3 Reasons Why Crypto Might Work For Venezuela (And Why It Might Not)

People are looking to cryptocurrency to solve all kinds of problems, from making sure that photographers get paid for their work, to addressing carbon emissions. Now the Venezuelan government hopes that a new digital coin might be able to counteract the country’s economic collapse.

As extreme inflation drags the Venezuelan bolívar down, food and medicines are scarce, crime is rife, and essential public services have buckled under the strain. Many residents have already fled the country. The new digital currency – dubbed the petro, in reference to its value being based on the price of oil – is the government’s last-ditch attempt to stem the flow.

Here’s why the plan might work:

It’s a Tried-and-Tested Strategy

Why do crypto companies run initial coin offerings? Because they are a great way to raise a lot of money quickly, and that’s exactly what Venezuela needs to pay off its debt. President Nicolas Maduro claims that the petro raised $ 735 million in the first day of its presale, as per CNBC. If that number is to be believed, the project off to a great start.

It’s Built Upon Existing Infrastructure

Wisely, the petro seems to be leveraging existing crypto technology, rather than starting from scratch with its own bespoke exchange platform. Venezuela does have plans to eventually open its own exchange, but the coin will also be traded on others. What’s more, the petro is based on proven blockchain technology – although its white paper and its buyer’s manual disagree on whether it’s built on Ethereum or NEM, as noted in a report from CoinDesk.

It Casts Off U.S. Sanctions

The Trump administration has introduced sanctions that prevent the purchase of new securities issued by the Venezuelan government in the American market, according to a report by The New York Times. The petro offers investors a way to sidestep these measures.

But Here’s Why it Might Not Work

Cryptocurrency can be volatile, and Venezuela is the first country to create its own digital currency in this manner. While various other nations are pursuing crypto, these projects are not desperate measures to save the future of the national economy.

It remains to be seen whether the petro will woo investors. People need a reason to invest in this untested coin – and given that the lack of ties to a central government has paid into the popularity of bitcoin and its ilk, the petro already has a mark against it.

 

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

The post 3 Reasons Why Crypto Might Work For Venezuela (And Why It Might Not) appeared first on Futurism.

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Crypto breakers: Why IoT users should worry about NVIDIA’s stock price

The connection between blockchain and cryptocurrencies on the one hand, and computer gaming hardware on the other, might not be immediately obvious. Nor the connection with AI, drones, robotics, and the IoT. But a big clue is to be found in NVIDIA’s recent financials.

Earlier this month, the Santa Clara, CA-based graphics hardware company reported annual revenues of $ 9.71 billion, a year-on-year increase of 41 per cent ($ 2.8 billion). Q4 revenue alone was up 34 per cent year on year, at $ 2.91 billion, with gross margins of 60 per cent, giving the company a record quarterly profit of over a billion dollars.

Within those Q4 figures, revenues from Graphics Processing Unit (GPU) sales were $ 2.46 billion, up by one-third on the same quarter last year. The message was clear: the GPU trade is booming, and this stands at the core of NVIDIA’s record-setting results.

For a company in the gaming, data centre, and (increasingly) AI business, that’s hardly surprising, and CFO Colette Kress was keen to credit gamers and the Christmas season for the figures. On the face of it, that seems like a watertight explanation. But is it?

The GPU arms race

Two things are certain. One, retail GPU prices are going through the roof for high-end models, reversing the standard IT trend of commoditising over time. And two, NVIDIA is a stock market darling. Anyone investing on January 1 2016 would have seen the value of a single share rise from $ 30 to $ 246 today.

Which is where things get interesting: that growth curve is remarkably similar to the graph for the market capitalisation of the cryptocurrency sector in the same timeframe. It’s not a coincidence.

NVIDIA share price (left) vs crypto market cap (right). (Image Chris Middleton, via public domain sources)

GPUs were designed to accelerate the creation of onscreen images. That’s a mathematically intensive, specialised task that runs better in dedicated, optimised hardware. But this high-speed number-crunching ability is why GPUs are now used to accelerate processing in many types of device and facility, including embedded systems, smartphones, and data centres, alongside PCs and gaming consoles.

It’s also why GPUs are increasingly important in IoT applications such as robotics, drones, and AI, where speed and responsiveness are crucial.

All of this explains why GPUs have become critical factors in another boom area: blockchain and cryptocurrency mining – the process of contributing a computer’s processing cycles to running distributed ledgers and cryptocurrency networks.

Seeking profit

Evidence from seekingalpha.com (from contributor Akram’s Razor) suggests that crypto mining, not gaming, may be the underlying reason for NVIDIA’s record financials. Hype-train jumpers have stockpiled high-end GPUs, stripping the retail and B2B supply market of stocks in their quest to build high-speed domestic rigs to help run these networks.

This has pushed prices through the roof for all GPU applications, depriving NVIDIA’s traditional customers of essential hardware.

In turn, this has created what some stock market analysts are calling a ticking timebomb for NVIDIA, which has gone out of its way to play down the impact of mining on its results.

In theory, the faster the processor, the better and more profitable the result from cracking the crypto code – although evidence suggests that those days may be passing.

Many now question why people are mining some cryptocurrencies for profit at home when hardware and electricity costs alone are slashing their margins. Indeed, some wannabe crypto-miners may simply have bought themselves a room full of expensive, unopened gaming hardware.

Others may flock to the cloud and ride the fortunes of the crypto market from a safe distance by letting remote data centres handle the loads (aka cloud mining).

And that’s the time bomb for NVIDIA, claim some stock market watchers: a retail market starved of stock, a massive aftermarket of unused GPUs (that may one day be worthless), a wave of hype attracting gamblers and amateur number-crunchers, and a vendor whose own financials may, some analysts allege, be tied to the volatile fortunes of the cryptocurrency market.

Internet of Business says

In a hyperconnected world, the creation of any new type of network – and networked behaviour – is freighted with risk.

So it will be interesting to see what happens when NVIDIA releases its long-anticipated Turing GPU, which is designed for currency mining applications.

But is the new hardware a hedge against its mainstream business, or a safety valve to take the heat out of its own internal economy? Might it already be too late to launch a dedicated chunk of kit? Either way, NVIDIA’s other customers in the data centre, AI, robotics, and gaming sectors may have to cross their fingers and hope that the GPU titan doesn’t crash.

But what’s the underlying lesson here, the hidden seam of code? It’s this: despite all the hype around blockchain and cryptocurrencies – and what some see as computers’ ability to conjure real money out of virtual air – there is always a cost in the physical world.

And that cost is in electricity, heat, energy, carbon, human labour, manufacturing and supply chain processes, and shipping GPUs into gamblers’ living rooms in piles of unopened boxes. This is the new relativity: the virtual and the physical world will always be equivalent; it’s just mass and energy all over again. Or love over gold.

Read more: Opinion: Use blockchain to build a global data commons

Read more: WordPress plugin hacked to mine cryptocurrency: government, ICO, NHS sites hit

The post Crypto breakers: Why IoT users should worry about NVIDIA’s stock price appeared first on Internet of Business.

Internet of Business

Coinbase promises refunds after repeatedly charging crypto fees

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Mining Crypto Takes So Much Bandwidth, It’s Inhibiting the Search for Alien Life

Thanks to the cryptocurrency craze, we might miss out on a call from E.T. Astronomers are reporting that they can’t as easily access the graphics processing units (GPUs) needed to run their powerful telescopes and radio arrays, as they’re being bought up by those looking to mine cryptocurrency.

Daniel Werthimer, chief scientist for the SETI (Search for Extraterrestrial Intelligence) project at the University of California-Berkeley, told the BBC that he’s found GPUs in short supply only over the past few months. Aaron Parsons, another Berkeley astronomer who works on the Hydrogen Epoch of Reionisation Array (Hera) radio telescope, had a similar story: he told the BBC that the price of GPUs his team needed had doubled.

Though designed specifically to render visual tasks, GPUs have been recruited for cryptocurrency mining thanks to their speed and efficiency at performing the repetitive computations needed. But they’re also essential for scientists that need to process large quantities of data, like those scanning radio waves from huge swaths of the universe in hopes of catching an extraterrestrial message.

“At SETI we want to look at as many frequency channels as we possibly can because we don’t know what frequency ET will be broadcasting on,” Werthimer told the BBC. “And we want to look for lots of different signal types – is it AM or FM, what communication are they using?” As a result, SETI has as many as 100 GPUs at some telescopes.

Radio astronomy isn’t the only victim of the cryptocurrency craze; a 2017 report highlighted the high carbon emissions produced by crypto mining, which requires large quantities of energy. Yet that cost could be remedied if the electricity needed were generated from renewable resources, rather than fossil fuels.

Parsons expressed concern that radio astronomy work, meanwhile, could be halted entirely if the GPU shortage continues. In that time, we could potentially miss a call from our galactic neighbors — and Earth doesn’t currently have an answering machine.

 

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

The post Mining Crypto Takes So Much Bandwidth, It’s Inhibiting the Search for Alien Life appeared first on Futurism.

Futurism

Salon asks readers to pick their poison: ads or crypto mining

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