How Could Nvidia’s Crypto Mining Business Worsen? A Class Action Lawsuit as GPU Demand Collapses
According to the Graphic Processing Unit development company, and graphics cards designer, Nvidia is going from bad to worse as it sees less that positive returns on its GPU sales for cryptocurrency mining. The company is now looking down the barrel of a class action lawsuit.
The reason? Because of the lower cryptocurrency prices that miners obtained through the use of these systems. The lower return on these cryptocurrency prices has, as a result, caused the price of these units to no longer to live up to the demands of miners. The legal action was announced by the legal company – Schall Law Firm, which made it known to the public on Christmas Eve 2018.
The law firm has stated that the suit has been filed against Nvidia due to “the company making false and misleading statements to the cryptocurrency mining market.”
Specifically, according to statements made by the organisation, Nvidia
“Espoused its own ability to effectively monitor the cryptocurrency market, allowing it to make rapid changes to its business as and when necessary.”
Schall's statement goes on to talk more about the otherwise inflated statements made by the GPU producer, which declared:
“Any drop off in demand for its GPUs amongst cryptocurrency miners would not negatively impact the Company’s business because of strong demand for GPUs from the gaming market.”
It was reported relatively recently that after the investment-based crash that befell the cryptocurrency field, so followed the crypto mining industry. Among those companies involved in the field of crypto mining on the S&P 500, Nvidia was recorded as being the worst performer within the index. This was not helped by the fact that this triggered a major sell off of its shares, causing its stock value to plummet by over 50 percent.
Some of the research which has been published by the global trading, technology, and research firm based out of the United States of America – Susquehanna – found that the use of Nvidia's Graphics Processing Units for the mining of Ethereum (ETH) was, thanks to the crypto crash over 2018, has rendered it non-profitable.
According to research from Susquehanna, the average monthly profit earned from using Nvidia GPU mining rigs to mine Ethereum slid down to $0 as of the beginning of November, which is a desperate collapse when compared to mining value of $150 as of July 2017.
GMO Internet, which is a company based in Japan, announces last week that it is officially moving away from its previous involvement in the cryptocurrency mining sector. It has cited the poor returns from its GPUs over this year.
While Nvidia has been approached for a comment on this legal action, it has yet to provide any official statement.