Red Queen says fading crypto ?

Mining is the foundation of crypto. Miners run custom rigs to solve math problems that earn coins. Last year semiconductor maker AMD garnered massive revenue by selling graphics GPUs to miners. The way those GPUs are configured to do common graphics tasks mapped nicely to how the math can be solved for mining.

Live by the sword … you know.

Today AMD announced sharply falling earnings. “A significant chunk of graphics card sales through normal retail channels during the cryptocurrency bubble should have been classified as blockchain-related but weren’t. Now those sales are disappearing, catching AMD off guard.”

AMD sells globally. The sheer cost of fabs (semiconductor factories) means there are only a few fab firms. Its results are strong evidence that crypto might be running out of gas everywhere. Fewer people are getting into mining. Most everything else on crypto builds on this.

Wait a minute. What about all those existing GPUs sold in earlier quarters for mining? Maybe they are still being used for mining? Yes. But mining methods for some coins (especially Bitcoin) ramp up the amount of computation you have to do to get new coins. Her Majesty the Red Queen told us this over a century ago. If miners collectively don’t buy new chips the inputs (coins) to the global cryptosystem will decrease quarter by quarter.