Nvidia CTO Claims Cryptocurrencies are Useless: AI Chatbots a Better Use of Processing Power

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Sam Cooling

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Sam Cooling

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Sam is a financial journalist with a focus on cryptocurrency market news, based in London. With a Master’s Degree in Development Management from the London School of Economics, Sam’s passion for...

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October 23, 2023 07:20 EDT

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It is not unusual for tech giants to have strong opinions on emerging technologies, and Nvidia CTO Michael Kagan is no exception.

In a recent interview with The Guardian, Kagan dismissed cryptocurrencies as providing no real value to society, suggesting AI chatbots like ChatGPT are a better use of the company’s resources.

However, Kagan’s arguments warrant a closer look, as they may not hold up to scrutiny in their entirety.

First, Kagan’s comparison between AI chatbots and cryptocurrencies is inherently flawed.

While AI chatbots offer undeniable benefits, their use case and purpose are distinct from that of cryptocurrencies.

Cryptocurrencies, such as Bitcoin, were initially designed to operate as a decentralized, secure, and private means of conducting transactions.

Comparing these two technologies would be akin to comparing apples and oranges – their utilities are simply too different to warrant a direct comparison.

Kagan’s Dismissal: Oversimplification of Multifaceted Issue

Second, Kagan’s dismissal of cryptocurrencies as a “craze” that “doesn’t bring anything useful for society” is an oversimplification of a multifaceted issue.

Cryptocurrencies have indeed transformed the financial industry, enabling faster and more efficient transactions across borders.

Moreover, they have empowered individuals in countries with unstable currencies to protect their wealth and access global markets, as witnessed in countries like Venezuela and Zimbabwe. 

Kagan’s dismissive stance overlooks these substantial societal benefits.

Furthermore, blockchain, the underlying technology behind cryptocurrencies, has potential applications far beyond the realm of finance.

Smart contracts, supply chain management, and secure data sharing are just a few examples of how blockchain technology can revolutionize various industries.

By disregarding the value of cryptocurrencies, Kagan is inadvertently undermining the potential of blockchain itself.

Nvidia’s Crypto Analysis is Misleading

Kagan’s assertion that crypto mining/validation is similar to high-frequency trading is misleading.

While both industries require vast computational power, their impacts on society are not comparable.

High-frequency trading has been criticized for its potential to destabilize financial markets, whereas cryptocurrencies have the capacity to democratize finance and provide opportunities for financial inclusion.

To equate the two is to misrepresent the core values and objectives of cryptocurrencies.

Nvidia when they aren't making any money from crypto miners anymore pic.twitter.com/8YgJ3KrBfE

— Navi24-chan 🌠 (@IridiumWings) March 26, 2023

Nvidia’s Anti-Crypto Stance Risks Stifling Innovation

Lastly, Kagan’s views on Nvidia’s role in the development of AI systems and its decision to limit its graphics cards’ mining capabilities are questionable.

While it is understandable that the company would want to prioritize its AI research and gaming clientele, it is important to recognize the broader implications of such a decision.

By limiting access to its hardware for cryptocurrency mining, Nvidia is potentially stifling innovation and contributing to the centralization of mining/validator power, which runs counter to the core principles of cryptocurrencies.

Kagan’s arguments against cryptocurrencies are, at best, an oversimplification of a complex issue, and, at worst, a dismissal of the potential benefits cryptocurrencies can bring to society.

By reducing the debate to a binary choice between AI chatbots and cryptocurrencies, Kagan is doing a disservice to the nuanced conversation surrounding these technologies.

Cryptocurrencies and AI chatbots can coexist, and it would be unwise to dismiss one at the expense of the other.

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