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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 mi

• warent 5y ago
  Probably because it's just not their business. They don't need to confuse their objectives with bitcoin to get rich, they're doing exceptionally well without it
  • amelius 5y ago
    Then why is Elon Musk trading Bitcoins? Tesla makes more money trading Bitcoin than selling cars. https://www.wsj.com/articles/tesla-makes-more-money-trading-bitcoin-than-selling-cars-11619517615 https://www.wsj.com/articles/tesla-makes-more-money-trading-...
    • rvanlaar 5y ago
      Tesla stopped accepting bitcoin. https://abcnews.go.com/Technology/wireStory/tesla-stop-accepting-bitcoin-car-payments-77656963 https://abcnews.go.com/Technology/wireStory/tesla-stop-accep...
      • amelius 5y ago
        This was about trading Bitcoin, not accepting it as a payment method. Plus, it doesn't really change the question.
    • Daishiman 5y ago
      Because Tesla's most valuable product aside from the cars is the memes. 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.
      • FridgeSeal 5y ago
        I suspect this is because he’s successfully generated a cult-of-personality among fans, and crypto-communities can get pretty rabid (positively and negatively) when their chosen celebrity does anything.
    • throwaway292893 5y ago
      In addition to the revenue from selling cars. The GP was asking why Nvidia doesn't stop selling their cards and use them to generate bitcoin as a mining company. 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.
    • contravariant 5y ago
      This is just an uneducated guess but is it possible that Tesla is just a company investing heavily in R&D of cars, and hasn't really begun to run a profit yet alongside some somewhat profitable speculative Bitcoin venture that Elon Musk's somehow put under the same roof? 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.
    • IncRnd 5y ago
      Tesla and Nvidia are entirely different from each other. Tesla's business model has been built on government subsidies, while Nvidia's business model is to sell product. One needs to create profit somehow, and the other is able to alienate one segment of purchasers in preference of another.
    • lottin 5y ago
      Just because Elon Musk does something it doesn't mean it has to make sense. Tesla's shareholders can trade bitcoins themselves. They don't need Tesla to do that.
    • heavyset_go 5y ago
      Tesla's Q1 operating profit of $594M was slightly less than the sum of their $101M Bitcoin profit and the $518M regulatory credits they received[1]. [1] https://old.reddit.com/r/dataisbeautiful/comments/n0jxyt/teslas_first_quarter_visualized_oc/ https://old.reddit.com/r/dataisbeautiful/comments/n0jxyt/tes...
    • 8note 5y ago
      Its not particularly unlikely that Elon Musk gets imprisoned for running pump and dump schemes
• maerF0x0 5y ago
  I would suspect the reason is marginal electricity cost. Nvidia likely has to pay full marginal price on electricity whereas miners maybe geo located with cheaper electricity, or marginally free electricity (such as so called stranded energy or used in places where heat is already being created by electric heaters, but one could get marginally free computation done)
• Griffinsauce 5y ago
  It would destroy their business? They'd have short term massive gains but it wouldn't be sustainable.
• est31 5y ago
  Actually that's what some companies in the ASIC supply chain have done when the first bitcoin ASICs came out (2014ish I think?). That's probably because of the kinds of people in those companies, and the kinds of markets those companies operate in, i.e. solely in the bitcoin mining market. Nvidia and AMD mainly sell their GPUs for various other use cases other than mining, and the mining uses are quite recent. Nvidia is also known for building different products for different market segments, and they do have dedicated GPUs made for mining. I.e. in 2018 they forbode machine learning uses in datacenters of their consumer hardware in their EULAs, to push people to their professional hardware instead. https://www.datacenterdynamics.com/en/news/nvidia-updates-geforce-eula-to-prohibit-data-center-use/ https://www.datacenterdynamics.com/en/news/nvidia-updates-ge...
• gspr 5y ago
  For the same reason that many companies that happen by chance to have real estate as their most valuable asset don't wanna pivot to being real estate companies.
• themodelplumber 5y ago
  Can you imagine? They could do anything, they could create a corporate utopia. 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.
• patrickk 5y ago
  Because they’re in the business of manufacturing and selling GPUs, not speculating on volatile crypto markets which could nosedive 90%+ in short order and drastically cut the profitability of mining. 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.
• valuearb 5y ago
  Because BTC is down 30% in the last month?
  • 988747 5y ago
    No one mines BTC on GPU, and Etherum is up 100% from two weeks ago. 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.
    • disgruntledphd2 5y ago
      Gamers are the reason why Nvidia exists, it's a hard thing to let go of. It would be like FB shutting down the blue app and pivoting to Tinder.
      • Ericson2314 5y ago
        Hah, this comparison very much feels right.
    • Androider 5y ago
      They do, the mining specific cards are more expensive / hash rate. It's just market segmentation.
    • rurp 5y ago
      >Isn't capitalism all about selling to the highest bidder? 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.
• slver 5y ago
  > Why wouldn't nvidia and amd or any other card maker just keep the cards and mine all the cryptocurrency for themselves? 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.
  • gruez 5y ago
    >Bitcoin costs more to mine than the power bill you'll receive 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).
  • edave64 5y ago
    People are buying these cards for other coins that are still profitable to mine on the GPU.
• saurik 5y ago
  While having the cards is tablestakes, and newer cards can do more for less, in the end--even for Ethereum--you really still are spending more on electricity than hardware, and so you can have all the cards in the world and still not be able to mine crypto effectively. Most mining is thereby done in other places in the world where the externalities on power generation and use (clean or dirty, both) are less well tracked, with the occasional place in the US--such as the plants in NY that are being booted back up just to mine crypto--where people are actively trying to make it illegal. I would imagine a lot of the mining done in the US ends up being either to "launder" (not quite the right term) money (buying lots of power and converting it to untraceable crypto for illegal activity... kind of a reverse laundry ;P) or with "stolen" power (as is the case of a college student mining in their dorm room).
  • willhinsa 5y ago
    With today’s ETH prices, electricity costs are a fraction of the revenue from mining. Like, on the order of less than 10%.
    • saurik 5y ago
      That's brutal... isn't the hash difficulty supposed to automatically increase to compensate? Is it actually the case that the limiting factor on hash rate right now is how quickly Nvidia is willing to sell GPUs?!
      • willhinsa 5y ago
        Yes, your relative hash power does give you a smaller and smaller piece of the pie all things equal as more hardware mines the blockchain. However, the increase in the USD price of ETH and also the demand for transactions on the ETH blockchain have both gone way up (i.e. the cost for a transaction of a given size, a.k.a. "gas", measured in "gwei"), and the balance of those three factors means mining on the same card is currently much more profitable than it was in the past. Uniswaps and NFT's are large transactions and bid up the price of gas, and have been very popular as of late.
  • 5y ago
• chongli 5y ago
  Why mine gold when you could make a fortune selling shovels?
  • xwdv 5y ago
    Why sell shovels when you can just buy shares in the company selling shovels?
    • deleted 5y ago
      [deleted]
• OminousWeapons 5y ago
  Risk. When crypto inevitably crashes again they will be left holding the bag on a huge set of cards that may not have great resale value. Selling the cards is safer and also aligned with their core business competence.
• fay59 5y ago
  I absolutely despise cryptocurrency, so this may not be accurate, but my understanding is that they’re only reliable if many independent people mine. If NVIDIA kept all its GPUs and mined Bitcoin instead of selling them, it could control more than 50% of the hashing capacity. This could allow NVIDIA to double-spend bitcoins, the possibility of which would probably crash confidence in the asset.
  • amelius 5y ago
    They could start a bunch of subsidiary companies.
    • lottin 5y ago
      They would always be suspicious of collusion.
  • lukifer 5y ago
    > they’re only reliable if many independent people mine 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.
  • IncRnd 5y ago
    Are you saying that GPUs are now competitive with ASICs when mining bitcoin?
    • fay59 5y ago
• LASR 5y ago
  Same reason why they are not an investment bank investing in stocks, or building skyscrapers in Dubai. 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.
• FinanceAnon 5y ago
  "In a gold rush - sell shovels."
  • amelius 5y ago
    Yeah, but don't sell crippled shovels.
    • yoz-y 5y ago
      There are more than enough people out there that want to just play games or do research. Miners are only making nvidia look worse. Their core demographic is getting disenchanted because what good is a great cheap graphic card, if you can never buy one.
    • IncRnd 5y ago
      There are more purchasers than cards available, so they are intentionally limiting purchases by miners with this method in preference to gamers. They don't want to sell their shovels to miners right now.
    • TchoBeer 5y ago
      All the gold rushers buy all your shovels, and now gardeners can't get shovels to tend to their gardens.
• CPAhem 5y ago
  Nvidia want to charge more for cards that can mine crypto currencies. Just like they want to charge more for the same product if it is used in data centers. It's a way of artificially segmenting the market.
• smaddox 5y ago
  Because the value would tank when they tried to sell off all the Bitcoin, etc., that they mined.
• root_axis 5y ago
  Cryptocurrency value is extremely volatile, businesses need stable income streams to plan for development and growth. Further, just owning cryptocurrency isn't enough, it has to be converted into spendable money so that the business can pay employees and fund other business expenses, at Nvidia's scale this creates a lot of financial friction and undesirable complications.
• bumbada 5y ago
  Because cryptocurrencies are basically a pyramid scheme, the money for early investors is made by huge amounts of new people entering the pyramid. 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.
  • social_quotient 5y ago
    “Because cryptocurrencies are basically a pyramid scheme, the money for early investors is made by huge amounts of new people entering the pyramid.” 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.
• 0x5f3759df-i 5y ago
  The best way to get rich during a gold rush is to sell the shovels. They're right where they want to be.
• rocqua 5y ago
  Because in the long term, they probably can't rely on mining for income. And if they stop selling gpus for a while, they are going to destroy their customer base. Gamers will get angry, people who use CUDA will look for alternatives, enterprise supply chain managers will look for more reliable manufacturers (AMD). 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.
• diplodocusaur 5y ago
  How do you know they didn't?
• ec109685 5y ago
  What would be the advantage of that? With this segmentation between GPU families, they now can charge for GPU's at the rate where it's profitable to mine ETH (what the market will bear), and thus participate in almost all of the ETH upside, without the risk.