017 are the ones that got in early.

The rest could probably make better returns speculating in the US markets.

No, it isn’t. Nobody said this, certainly not GP.

What is canon is that US military might gives its economy a level of stability not enjoyed by any other country, and when combined with the size of the economy, makes the dollar an important asset for nearly everyone.

Most countries in the world don’t use the dollar, and yet the dollar remains hugely important to those economies. Who is suggesting the US is going to invade those countries?

Blockchain and Web3 ended up mostly being zero sum games. But that doesn’t mean it’s not capable of being so much more. Who remembers the silly <BLINK> and <MARQUEE> tags? The Web has come a long way. And personally, for all its faults, I find Web3 better than Web2 in terms of economics - rather than giant server farms and Big Tech monopolies, we have UniSwap and Aave Marketplace and Filecoin etc. The network is owned by the participants and no shareholder class to extract rents.

Well, ironically AI can be a far bigger negative for society than blockchain.

AI can literally destroy all our systems. Its upside may be far lower than its downside.

Yet HN loves AI and hates blockchain. Predictable this will be silently downvoted into oblivion because it challenges that narrative, but I would have definitely preferred actual substantive discussion.

Thanks, I appreciate that. I don't have any financial or personal stake in crypto so I don't have any issue criticizing it and I am pretty pessimistic about it at this point. But the irrational hatred and dismissal of crypto sometimes bothers me more than the irrational optimism.

I don't think the safety net argument works because there is so much physical and political infrastructure that crypto depends on in order to function. To run a cryptocurrency you still need a functioning power grid, datacenters, internet, and chip manufacturing/importing, all of which depend on a pre-existing political system and economy. I find it implausible that we will migrate all of these systems to run 100% on crypto with the current state of the technology. You could argue that it's feasible with some hypothetical much-better-bitcoin, but that's just speculation at this point and not something I would want to stake the future of whole societies on.

See https://www.cnn.com/2022/05/06/tech/nvidia-sec-settlement-cr...

"Senior executives at the company sought to capitalize on that demand with a specialized line of cards just for cryptomining, the SEC wrote, but Nvidia salespeople and the company’s internal estimates suggested cryptomining was still accounting for “a significant factor in the year-over-year growth in Gaming revenue.”"

They settled with SEC for hiding profit cannibalization from investors.

Also as the article hints on the hypocrisy, Kagan built a company selling to high frequency traders.

I think the hypocrisy and sourness are abundant qualities in this statement.

Because you were born in a stable democracy. Congratulations. Enjoy your privilege.

And I mean, I mostly agree with you, crypto seems to be a hive of scum and villainy, at the same time having every moment of our lives tracked to be judged by the whims of the future is a very risky proposition.

Go buy some Cuban cigars. Go start/put on an anti-Modi demonstration in India.

You've got nothing to hide exactly because you haven't found yourself on the "wrong side of the tracks" yet. I assure you, the point will come when you sift into a disenfranchised bucket; then you will.

One idea of capitalism, is that there are indirect benefits to everyone, from the actions of private self-interested parties. If crypto somehow allows more people to work together (I don't have an opinion if this is true or not), then that alone should be enough for it to fit into the western ethic.