Quote:According to a new report, cryptocurrency miners aren’t just buying up desktop PC GPUs — they’ve started hoovering up gaming laptops as well. This has kept gaming laptop sales high through Q1 when normally the market would have cooled off by now.

This information comes courtesy of DigiTimes, via THG. The original DigiTimes article is now behind a paywall. According to them, cryptocurrency miners in China, Taiwan, and South Korea buy large stocks of laptops fitted out with RTX 3000 GPUs. Miners have (again, according to DT) even been lobbying manufacturers to create systems with low-budget components and powerful GPUs, since there’s no intent to use them for anything but cryptocurrency mining.

This is a new, infuriating wrinkle. For the third time in less than five years, cryptocurrency mining has pushed GPU prices beyond all sanity. The first cryptocurrency boom only hit AMD cards. The second affected both AMD and Nvidia and broke the retail channel for months. We’re already six months deep in the current shortage.

Every time we hit one of these shortages, the retail market warps badly enough to make even a boutique laptop or desktop a comparatively good deal. If cryptocurrency miners start buying laptops in bulk, it could drive prices up in this space as well.
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This year, seasonality isn’t going to be a thing. Nobody wants to predict what the market may do as vaccines roll out and areas come out from lockdowns. Some customers, like auto manufacturers, are desperate for chips now. TSMC and Samsung can shift some manufacturing capacity to accommodate that demand, but customers pushed to the side in February and March will have to be given capacity at some other time. In short, there’s no short-term solution to these problems.

Quote:Back in 2017 when cryptocurrency was all the hype, people were buying every graphics card they could get their hands on, which was quite the party for AMD and Nvidia. Now, it looks like Nvidia is getting sued by some upset investors who claim Nvidia mislead them by reporting crypto revenue as gaming revenue, according to a report at The Register.

The original lawsuit was started in 2017, but it is only this week that the actual complaint has been filed in California.

During the crypto-craze, coin miners would buy up every GPU they were able to obtain, which lead to massive shortages and severely increased the prices of graphics cards to levels at which gamers wouldn't be buying them anymore.

"Sales data demonstrated that, throughout 2017, 60% to 70% of NVIDIA's GeForce revenue in China came from sales to crypto-miners, not gamers." reads the complaint. Such figures are similar elsewhere around the world, though likely varied a little depending on the popularity of mining and electricity prices. It's also worth noting that the Chinese market accounted for the majority of Nvidia's sales.
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According to the report on The Register, Nvidia hasn't responded to the allegations. There are a number of ways this can pan out, but at the end of the day we don't expect much will come from the complaint.

Nvidia's revenues were divided up into five segments: Gaming, Professional Visualization, Datacenter, Auto, and OEM & IP. Given these categories, it's only logical that GPUs that were engineered and built for gaming would be reported as part of the Gaming division, even if a whole lot of people were using them for something else.

Everybody knew that the gaming GPUs were being used for mining, and therefore also that the inflated gaming division numbers weren't going to last. As an investor, you have a responsibility to yourself to research what you're investing in. You shouldn't buy a product simply because the manufacturer says it's the best, so why would that be any different when buying shares?

Quote:The Chinese National Development and Reform Commission (NDRC) said on Monday that it is seeking public opinions on a revised list of industries that it should encourage, restrict, or eliminate. The first version of NDRC's list appeared in 2011, and the revised list puts cryptocurrency mining on the chopping block for immediate removal.
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According to Reuters, Jehan Chu, managing partner at blockchain investment firm Kenetic, told state-owned newspaper Securities Times that the Chinese government isn’t really trying to eliminate cryptocurrencies in the country for good.

Quote:The Schall Law Firm, which specializes in securities class-action lawsuits and shareholder rights litigation, joined other firms in filing class action lawsuits against Nvidia. The pending litigation claims Nvidia made false and misleading statements to its shareholders regarding how it could manage reduced demand from the cryptocurrency market.
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Much of the lawsuit hinges on Nvidia's messaging around its ability to predict and react to changes in the cryptocurrency market, but that's a difficult proposition given the dynamics of modern cryptocurrency mining. Miners often use graphics cards for multiple purposes, such as gaming for enthusiasts and cloud applications for commercial users, so gauging a customers' intent when they purchase a graphics card is nearly impossible.

The lawsuit against Nvidia for its messaging is one of several [1,2,3], which only adds to the company's woes. Since October 1, Nvidia's stock has lost 53% of its value due to the crypto crash and the US trade war with China (the Chinese market accounts for ~20% of Nvidia's sales). Several of the company's customers, like Apple, Google, Amazon, and Facebook, also announced they are developing their own AI chips, seemingly threatening Nvidia's stranglehold on the lucrative data center GPU market. Intel's new graphics cards and AMD's 7nm data center Radeon Instinct GPUs also loom on the horizon, so the company is beset by challenges on all sides.

AMD has also suffered at the hands of the stock market due to its oversupply of graphics cards, but its diversified portfolio of both CPUs and GPUs has helped insulate the company from extreme losses. Meanwhile, Nvidia is solely reliant upon graphics technology.

Quote:The massively ill-conceived endeavor is known as Razer SoftMiner, a Windows application you can download from Razer’s site. When you’re not using your PC, the software swings into action and uses your GPU to crunch numbers on the blockchain. Razer doesn’t say precisely what currency SoftMiner generates, but it’s probably Bitcoin.

You get rewarded for running SoftMiner but not with the cryptocurrency your machine generates. No, you get Razer Silver, imaginary internet points that you can spend on Razer products. Meanwhile, you’ve been paying for the electricity it takes to generate cryptocurrency for Razer, which doesn’t seem like a terrific deal.

The amount of Razer Silver your machine earns will vary based on the power of your GPU and how much time SoftMiner gets to run. So, the Silver rewards are tied to how much crypto Razer earns from your machine. According to Razer, an ideal gaming rig could net you about 500 Silver per day. Alright, what does that get you? Nothing—this is somehow an even worse deal than it first appears.

If you want the middle-of-the-road BlackWidow Ultimate keyboard (it doesn’t even have RGB), that costs a whopping 154,000 Silver. It would take you 308 days of optimal mining to get that much Silver, and the points expire after 12 months anyway. It’s actually impossible to earn larger rewards like the Razer Huntsman keyboard (210,000 Silver) even with the best GPUs. Razer will at least give you a $5 discount code for its online store for just 1,500 Silver. It’s better than nothing, but that means each unit of silver is worth about a third of a cent. That really puts things in perspective.

Maybe SoftMiner would be worth using for people who don’t care about cryptocurrency if Razer actually offered good rewards, but it does not. You’re going to spend more on the electricity than the value of any Razer Silver you may earn. Now seems like a weird time for Razer to start mining crypto anyway. A better time would have been last year when the value wasn’t dropping like a rock. This is one of those rare ideas that’s bad from top to bottom.

Quote:At the dawn of cryptocurrency, mining seemed like a novel and useful way to distribute digital money. You could churn away with a laptop CPU and earn Bitcoin while supporting the blockchain that verified transactions. Today, Bitcoin requires a lot more power to crunch the numbers, and the proliferation of other cryptocurrencies means even more energy spent on mining digital coins. How much energy? An analysis published in the journal Nature Sustainability says you’d generate more wealth expending that energy on real mining. Like, the digging in the ground kind of mining.
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There is some variation among currencies, though. To mine the equivalent of $1, the study found Bitcoin requires 17 megajoules of power, and Monero isn’t far behind with 14 megajoules. Both Etherium and Litecoin are a bit more economical at about 7 megajoules. If you want to mine $1 of gold, that’s just 5 megajoules. Copper? 4 megajoules. Rare earth metals only consume 9 megajoules per $1. The exception is aluminum, which requires 122 megajoules per $1 of value.
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Cryptocurrency is already a questionable use of energy based on the realities of mining, but the analysis from Krause and Tolaymat doesn’t even take into account all the things that go along with mining. For example, large mining operations need industrial cooling systems to keep all the machines running. Some crypto enthusiasts count on mining to become more efficient over time, but efficient hardware is also more expensive. With the value of crypto so unpredictable, operations might be wary of spending more without a guaranteed return.

Quote:The Wall Street Journal has come forward with a story confirming what we all knew, but could have been left out of the cryptocurrency narrative for various reasons: that bots are used on a daily basis to manipulate pricing of these digital assets. The practice includes various tricks, such as spoofing (creating a hue order in the ledger and then canceling), pump-and-dump schemes (where players can resort to a variety of manipulation techniques to pump um a given product's pricing in order to then dump all their positions at the ballooned price) and ping-pong transactions (where a holder of multiple wallets makes extensive trades between his assets, never moving crypto in or out of his control, but placing extra orders and volume on the markets.

Of course, most of these practices have been outlawed in real-world investment scenarios, as price manipulation doesn't really bode well for a free market. However, some players in the crypto sphere (trader Kjetil Eilersten, who developed the market-manipulation program Quatloo Trader) go as far as defending pricing manipulation tools' implementation, saying that a market where "everybody manipulates" results in a zero-sum loss for anyone. Now isn't that refreshing.

Quote:Cryptocurrency prices continue their downward slide making them no longer viable to mine on GPUs. The value of Ethereum has dropped to USD 256, down from its historic high of $1,250 this January. Bitcoin fell to below $6,000 Wednesday, way down from its late-2017 high of $19,000. A 79 percent devaluation isn't the worst of Ethereum's problems. The currency is facing stiff inflation from conversions to other cryptocurrencies or the Dollar. At its peak, ETH held 32 percent of all cryptocurrency market cap, beaten only by BTC at 39 percent. Now ETH only makes 14 percent.

Quote:Terpin co-founded the first angel group for Bitcoin investors, called BitAngels, in 2013. A year later, he co-founded the first digital currency funding group, BitAngels/Dapps Fund.

In January, Terpin was robbed of millions of cryptocurrency tokens, worth $23.8 million at the time. According to Terpin’s lawsuit filing, the attack happened through what is called a “SIM swap fraud.” Criminals use this relatively common tactic to transfer a victim’s phone number to their own phone by contacting the wireless carrier and pretending to be the victim.

The complaint says:

"What AT&T did was like a hotel giving a thief with a fake ID a room key and a key to the room safe to steal jewelry in the safe from the rightful owner.”

Criminals employ this tactic because many internet services and their users continue to use SMS-based two-factor authentication (2FA) to protect their accounts, despite this method of authentication being declared no longer secure by the National Institute of Standards and Technology more than two years ago.

Terpin now wants AT&T, which he considers the sole responsible party for the attack, to give him the $24 million back, as well as pay him an additional $200 million as punitive damages. AT&T said that it disputes the allegations.

Quote:Facebook announced earlier this year that it was banning all cryptocurrency ads, but the company seems to have changed its mind, at least partially. It will now allow “pre-approved” cryptocurrency ads, but will still block ads for Initial Coin Offerings (ICOs) and binary options (a financial option in which you can either win or lose all of your money).

Quote:Apple says that wallet apps for storing your Bitcoins and other virtual money are fine. However, the developer offering these apps must be enrolled in the Apple developer program as an organization rather than an individual. You can also access online crypto exchanges in apps. Initial coin offerings (ICOs) are somewhat more locked down. Apps offering to facilitate ICOs can only do so with the backing of established banks, securities firms, or other financial institutions.

Generating crypto on your Apple device is effectively forbidden under the new rules. Developers cannot reward users with cryptocurrency for completing tasks in apps, and more significantly, you can’t use an app to mine coins on your machine. In the case of phones, this probably makes sense. You’re never going to make very much money mining cryptocurrency on your phone’s low-power hardware. So, the only reason a developer would include such functionality is to try and trick users into mining coins for them. Mining also puts stress on the phone hardware that can greatly shorten its already short lifespan. Apple is already taking heat for battery degradation in its phones without crypto mining.

Apple locks down mobile devices, so the only way to get unapproved apps on them is to find an exploit and “jailbreak” the phone. That’s increasingly difficult and risky, though. On the macOS side, you can get apps from outside the Mac App Store. Apple won’t distribute any crypto mining apps, but you can still download one separately if you so choose. The same goes for the other categories of forbidden apps.

Quote:Google has banned all cryptocurrency mining extensions from Google Chrome. In a blog post, the developers explained that crypto-mining extensions that made their purpose adequately clear to prospective downloaders had been allowed until now. Any extension created for crypto-mining was also barred from having any other function. These two restrictions were meant to prevent the creation of stealth mining extensions. Some websites implement a simple form of cryptojacking by trying to trick visitors into installing such extensions.

Google has found that over 90% of crypto-mining extensions have failed to follow these policies, however, so it’s banning all crypto-mining extensions from Chrome. Mining extensions already on the Chrome Web Store will be removed in June.