Considered the world’s most actively used blockchain network, Ethereum ETH/USD has successfully transitioned from a mining and energy-intensive proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) model that replaces miners with validators.
Dubbed as The Merge, this move has been touted to help improve Ethereum’s scalability, reduce its energy requirements and make its entire ecosystem more secure.
However, the elimination of the need to mine Ethereum will undoubtedly impact the overall global graphic processing unit (GPU) demand, casting doubt over the future growth potential of chipmakers like NVIDIA Corporation NVDA, Advanced Micro Devices Inc. AMD and others.
Delving into Nvidia’s quarterly results to understand the revenue share of GPUs in its overall business does paint a less extreme picture than what is being surmised.
Also Read: Ethereum Whale Abruptly Moves Over $145M In ETH: What Does That Mean For The Crypto?
ETH upgrade to impact NVIDIA revenue: Lian
Offering a viewpoint on how Ethereum’s transition will impact NVIDIA and other chipmakers, thought leader and best-selling author Anndy Lian says, “The Merge will completely remove the need for miners, who are currently securing the Ethereum network. They will replace them with validators. This upgrade would lead to a big revenue miss for NVIDIA, whose stock was down by nearly 20% compared to the previous quarter, associated to a slowdown in the gaming business and weakness in the global markets.”
The impact of the change to POS would be reduced if the forked POW chains can keep their demand high, getting support from big miners and backed by strong communities who believe that POW is the core value.
“If this is executed properly with the support of companies like NVIDIA, this market push is likely to put these listed chipmakers in a much better position,” Lian adds.
The world leader in the discrete graphics card business, NVIDIA’s graphics business contributes to 58% of the…
