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Analysts today are talking about NVIDIA's new third-quarter earnings report. Overall, there is a big recovery of 21% for a total of $ 3.18 billion in revenue for the third quarter.
However, within that number, the category for mining data processing units (GPUs) has plummeted, leading to an increase in inventory according to NVIDIA founder and CEO Jensen Huang.
"The hangovers of a cryptic hangover lasted longer than we expected," said Huang, according to Reuters. "We thought we had done a better job managing the dynamics of cryptocurrency".
Huang told reporters that a previously active cryptocurrency market had increased the demand for playing cards also used to extract cryptocurrencies; however, from the beginning of 2018, a drop in demand has cooled the market.
GPUs have an interesting story: originally introduced as a way to make computer graphics processing ably sophisticated, GPUs have now replaced single-core chips to bring the power of parallel processing to many different tasks. They are widely used in AI / ML, and also in mining encryption, which uses prodigious amounts of computing power.
NVIDIA leaders waiting for GPU demand to resume last summer were disappointed and, as a result, the company's inventory line of business increased to $ 70 million for the third quarter. This coincided with a decrease in gross margins.
Many analysts link the decline of the NVIDIA GPU to a lower profit for cryptocurrency minors. An article in BTCManager that covers this lower demand for GPUs talks about how mining profit margins have strengthened.
A Forbes article on mining profits shows how this happens – as Clem Chambers points out, block premiums and other factors are quite volatile, just like market prices.
"The difficulty can explode if it is suddenly hit by a lot of mining power," Chambers writes. "The coins that can be won by a given mining power will therefore drop, but probably not, the increase in mining power could result from a demand for the currency and therefore an increase in prices could compensate the miner in terms of dollars … with so many variables at stake, the real "mining reward" is how much money you'll be mining and I'll call it not in BTC or altcoin mined but in dollars … This income will fluctuate dynamically based on all types of other permutations, which is equivalent to a result, has been examined in a stochastic way or at least as a sort of optimization ".
Also, he adds, not all miners are playing by the rules – but there is an integrated "integrity" to be recognized.
"While there is undoubtedly a lot of flamm-flam in the cryptocurrency space, especially in non-threatening coins and tokens, the extraction is real, it costs money, requires effort and skill and can not be falsified," writes Chambers . "As such, it is a solid sign of what is happening under the bonnet of the market".
One way to track mining environments is to look at the hardware, as those who scour the NVIDIA report are doing. Other factors, however, imply the popularity of the crypto in general, where markets often look a bit like high school: if all do, prices increase. Keep an eye on the news from the mining industry to understand where the coins are pointing.
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