Cryptocurrencies add nothing useful to society, says chip-maker Nvidia

They did that very late when the backlash from gamers was at its peak, and they released this thing at the same time: https://www.nvidia.com/en-us/cmp/

the GPU mining booms in 2014 and 2017 showed that nobody can keep up even without supply-chain disruptions.

the demand for machines that turn a quarter into a dollar is effectively infinite. It is always rational to turn $0.99 into $1, only bounded by the risk that you can't do that in the future and the machine loses its value. But as there are more machines in the market, that $0.25 starts to approach the $0.99 return, because mining rewards are distributed across more GPUs so each has less expected return.

(and this is ignoring some weird effects like some miners being willing to run at a loss due to stolen electricity/using it to move money past currency controls/etc)

So in effect cryptomining has this super weird demand curve where the demand is infinite for the bottom and middle parts of the curve, then as you pass the break-even point it actually reverses, and suddenly you're left with miners selling a bunch of used GPUs that undercut all the inventory you geared up to produce at 2x your normal sellthrough.

It's not just a normal supply curve because the demand is literally infinite, there's no "I have enough toilet paper to last a lifetime", the answer to how many money-printing-machines I want is always "all of them", as long as they're all profitable. And again, they're a durable good and when the demand becomes negative your customers will sell them all again and flood your market again.

Literally the only way to cope with that is an instantaneous supply chain - you need to be able to produce enough GPUs to immediately saturate demand and push to the "nobody makes any profit anymore" stage of the curve. But that's not possible in silicon fabrication even in a perfectly ideal scenario - you are doing really well if (like NVIDIA) you can gear up to produce 2x your usual production. There just isn't enough VRAM production on the planet to produce 100x your normal quantity for 2 months, let alone the GPUs themselves. And then you'd have to ramp it all immediately back down too.

And even then, once miners are done they flip all that production back into the secondhand market (often with higher defect rates, the current batch are suffering from GPU cores that explode due to moisture from when miners powerwashed them, as well as memory failing due to prolonged high-temperature operation, and miners are repainting markings on dies to obscure this).

You can't build a supply chain to support that. It's not physically possible. Again, 2014 and 2017 showed this. And the inventory overhangs in 2015 and 2018 showed this too.

The only answer is to get miners onto their own line of products so that it doesn't starve the rest of the market for 2 years and then snap back and flood the market with excess inventory (both unsold and secondhand). People really don't like the idea of being told what they can do with their cards but you can't balance a supply chain around crypto boom/bust cycles, it is not physically possible.

Mining during your spare time is a consolation prize for GPUs being unaffordable, it just gets you back to where you started. And we are now seeing the downside of the inventory overhang resulting from mining - both AMD and NVIDIA are slow-walking the new generation to let existing inventory (mostly NVIDIA) burn through. And that happened in 2018 too.

Ethereum is done for now, but I am in the camp that there will likely be more PoW coins that evolve in the 5+ year timeframe and put us back into the same situation. NVIDIA needs to put perfcounters on their cores that look at alignment and memory coalescing. If ~0% of your memory accesses are aligned and ~0% are coalesced that's highly likely to be a mining workload, since everybody else at least tries to align/coalesce to benefit from higher effective bandwidth, but this is inherently impossible in proof-of-work algorithms since the algorithm is supposed to be making inherently random, unpredictable access patterns. So you can detect kernels that are doing inherently unaligned work, and back that up with a whitelist from the driver of things that you know are good (validated via TPM that the driver hasn't been tampered), and slow down everything not on that list that seems like a mining workload.

And I mean slow down significantly, not just slow down 50%. NVIDIA wasn't interested in stopping mining, they only slowed themselves down to the same level as AMD so they wouldn't be preferentially sucked off the shelves.

And it turns out the secondhand dumps from miners aren't particularly cheap either, and didn't magically give us 3080s too cheap to meter. I said before that people often didn't do the math in the 2017 boom either, prices really only dropped about 30% from pre-boom prices (which were already significantly below launch MSRP - 480 4GB/8GB were $150/175 ish in early 2017, 1080 was down to low $400s, etc). It's tough to get a read on what a "true" pre-boom price is for Ampere/RDNA2 since they launched during the pandemic, supply issues, and really into the start of the mining boom ramp-up, there isn't a good reference. But I think that "roughly 30% below the 'true' baseline" figure has held pretty true.

(and again, the miners did dump, that's why there's GPUs with the dies exploding because they powerwashed them! they're also even making their way back into the supply chain as new/refurbished at times, because a powerwashed and remarked GPU looks pretty dang clean!)

"A person often meets his destiny on the road he took to avoid it" --Jean de La Fontaine.

With sufficient tracking of non-cryptocurrencies and physical goods governments could largely kill dark net markets by making it too hard to buy anything physical with your cryptocurrency. Imagine KYC but applied to every transaction instead of just large ones.

Making dark markets too easy isn't a win for personal liberty. Its a step on the road to a dystopia with little personal liberty or privacy because every time something seriously bad happens a few due to dark markets that would not have been possible in the legal markets the general public will demand something be done about it, which will result in government being granted more power.

That’s a good model. Gold and diamonds actually have industrial applications, but those price signals are lost in the noise of fashion and speculation. If they were suddenly unpopular, prices would drop, but not to zero.

I mean, I'm not trying to be "fair" to AI vs Crypto or predict the long future or analyze the distant past; a lot of folks may have given crypto way more immediate attention than they ultimately feel had a good payoff for them, and wonder if if all this AI hype will also be nothing but hype for the next many years, or if they should in fact devote their immediate attention to it.