Chipmakers Nvidia, AMD Ride Cryptocurrency Wave -- For Now (bloomberg.com)

During California's Gold Rush, it was often the sellers of pickaxes and shovels who made the most money. In the frenzy to get rich quick from cryptocurrencies, some investors are calling computer chipmakers the modern-day equivalent. From a report: Shares of Nvidia and Advanced Micro Devices have gained at least 14 percent since the beginning of June, spurred in part by about a 10-fold boom from April to June in a market, known as ethereum, for a currency that can be used to buy computing power over the internet. What's the link between ethereum and these Silicon Valley chipmakers? It lies in the really powerful graphics processors, designed to make computer games more realistic, that are also needed to gain access to encrypted digital currencies. Nvidia and AMD have rallied in the last month and a half even as investors have ignored chip stocks leaving the benchmark Philadelphia Stock Exchange Semiconductor Index up about 1 percent. Nvidia has gained 14 percent and AMD rallied 27 percent. While some of that has come from optimism around new products for other markets, analysts are projecting that sales related to cryptocurrencies will result in a spike in revenue for both companies. Even so, investors shouldn't bank on a lasting impact from the cryptocurrency boom, said Stacy Rasgon, an analyst at Sanford C. Bernstein & Co. "This has happened before," Rasgon said. "It lasted about a quarter." [...] Like bitcoin, ethereum is an attempt by an online community to create an economy that doesn't rely on government-backed currencies. Unlike bitcoin, it's focused solely on offering decentralized computing and storage services. Those seeking to use these services -- and speculators looking for a quick profit by creating and then selling ether -- have seized on graphics cards, which excel at performing multiple simple calculations in parallel, as a faster way to claim the blocks of code that act as the currency of the ethereum market. Demand from ethereum miners has created temporary shortages of some of the graphics cards, according to analysts, who cite sold-out products at online retailers. Estimates of additional sales from this demand run as high as $875 million, according to RBC Capital Markets analyst Mitch Steves. That would roughly equal AMD's total sales from graphics chips last year, or half of Nvidia's quarterly sales of those components. But Steves and other analysts are also quick to warn that the market opportunity could fizzle out.

Comments

Power companies love this shit too

[Anonymous Coward]

What's not to love about people intentionally burning as much electricity as they can to get nothing useful done?

Re:Power companies love this shit too

[slew]

If you can come up with a better distributed protocol for a distributed ledger where none of the parties trust one another, let's hear it. The current state of the art for that kind of thing consumes a lot of power, but not more than other less trustworthy systems.

FWIW, Proof of stake (vs proof of work) is the leading candidate for such a protocol. However, the wart on Proof of stake systems is they need complicated protocols to establish consensus in the face of adversaries that want to fork the chain (since there is nothing like work/energy limiting an adversary working on multiple forks).

Re:Power companies love this shit too

[Khyber]

"If you can come up with a better distributed protocol for a distributed ledger where none of the parties trust one another, let's hear it."

Pen and paper ledger, multiple witnesses (with recording) and very public announcements.

Worked fine when we learned the problems of permission-less distributed databases in the 70s.

Here we are, almost 60 years later, and obviously database geeks still have not learned the lesson.

When nobody can trust anybody, then the only answer is multiple witnesses with a record thereof.

Like what's put in nearly any company by-law regarding meetings and minutes recording.

Ethereum bubble may be bursting.

[Athanasius]

It seemed strange to read this /. story given I'd read the following earlier in the day: https://www.overclock3d.net/ne...

Re:Ethereum bubble may be bursting.

[Athanasius]

As pointed out, in a somewhat tongue in cheek manner, in the source of the the URL, it's possible these GPUs have had non-standard firmware flashed, been OC'd like crazy and otherwise treated in a manner meaning you'd want them to be priced well under MSRP to risk buying one for any purpose. As it is, there may be more of them on the second-hand market now, but they're still being offered at above MSRP.

Re:Ethereum bubble may be bursting.

[Khyber]

" it's possible these GPUs have had non-standard firmware flashed"

Very few of us actually have that capability to modify and successfully flash modified firmware over. Most people just undervolt and underclock (and one guy went so far as to remove some of the physical RAM from the board because it was bad instead of going for RMA since the function isn't memory-bound more than it is bandwidth-bound.)

unsustainable

[Khashishi]

AFAIK, all cryptocurrencies are not scalable. You have to verify all transactions against an ever-growing blockchain which contains all transactions. Race type collisions will become more and more frequent with more people in the system. Eventually, it will come to a grinding halt, or people will move on to other things. Maybe there's a solution, but it doesn't exist yet. The founders certainly know that it can't last, so it's basically a Ponzi scheme.