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Nvidia Wins Lawsuit Over $1 Billion in Cryptocurrency Mining-Related Sales

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On Tuesday, U.S. District Court Judge Haywood Gilliam dismissed a lawsuit alleging that Nvidia misled investors over $1 billion in sales to cryptocurrency miners.

The lawsuit claimed that roughly 60-70% of Nvidia’s sales in China, its largest market, were to miners in 2017 and 2018. That alone might not have been an issue, but the company was accused of keeping the extent of the mining industry’s influence on its success a secret from investors by attributing those sales to its Gaming division.

Nvidia didn’t share information specifically related to cryptocurrency mining until the first quarter of 2018, and that was to warn investors that it expected those sales to decline by 66% the following quarter, largely because of the crypto market bust. The disclosure caused a 7.85% drop in the company’s share price despite record profits.

It’s not hard to see why some Nvidia shareholders were upset about the news. But it wasn’t exactly a secret that GeForce-branded graphics cards were popular with miners, either, despite the fact that they were originally developed for PC gaming. That appears to be why Gilliam sided with Nvidia by dismissing the lawsuit.

Gilliam essentially said in the filing that the plaintiffs failed to provide adequate evidence that Nvidia misled investors throughout 2017 and 2018. The company acknowledged that some of the sales of GeForce products were to miners, even if it didn’t provide exact figures, and that appears to have satisfied Gilliam.

Mining remains a lucrative business for Nvidia —the company estimated that between $100 and $300 million of its Q4 2020 revenues were from sales to miners. That variance shows two things. The first is that Nvidia still can’t determine exactly how much of its sales can be attributed to people mining cryptocurrency.

The second is that mining remains a relatively small aspect of Nvidia’s business. The company reported $5 billion in revenues, $2.5 billion of which came from the Gaming division, last quarter. Even if the $300 million attributed to miners is a conservative estimate, the vast majority of Nvidia’s revenues came from elsewhere.

That probably won’t be particularly comforting to enthusiasts competing with cryptocurrency miners over the short supply of available graphics cards (and gaming notebooks) for their builds. It should help Nvidia shareholders understand the mining industry’s effect on the company, though, so it’s still a win of sorts.  

  • itzmec
    I wonder if there has ever been a lawsuit for being mislead after an unexpected rise in share prices?
    Reply
  • jkflipflop98
    I can't wait until this crypto fad dies and we can get back to gaming.

    It's simply Tulip Mania. Crypto has no intrinsic worth other than the electricity you burned up doing math. Most forms of actual, real currency are backed by some other commodity. Gold, Silver, Oil, etc. Some are backed by other currencies such as when a foreign country uses the US Dollar as the basis of it's own currency. Crypto is inherently worthless. The only value it has is what you can convince the next sucker to buy it for with actual, real money.
    Reply
  • CerianK
    Crypto mining, in its current state, is one of the biggest misapplications of technology I can think of.
    I think it can be beat at its own game by building houses out of the discarded GPUs once they have out-lived their purpose.
    People would look at the houses and say "That is beyond stupid!"... then the point will suddenly sink in, and they will want to buy those houses.

    Deep Thoughts, (not) by Jack Handey
    Reply
  • hasten
    jkflipflop98 said:
    I can't wait until this crypto fad dies and we can get back to gaming.

    It's simply Tulip Mania. Crypto has no intrinsic worth other than the electricity you burned up doing math. Most forms of actual, real currency are backed by some other commodity. Gold, Silver, Oil, etc. Some are backed by other currencies such as when a foreign country uses the US Dollar as the basis of it's own currency. Crypto is inherently worthless. The only value it has is what you can convince the next sucker to buy it for with actual, real money.
    I'm not in crypto, but you kinda make the counterargument in your post. What drives the value of gold, silver, and oil? Rarity and right now crypto is the rarest of resources. That is where the value comes in and it will likely become more valuable as it becomes more mainstream. Plus it has safeguards to keep it rare... I felt the same way as you for many years, have 2 decades in banking and didn't think a non fiat without some sort of backing (military, natural resource, etc.) Could survive. Well hindsight sure as hell should have fired up my extra hardware back in the day and mined away.
    Reply
  • coolviper777
    hasten said:
    I'm not in crypto, but you kinda make the counterargument in your post. What drives the value of gold, silver, and oil? Rarity and right now crypto is the rarest of resources. That is where the value comes in and it will likely become more valuable as it becomes more mainstream. Plus it has safeguards to keep it rare... I felt the same way as you for many years, have 2 decades in banking and didn't think a non fiat without some sort of backing (military, natural resource, etc.) Could survive. Well hindsight sure as hell should have fired up my extra hardware back in the day and mined away.

    Crypto may have it's place an electronic store of value and/or a medium of exchange. But the reality is, you lose electrical power, and crypto is worthless. You lose your crypto drives or usb sticks, or the clearinghouse loses your crypto, you're screwed.

    Gold/silver won't become useless due to power outages, or be erased or stolen remotely.
    Reply
  • CerianK
    jkflipflop98 said:
    I can't wait until this crypto fad dies and we can get back to gaming.
    Once 'Proof of Stake' mining becomes popular, mining may just actually take off.
    Reply
  • Itsajungle
    jkflipflop98 said:
    I can't wait until this crypto fad dies and we can get back to gaming.

    It's simply Tulip Mania. Crypto has no intrinsic worth other than the electricity you burned up doing math. Most forms of actual, real currency are backed by some other commodity. Gold, Silver, Oil, etc. Some are backed by other currencies such as when a foreign country uses the US Dollar as the basis of it's own currency. Crypto is inherently worthless. The only value it has is what you can convince the next sucker to buy it for with actual, real money.

    I think you really have no clue what is going on in crypto/block chain world. When I started looking into what is going on I really got amazed!
    Reply
  • JfromNucleon
    jkflipflop98 said:
    I can't wait until this crypto fad dies and we can get back to gaming.

    It's simply Tulip Mania. Crypto has no intrinsic worth other than the electricity you burned up doing math. Most forms of actual, real currency are backed by some other commodity. Gold, Silver, Oil, etc. Some are backed by other currencies such as when a foreign country uses the US Dollar as the basis of it's own currency. Crypto is inherently worthless. The only value it has is what you can convince the next sucker to buy it for with actual, real money.
    There is so much wrong with your argument, first of all no currency is backed by anything, the last currency that was backed up by anything other than another currency was the USD but they got off the gold standard after France under Charles De Gaul started using that to ship good to France. Second the reason why currencies are not backed by physical things is due to John Law's statement that the availability of credit would be a bottleneck in the economies of countries and the bottleneck in the availability of credit was the availability of gold and silver then. Finally, I believe that crypto will be the currency of the future, even the mighty USD is valued basically at what the market values them at. And we're seeing history being repeated again, paper currencies were also once viewed with suspicion, now look at where they are. I'm gonna finish this argument by quoting John Law," Money is the medium by which goods are exchanged, not for which goods are exchanged." Thus, it doesn't matter what you use (not much, anyway), money isn't a fixed thing and it will continually change its form.
    Also, the amount of crypto that can be mined is limited to prevent hyper inflation, which can plague any currency
    Reply
  • JfromNucleon
    coolviper777 said:
    Crypto may have it's place an electronic store of value and/or a medium of exchange. But the reality is, you lose electrical power, and crypto is worthless. You lose your crypto drives or usb sticks, or the clearinghouse loses your crypto, you're screwed.

    Gold/silver won't become useless due to power outages, or be erased or stolen remotely.
    But they can become useless due to flooding of the market with them, such as happened when Spain began to import silver from the Americas, silver basically lost all of its value in a night. That said, it seems it'll happen again soon when space mining takes off. Also there's the environmental impact of gold and silver, which crypto won't have provided they are mined using renewables.
    Reply
  • JfromNucleon
    CerianK said:
    Crypto mining, in its current state, is one of the biggest misapplications of technology I can think of.
    I think it can be beat at its own game by building houses out of the discarded GPUs once they have out-lived their purpose.
    People would look at the houses and say "That is beyond stupid!"... then the point will suddenly sink in, and they will want to buy those houses.

    Deep Thoughts, (not) by Jack Handey
    Frank ly what you've said can be applied to gaming as well. If you're serious about this, donate your GPUs to scientific research and development
    Reply