Anybody who lived through the great GPU cryptocurrency wars of 2017 through 2018, and into 2019, will understand the horror I felt crawling over my weary post Black Friday form as I noted Bitcoin had just hit a historic high and Etherium was once more creeping up towards its old summit. Certainly Nvidia's current or prospective investors have noted it too and are starting to question whether the current graphics card drought, and the green team's huge leap in gaming revenue posted last quarter, are the result of a mining resurgence.
At a recent virtual appearance at the Credit Suisse Annual Technology Conference (via Seeking Alpha), Nvidia's chief financial officer, Collette Kress, was asked "whether or not we should be concerned that some of the strength in the gaming business was Bitcoin crypto related?"
The person asking the question is John Pitzer, managing director of Credit Suisse and technology analyst. He's been "getting asked, with more frequency than I'd have thought," about cryptocurrency with relation to Nvidia and I expect with graphics card technology.
Nvidia's growth last quarter saw its gaming revenue leap by a staggering 37 percent year-on-year and the same level of growth quarter-on-quarter. It claims that's mostly down to the launch of its RTX 30-series GPUs, and the numbers don't lie. It sold cards, and a lot of them by the looks of things.
And yet the general feeling is that stunningly few people have been able to get cards, and the reality is that nobody who wants one right now can buy one. Which is a whole lot like the bad old days of the cryptocurrency boom—Nvidia and AMD were making a ton of money out of gaming cards, yet gamers couldn't buy them.
Instead large-scale GPU crypto mining outfits were rocking up at the back doors of graphics card manufacturers in China, handing over bundles of cash and loading pallets of cards into the back of trucks.
That hurt investors because eventually the bottom fell out of the crypto market leaving a bunch of stock no-one wanted, a whole load of needlessly expensive used cards, and Nvidia's share price collapsed.
So you can understand why people wanting to pump money into Nvidia, or who already have portfolios with the company, are starting to grow nervous. The GPU landscape looks a lot like the bad old days, and seemingly out of nowhere Bitcoin has rocketed to almost $20,000 per coin, and marked a historic high.
But Bitcoin hasn't really been anything to do with GPU crypto mining for years, not since the difficulty of solving the complex algorithms became so high that mere graphics cards couldn't cope and became an economically non-viable way of getting hold of the virtual currency. Etherium, however, was the big growth ticket. Similar to Bitcoin, in as much as it's another cryptocurrency, it was far better matched to mining on a GPU given its lower difficulty level.
But Etherium too has spiked in terms of its price, going from below $400 per coin to over $600 in just a month. Is this related to the newer, more powerful graphics cards released by Nvidia? Is the reason we haven't been able to buy an Nvidia RTX 3080 down to those nefarious bots buying them all up for cryptocurrency mining? Are we going to be beaten to the punch grabbing an RTX 3060 Ti by some outfit lining up hordes of GPUs in a thrumming warehouse in Iceland?
No, in fact it's kinda the opposite. Etherium has actually started to gain popularity again because it's moving away from the notion of mining coins. Etherium 2.0 is launching, which moves from a Proof of Work consensus (where you use computing power to solve cryptographic puzzles) to a Proof of Stake version. That's a more energy efficient method of keeping the whole Etherium network secure, and isn't going to eat up a whole bunch of our graphics cards.
So, in answer to John Pitzer's question about whether we should be concerned that Nvidia's gain is on the back of a rise in crypto-mining again, the answer is: Nah. Lots of people are just trying to buy next-gen tech right now 'cos we're all sat inside feeling sad and want to spend money on a new PC, laptop, next-gen console, or a new super-shiny graphics card.
Or, as Collette Kress put it: "We have heard some interest from the channel but nobody is aware of any real demand at this time for crypto."
And, moreover, no-one wants crypto mining back.