Nvidia Abandons Cryptocurrency Market Venture

Nvidia’s CEO, speaking at a recent conference in Tel Aviv, said that the company had no prior intention of venturing into the cryptocurrency market. Calcalistech reports that after the decline of cryptocurrency prices, the American chip manufacturing giant has suffered setbacks in the last quarter of 2018.

Nvidia Licks Wounds after Cryptocurrency Price Decline

Jensen Huang, CEO of Nvidia Corporation, recently disclosed that the company never had plans to venture into the virtual currency sector. According to a report by Calcalistech, Huang’s statement revealed that the company was not ready for the industry.

The CEO, however, tried to sound optimistic for the virtual currency sector, saying:

“I believe that cryptocurrency has a place. I hope that it will find different algorithms that are a little bit less computationally intensive, and maybe they won’t need our GPUs in the future, but I do believe cryptocurrency has a place.”

The chip manufacturing giant experienced a boom in sales when the demand for chips was high. With the cryptocurrency price boom in 2017, Nvidia made GPU chips for digital currency miners. The demand for chips skyrocketed, and the company went into overdrive, upscaling its production, thereby over-shipping.

The Albatross of Unsold Inventory

However, the good times wouldn’t last for long as the crypto bubble burst, the price of virtual currency plummeted, and the demand for GPU chips sank. Several miners cut their losses but went out of business in no time. The decline affected the company adversely, in that there was a large number of unsold inventories which the company is still currently struggling to sell.

With the virtual currency price descent, Nvidia’s stock took a blow, descending to $127 per share. Towards the end of the fourth quarter, the chip manufacturer had to cut revenue forecasts.

Huang, however, stated that the company’s unsold inventory would be disposed of in April 2019. The CEO also expressed optimism in delivery, saying recovery is underway and it would soon be business as usual.

Chipmakers Pivot away from Cryptocurrency Mining

Nvidia isn’t the only chipmaker to bow out of the cryptocurrency mining scene given the year-long bear market experienced in 2018. Like Nvidia, other companies like Taiwan-based Gigabyte Technology Ltd. began to upscale their cryptocurrency mining chip manufacturing in the hopes of making huge profits from the virtual currency boom.

As reported by BTCManager, Japanese IT behemoth GMO quit selling cryptocurrency mining hardware back in December 2018. Firms like Canaan Creative and Bitmain even went a step further, with plans to launch massive initial public offerings (IPOs).

Half a year later, both plans have fizzled away with regulators not convinced of their respective business models.

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Published at Thu, 28 Mar 2019 10:00:31 +0000

April 8, 2017

Does Regulation Slow Down or Accelerate Adoption?

Recently, many countries and cities have published new laws and legislations to regulate bitcoin. Does this help contribute to mainstream adoption, or is it merely a hindrance to it?

Regulation Slowing Adoption

New York was the first state in the USA to tighten regulation on bitcoin and other virtual currencies, via its BitLicense. This is issued by the New York State Department of Financial Services, and it regulates businesses which work with virtual currency.

The implementation of this law caused some bitcoin companies to cease operations in the state, while some others decided to go through the regulatory process to operate legally. However, to date, only 3 BitLicenses have been granted. Circle, Ripple and Coinbase are the only companies with the right to operate, and they must collect information on New York residents and report it back to the NYSDFS.

Other companies, like BitFinex and Kraken, decided to cease operations in the area and ban New York residents from using their services. They deemed the BitLicense to be too complicated to work with, and simply moving out of the area was the simplest option.

In other countries like China, regulation has been a bit harsher. Major exchanges were forced to introduce fees, freeze withdrawals and disable margin trading to comply with new regulation from the People’s Bank of China. Zhou Xuedong, director of the PBoC’s Business Administration unit, stated:

“There is a significant risk, one is the risk of customer funds security, the second is the risk of money laundering, the third is the risk of leveraged transactions.”

Ways Around Regulation

However, the bitcoin community has developed solutions to avoid regulation. Decentralized, peer-to-peer marketplaces exist, where users can spend and obtain bitcoins without adhering to any official regulation since the platform isn’t run by a third party.

BitSquare is a decentralized bitcoin exchange, where users can buy and sell bitcoins without proving their identity. OpenBazaar employs a similar concept and allows users to set up stores to sell their products.

There are also other platforms that aim to promote decentralisation. For example, Blockonomics.co provides a free, detailed bitcoin invoice services for freelancers and businesses, as an alternative to Coinbase or BitPay. This means that again, users can enjoy the same services without having to go through long verification processes.

Regulation Fueling Adoption

Contrary to popular belief, regulation doesn’t necessarily have to slow down adoption. In some cases, regulation could help bring cryptocurrency technology to the masses; an excellent example of this is Humaniq.

Humaniq is a new platform which aims to bring mobile banking services to those who reside in emerging economies. The platform is powered by blockchain technology, but they aim to be compliant with KYC/AML laws in the countries they will operate in.

However, users no longer have to go through a complicated verification process. Instead, the users’ identity can be verified by simply having them take a photo of themselves or by reading a short piece of text.

This could mean a significant step forward for blockchain technology. Users would be able to access all of its advantages without too much trouble, which is very important for those who live in emerging economies.

Nonetheless, any person can use Humaniq; their ICO (Initial Coin Offering) begins today, April 6th, which is a great chance to contribute to the project if you haven’t yet already done so.

[Disclaimer: This is a sponsored article. Publication does not constitute an endorsement and should not be considered as investment advice. Bitcoinist is not responsible for any outcome that may result from investing in this ICO.]

Do you think that cryptocurrency businesses should be regulated? If so, why? Let us know your thoughts below!

Images courtesy of Blockonomics.co, BitSquare, Humaniq, NewsBTC, CoinFox and The Houston Free Thinkers.

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