Image taken with Midjourney.
Bitcoin is worth more than Tesla, Western politicians struggle with AI policies and Elon Musk wants to make banks obsolete with X, The Platform Formerly Known As Twitter (TPFKAT).
Bitcoin up 106% this year
Halfway through the week, the self-proclaimed Gaza experts were back to being crypto bros for a day and it was party time in crypto land as Bitcoin briefly crossed the $35,000 mark. The price has already risen 106% this year, leaving Bitcoin far ahead of the number two crypto, Ethereum; the leading blockchain-based development platform which rose "only" 49% this year.
Of the investments I follow in my completely arbitrary Spotlight 9, only the engine of the AI economy, Nvidia, outperformed Bitcoin this year: shares NVDA are up a whopping 183% so far in 2023. Meanwhile, Bitcoin's share price is hovering just above $34,000, but the price increase of over 13% over the past week is extraordinary.
The price rise was mainly due to the expectation that a Bitcoin ETF will be approved. So there was not even the approval of an ETF, but the expectation that one will be approved. (I wrote earlier about a Bitcoin ETF: It's like a weatherman saying, "tomorrow it could rain. That does require a change in the cloud cover first.')
Graph created with Canva.
Bitcoin beats Tesla?
The unique combination of scarcity and tradability make Bitcoin a sought-after investment asset. Bitcoin is a scarce digital asset of which a maximum of 21 million will ever be made, and it is tradable 24 hours a day even from a cell phone. But Bitcoin's price is driven entirely by speculation and expectations. There is no underlying value, no company making anything on the basis of which future profits can be estimated.
There's nothing wrong with that per se, since people also invest in gold, trainers and whiskey; but of course we shouldn't start pretending that Bitcoin and corporations are comparable giants. Yet this week even the usually serious Coindesk went even further off track than a fifty-something at Amsterdam Dance Events on E by exuberantly headlining that "Bitcoin has overtaken the market value of Elon Musk's Tesla.
Image created with Midjourney.
Indeed, at the current price, the value of all Bitcoins combined is over $700 billion, which is more than Tesla's market value (the price multiplied by the number of shares outstanding) of $650 billion. But Tesla has assets: it has patents, factories, staff, a sales network and a well-stocked order book. Bitcoin has the transparency of its blockchain and a value determined solely by supply and demand.
By the way, for Bitcoin fanatics, there is good reason to observe some modesty if they think Bitcoin is a better investment than Tesla. Here are the price gains over the last 5 years of Bitcoin compared to Nvidia, Ethereum and ... Tesla:
- Bitcoin: 438%
- Nvidia: 654%
- Ethereum: 749%
- Tesla: 798%
As I was typing this, it occurred to me that Elon Musk must keep track of this, and in my mind I can hear him chuckling.
Hamas did not get millions from crypto
Less funny was an article in the Wall Street Journal claiming that the sandblasted version of the SS had raised millions from crypto donations. It led to questions in the U.S. Congress while investigations showed that the report was total nonsense. The Wall Street Journal refused to retract the article and once again it appears that the low interest of serious media in the crypto world leads to poor reporting, misrepresentation and as a consequence poor policy making.
Western leaders struggle with AI
Next week, President Biden and British Prime Minister Sunak are both making an effort to establish themselves as the most responsible world leaders on AI policy. Biden will do so by presenting an executive order on the use of AI and Sunak will hold a real world summit in a symbolic place.
Executive order of over 100 pages on AI
Someone who has read the Biden administration's long-awaited executive order on AI told VentureBeat that it is "the longest" he has ever seen, at more than 100 pages.
The presentation at the White House by President Biden is scheduled for Monday afternoon, during an event titled "Safe, Secure, and Trustworthy Artificial Intelligence." Choosing that name for an event about AI is as fitting as using "sociable, respectful and civilized" as a slogan for Twitter or "shy, sometimes petulant but always good-humored" for Hamas.
Beautiful symbolism by the British
Next week, some 100 world leaders, tech bosses, academics and AI researchers will converge on England's Bletchley Park campus, once home to the codebreakers who played a crucial role during World War II. (Two movie tips on this topic: Enigma starring Kate Winslet, in the role of Kate Winslet but with glasses and set in World War II and The Imitation Game with a brilliant role by Benedict Cumberbatch as Alan Turing.)
'Their goal is to participate in discussions about how best to maximize the benefits of this powerful technology while minimizing the risks,' said the BBC in an article with the hysterical headline 'Can Rishi Sunak's big summit save us from AI nightmare?' Biden is not there, by the way; he is sending Vice President Kamala Harris. Of course, as a world leader, you're not going to hype someone else's AI summit by going there yourself.
US and Singapore work on joint AI policy
Whereas the US and the UK excel mostly in one-liners and droll designations, Singapore earlier this year announced AI-Verify, a foundation with standardized tests for AI applications that helps companies and organizations use artificial intelligence (AI) "objectively and verifiably." Now Singapore and the U.S. will establish a joint group to promote transparency in AI implementations through technical and process audits.
That sounds boring, but is much more important than those meetings with politicians who don't even know the difference between AI and bad software. Because standardized testing of AI applications makes it possible to assess the possibilities and dangers of AI in actual use. That will really benefit the world. I know the organizations that will determine and conduct these tests, NIST on behalf of the U.S. and IMDA on behalf of Singapore, and they are very capable. I have high expectations.
Google invests up to $2 billion into OpenAI rival Anthropic
Google 's parent company Alphabet has invested $500 million in artificial intelligence company Anthropic, rival to OpenAI (maker of ChatGPT) and has pledged to invest another $1.5 billion over time.
Google is already an investor in Anthropic, and the new investment should help Anthropic compete with OpenAI's ChatGPT, which is backed by Microsoft. Amazon said last month that it would invest up to $4 billion in Anthropic.
Thus a titanic battle seems to be brewing between two camps: on one side Anthropic, backed by Google and Amazon, and on the other side OpenAI, backed by Microsoft. Despite all the covenants, summits and press conferences by folks such as President Macron, Prime Minister Sunak and President Xi Jinping, the AI market seems to have become a party as American as Thanksgiving Day. Wait, bad example: as American as Fourth of July.
There is simply no other country where so many billions are being invested in the necessary development. Because development of AI does not require millions, as in the good old days, but tens of billions.
Energy consumption of AI a growing problem
"Powering AI can consume as much electricity as a small country."
Dutch researcher Alex de Vries published an interesting article on the growing energy consumption of AI applications. Previously, De Vries published similar analyses on Bitcoin on his site. His analysis aligns with my view that traditional air cooling has reached its limits, which is why I was so excited about iXora's liquid cooling last week.
Around the breakthrough of AI, I see exactly the same pattern as with the breakthrough of the Internet in the 1990s and a little later with mass acceptance of the cell phone. The core criticism is always, "but what does this mean for copyright/proliferation of terror/education of our blood children/our contact with the elderly. Take your pick.
I estimate that it will take at most two weeks for the Western media to realize that this De Vries is touching on a very click-worthy subject with this and start publishing semi-critical pieces on the energy use of AI.
Because if you don't understand much about an innovation, the best thing you can do as a journalist is to be very critical for safety's sake so you can always say later that you have always been skeptical.
Elon Musk owns Twitter for a year now
The Verge was sent audio recordings where Musk tells his team that Twitter, or X as he has dubbed it,will offer full banking services before the end of next year. Meanwhile, X introduced two new subscriptions in an effort to generate more revenue as ad revenue continues to decline.
That's one of four problems the BBC sees at X. It's hard to take that analysis seriously when the British broadcaster also posts this sentence: "What we know for sure is a lot of big names have left the platform over the last year, including Elton John and Gigi Hadid." What you see in this is that the BBC does not understand the order: if the audience leaves, the people who have something to sell also leave. And not the other way around.
Instagram, Snapchat and TikTok did not break through because celebrities were on them; those celebrities created accounts after their management understood that the platforms offered a free communication channel with a mass audience without the intervention of traditional media.
Finally, two special links
At a time when so many children in areas like the Middle East and Ukraine have no chance to live normal lives and reach their potential, it is particularly sad to see someone who seemed to have everything at a young age, like Matthew Perry, who sadly passed away much too soon yesterday, struggle for decades to make it to the next day.
We know Perry mostly as Chandler from Friends. In an old interview with Conan O'Brien, we see him as himself when he tells a hilarious anecdote.
Still, I want to end on a positive note. Developer Prabhjot Singh created a device on the bargain-priced Raspberry Pi that can convert sign language into speech and convert speech into sign language, using a robotic hand. With the device, anyone can communicate with people who only know sign language. In this video, Singh shows how it works. Unfortunately, the sound is poor, but the way it works is clear!