Nvidia was founded in 1993 by Jensun Huang, Chris Malachowsky and Curtis Priem. Out of the two dozen graphics chip companies during that time, Nvidia was the only independent one still operating by 2006. They started building products for gaming and videos and became known to be one of the world’s largest producer of Graphics Processing Unit (GPU). The company has boasted a considerable demand for their products within the cryptocurrency mining community. It has funded cryptocurrency mining products that are available on personal as well as industrial scales.
Nvidia announced today that it is pulling the plug on their cryptocurrency-related undertakings. The company claims that as the price of cryptocurrencies continues to take a downturn, the profitability of its cryptocurrency-focused mining chips mirrors the same trend.
In a statement, CFO Colette Kress said, “We believe we’ve reached a normal period as we’re looking forward to essentially no cryptocurrency as we move forward. Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million, and we now expect a negligible contribution going forward.”
Nvidia’s CEO Jensen Huang concurred this decision and explained that at the beginning of 2018, they predicted that their crypto ventures would be a more substantial contribution for the rest of the year; however at this point, they regard it as irrelevant for the second half.
It is compelling to compare that Bitmain, one of the largest conglomerate in the cryptocurrency division, earned $1.1 billion in the first quarter of 2018, roughly 65 times the recorded profit of Nvidia’s cryptocurrency operation, as reported by CNN in July 2018. Mining equipment manufacturers like Bitmain, Canaan and Samsung are noted to be in full swing.
It can also be speculated that Nvidia’s disinterest to continue with their cryptocurrency arm is due to the declined demand for GPU (Graphics Processing Unit) when ASIC (Application Specific Integrated System) mining chips or mining equipment have been developed aggressively by the key players in cryptocurrency mining community. Due to the insufficient computing power in the chips used to create graphics cards by a GPU miner, there are only a few tokens and cryptocurrencies produced. It was a challenge for miners to depend on graphics cards and chips that are not primarily designed to mine crypto and create digital assets. ASIC, on the other hand, is designed specifically to mine cryptocurrencies.