World Coming to Terms with Cryptocurrencies, Says Nvidia CEO
Survival of cryptocurrencies is a ‘matter of trust’
The world is beginning to accept that cryptocurrencies are here to stay, according to Jen-Hsun Huang, co-founder and CEO of graphics cards manufacturing giant Nvidia.
In an interview with Barrons, Huang said that cryptocurrencies are “a real thing — it’s not going to go away,” adding that the “concept of virtual goods and virtual worlds and virtual currency all ties together.”
“It’s based on blockchain, and it’s very secure and very low overhead. I think there’s clearly real utility. It’s a real phenomenon, and so everyone is coming to terms with it.”
Cryptocurrency investors and players have been saying something along these lines for years. But Huang and his company are not involved in digital currency trading. In fact, he and other Nvidia executives admit that while demand from cryptocurrency mining machines has been steadily rising and now represents a “real part of our business,” the overall impact of that segment to Nvidia’s earning is still small compared to the contribution from data center operators and gamers.
Survival of cryptocurrencies is a ‘matter of trust’
On Friday, US Federal Reserve economists Michael Lee and Antoine Martin published an essay on the central bank’s website, emphasizing trust as the foundation for the survival of digital currencies. They insisted that a “matter of trustis implicit for practically any means of payment.”
Lee explained that any currency is given value based on the trust people have in it. That trust also makes a given currency an “acceptable medium of exchange” in a payment environment. But in the case of Bitcoin or digital currencies, the trust is not guaranteed by any government or institution, only by the blockchain technology itself.
“Cryptocurrencies arguably solve the problem of making payments in a trustless environment, but it is not obvious that this is a problem that needs solving, at least in the United States and other advanced economies.”