GPU manufacturer Nvidia says digital currencies are “here to stay”

Nvidia (NVDA), the California-based maker of graphic cards (GPUs), remains bullish on Bitcoin and other cryptocurrencies, which have become one of the main drivers of its revenue.

On Friday the company released its second-quarter earnings report, which showed that company sales had increased 56% year on year to a record $2.23 billion (around £1.7 billion). Its GPU unit generated a revenue of $1.9 billion in Q2, up 59% from the same period a year earlier.

During the company’s earnings call, Nvidia CEO Jen-Hsun Huang noted the importance of GPUs for cryptocurrency mining.

“Cryptocurrency and blockchain are here to stay,” he said, as quoted by VentureBeat.” Over time, it will become quite large. It is very clear that new currencies will come to market. It’s clear the GPU is fantastic at cryptography. The GPU is really quite well positioned.”

Meanwhile, Nvidia’s chief financial officer Colette Kress said that the “recent rise in crypto coin prices resulted in increased demand in OEM GPU sales”.

Graphic cards are used for mining digital currencies like (LTC), which are based on the ‘scrypt’ hashing algorithm. Bitcoin, on the other hand, uses a hashing algorithm called SHA-256 and is primarily mined with dedicated equipment known as ASICs.

The cryptocurrency sector continues to grow and currently has a market capitalisation of nearly $139 billion. This growth is mainly driven by a sharp increase in the bitcoin price, moved above the $300 mark for the first time in over a month.

In today’s trading, Ethereum stood at $301.98, as of 13:51 BST. The digital currency has gained 3.8% over the past 24 hours, according to data from the GDAX exchange.