> Nvidia introduced LHR in February 2021 with the launch of its GeForce RTX 3060 models. Three months later, the company brought LHR to its GeForce RTX 3080, 3070, and 3060 Ti graphics cards. The reason: to make the cards less desirable to people mining Ethereum and possibly other types of cryptocurrencies.
It was an attempt to decrease demand for the cards, thereby reducing price.
The simplest market solution to high demand and inadequate supply would be to raise the price of the cards. This would maximize short-term profits but Nvidia felt it was not the right strategic move. Why not? Here are some guesses:
- pricing gamers out of the GPU market would damage Nvidia's historical market - video games
- pricing AI users out of the GPU market would damage an exciting new market Nvidia is working very hard to cultivate
- tying a large fraction of your business to cryptocurrency is risky given the volatility of that market
I think Nvidia sees gaming and AI as viable long-term markets and feels very invested in maintaining the health of those markets and Nvidia's participation in them. They are much less interested in cryptocurrency mining customers because they don't see a long-term future for themselves there. Nvidia is willing to take a short-term hit to profits to get more of their products into the hands of gamers and AI researchers.
However Nvidia has not completely forsaken short-term profitability. They have substantially raised the price of GPUs and they are making considerable amounts of money selling GPUs to miners. They are trying to take a middle path and balance competing interests.
That argument falls apart when you realize that LHR didn't cripple nVidia's cards, it merely reduced their mining performance to being just a bit stronger (but still stronger) than AMD. Had they really wanted to kill miner interest in their cards they would have reduced hashing performance by something like 90% with LHR. I think all they were ever really trying to do was decrease the relative desirability of nVidia cards specifically by miners, not eliminate it entirely.
Gamers by new GPUs every cycle to every third cycle. Keep them covered and having hardware and the developers will continue supporting your hardware too. Decent market, with growth potential from countries getting richer.
AI, get your tech in, get them them invested on software level and as it scales demand will go up and stay up. Just see how long Intel has been around. Similar position and inertia is sure way to make money.
Crypto on other hand purely chaces profits. And you can't really rise the prices for partners, that is board manufacturers too much. So even if end user prices are high, not all or even big chunk transfer to Nvidia...
Nvidia as a hardware manufacturer has long lead times and low flexibility. As a result they prefer predictable and dependable sales, not random boom and bust cycles. The gaming market is dependable, mining isn't.
They don't mind selling some GPUs to miners, of course. But mining is disrupting the supply of GPUs to the gaming market which could hurt future growth of the gaming market in general as well as Nvidia's share of it. And Nvidia is a company that has no qualms about artificially segmenting markets to apply price discrimination or otherwise manipulating customers as much as they can get away with. So they are trying to separate the markets for gaming and mining by any means they can think of.
It crashed back in 2018 and dumped a lot of cheap GPUs on the aftermarket. Nvidia plans production runs years in advance and can't handle the randomness of sudden crypto crashes
huge variations in the price of crypto lead to enormous mining boom/bust cycles that are impossible to plan for.
Semiconductor fab planning operates at least a year in advance, and even then there are limits, TSMC has other customers and NVIDIA can't order 100% of TSMC's supply even if they wanted to.
But in a day, crypto prices can 10x, or 0.1x, and this occurs relatively frequently (potentially tied to large capital injections from a questionable "stablecoin" called Tether). When that happens, mining suddenly becomes 10x as profitable, and miners hoover up every card on the market for the next 6 months, so the market goes through a prolonged shortage and periods of very high prices (as market economics dictate). Then when it crashes, miners dump all the cards back on to the market, and then NVIDIA has to drop prices to compete with a flood of used cards. It's all basically impossible to plan around given the realities of silicon production.
I’m sorry you are being outbid by another guy who wants to mine with a graphics card, but who are you to say that guy securing a censorship resistant and decentralized monetary system is less legit than your leisure time amateur rocket league tournament?
If the owner uses it to train a ML model? Is that legit then? Or can general purpose GPUs only be single purpose for games. For gamers?
I think my position is well known. I am not the first person to argue that cryptocurrencies are negative because they generate waste by design and are a technical solution to social/meatspace problems. I personally don't really need a GPU right now (lucky for me I can probably hold off a couple more years), but I am pretty concerned about the future of the planet in general and have some increased existential dread and angst arising from the fact that we are finding new and exciting ways to accelerate global warming.
We can just dispense with the part of the discussion where we argue about why we think it is or isn't legitimate and just agree that we have mutually incompatible world views.
Our views are mutually incompatible, but only one of us is correct. :-) time, the universal currency, will be the final arbiter.
I do hope it works out for humanity tho, maybe we are alone in the universe and we are squandering the most unique and precious outcome of random chance, life.
Also, censorship resistant? Tell that to people having their accounts on the "decentralised" money system being banned for using crypto that's gone through a mixer.
The public blockchain makes censoring a given user even easier, because your transaction log is public knowledge.
I always loved this one. Magic The Gathering Online: Exchange.
No, that's not a joke, the owner took a pre-existing website for trading Magic cards and turned it into a crypto exchange. And no, that's not a typo, it's not "Magic The Gathering: Online Exchange", they weren't even trading the real cards, they were virtual cards for the game Magic The Gathering: Online.
It never actually sold cards. That was the original plan, but Satoshi’s invention changed the scope a little.
They also got robbed before they opened to the public, were insolvent for all their life, found a sucker to take the blame (who did serve time), then founded another shitcoin, fell out with the others, founded another shitcoin.
Or what about that guy finalizing their crypto rug pull? There are just too many bad actors in the crypto community. Most of it seems to be scams and over hyped coins that are completely useless.
Don’t disagree with you. But none of that has anything to do with folks doing PoW to secure a ledger. Infrastructure providers can’t really be blamed for the bandits. Nobody likes thieves, and Bitcoin specifically limits the power of the biggest ones.
Nvidia's 30 series GPU launch has been a mess. It has been over a year now and gamers still can't get their hands on the cards. Since they can't seem to make nearly enough of them, they have tried to stabilize demand by cutting miners out of the market.
Gamers were skipping new cards in favor of cheap used mining cards. This move ensures that those mining cards (which conversely cannot be used for gaming) go to landfill, and don't eat into NVIDIA profits.
There's also their claim that it's good for gamers. It's certainly not.
nVidias moat is not just their hardware, but also software - e.g. CUDA (you need a nVidia card), RTX and DLSS (these are big flagship features of 3xxx series and need special software support).
If people using the nVidia software libraries - ML edu organization, gamers and game developrs - can't get their hands on their software, they won't use nVidias proprietary libraries and ignore their market differentiation features. This makes nVidia's moat against competition worse in the longer term while serving finnicky cryptobros in the short term.
What a bizarre move. Why would they do this?