Is the Libra-disaster finally the end of the memecoin craze? And what does it mean for the future of Solana? Dr. Nisheta Sachdev is bullish, Michiel is skeptical, plus much more like the president of China talking with tech titans which sparked a comeback for the Alibaba stock price, the amazing amount of crypto sponsorships in Formula 1 and who predicts the market right, does not have to eat a green chili next week....
We originally did this as a joke, but a few hours later, this was our real reaction when Bybit got robbed of $1.46 billion.
Welcome back to the NFA Podcast newsletter! This week's episode was packed with major developments in crypto, AI, and finance.
Mubadala, the Abu Dhabi sovereign wealth fund with $300 billion under management, has made a significant move into crypto by investing $436 million in BlackRock's iShares Bitcoin ETF. This signals growing institutional confidence in Bitcoin, despite short-term market fluctuations.
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Libra Scandal: The Next FTX?
The Libra scandal has rocked the crypto world, with allegations of insider trading and fraud surrounding its launch. Kelsier Capital is accused of front-running the token and dumping $200 million worth of assets. Investigations reveal that the founders orchestrated a back pull via sniping, leaving investors with massive losses. Some are calling this the FTX moment for memecoins.
Is this the end of the memecoin era? Nish thinks so, while Michiel argues that speculative trading will always find new outlets.
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Microsoft's Quantum Computing Breakthrough
Microsoft has announced a major milestone in quantum computing with its topological qubits, which it claims will be more stable and scalable than other technologies. While some physicists remain skeptical, this could be a game-changer for encryption, AI, and blockchain security.
Michiel recalls a conversation with Ray Harishankar, an IBM fellow, who warned that once quantum computing reaches a certain level, it could break all existing encryption methods-including crypto wallets.
Ex-OpenAI Leaders Raising Billions for Competitors
Two former OpenAI executives are making waves:
- Ilya Sutskever's Safe Superintelligence (SSI) is raising funds at a $30 billion valuation to develop AI with a focus on security and stability.
- Mira Murati's Thinking Machines Lab is also in fundraising mode, though its valuation remains undisclosed. Murati has already recruited more than 30 former OpenAI and Anthropic employees.
For the first time in six years, Chinese President Xi Jinping has summoned the country's top tech leaders, including Jack Ma (Alibaba/Ant Group). This meeting could signal a shift in China's approach to regulating its tech sector, potentially opening the door for more innovation and foreign investment.
The other famous ex of top actress Amber Heard, Elon Musk, and Meta top executive Mark Zuckerberg challenged each other to an MMA fight this week, aptly described by the Guardian as a megarich-weirdocagefight.
Result of the prompt: 'three middle-aged white men in MMA fight, in an exploding nebula.'
That fight is obviously never going to happen, and it's downright pathetic that Airbnb chief Brian Chesky also tried to make headlines by proposing a bench-pressing competition for tech CEOs. Like a freshman wanting to tussle with two upperclassmen boys at a school dance. First, let the man reflect on how he managed to demolish the soul out of the inner cities of Barcelona and Amsterdam in a way that generalissimo Franco and that short tempered Eastern neighbor didn't even manage.
Meta-top guy Mark Zuckerberg is trying to appear cooler at the urging of his spin doctor, the English ex-Vice Prime Minister Nick Clegg (whose website, by the way, is identical to mine because we use the same template, one of us needs to do something about that). Zuckerberg previously appeared for nearly three hours on Joe Rogan's popular podcast, and recently Lex Fridman, whose podcast is always very engaging, laid out the red carpet for Zuckerberg for two hours and 42 minutes.
Cynics noted that these are probably not coincidental venues where Zuckerberg's rival Elon Musk is a frequent guest. Musk got into marijuana with Rogan, and I can see Zuckerberg wanting to top that by sucking the venom out of a live Amazonian frog during the broadcast in a Kambo ritual. Instead, the rivals exchanged some lame texts, Zuckerberg on Instagram and Musk on Twitter.
Herein lies precisely the crux of the problem. After all, Zuckerberg once bought Instagram but is not the founder; those were Kevin Systrom and Mike Krieger, who are currently causing a furor with their new company Artifact. Musk in turn bought Twitter for $44 billion. While the whole world is busy with AI, the gentlemen are anxiously trying to stay in the news with their products of a previous generation.
Musk visionary, Zuckerbergexecutive
Musk is a maverick to say the least, but undisputed as a visionary and entrepreneur. While he was not the founder of Tesla, he was one of its first investors. Musk is the driving force behind the development of electric cars worldwide. Without Tesla, for example, Mercedes would never have built the EQS or Hyundai the cheaper models. I have no idea whether SpaceX is useful or an unnecessary side effect of too much testosterone, but it is a phenomenal achievement for a software maker from South Africa to successfully set up a rocket builder in America that values itself at a whopping $150 billion, Bloomberg reported Friday.
Zuckerberg never gets this respect because the one company he built, partly because of the movie The Social Network, will always be remembered as invented by others. Facebook's success was in Zuckerberg's brilliantly created "timeline" product, the addictive way of organizing friends' posts in one place.
But before Facebook, there were social networks like Friendster and MySpace, or in the Netherlands, Hyves. Facebook is effectively a Habbo Hotel grown out of its strength. Zuckerberg bought Instagram ($1 billion) and Whatsapp ($19 billion), and that shows his gift as an executive, not a visionary developer.
Tip: Andreessen at Fridman
Which is why it was all the more embarrassing for Zuckerberg that Marc Andreessen was Lex Fridman's guest this week. Andreessen was the principal developer of the first graphical Web browser Mosaic, co-founder of the first major dotcom company Netscape and, with his investment firm Andreessen Horowitz, financier of over 300 companies, including not only hits like Airbnb, Coinbase and Pinterest, but also ... Instagram, Facebook and SpaceX.
Andreessen is 51 years old and has been respected as an entrepreneur, visionary and investor for 30 of those years. Anyone comparing the appearances of Andreessen and Zuckerberg at Fridman will be struck by Andreessen's much broader view of the role of technology in society than Zuckerberg, who seems to be able to view the world exclusively through very narrow Facebook glasses.
It is therefore no coincidence that Andreessen has invested heavily in OpenAI, currently the undisputed leader in AI worldwide. Neither Musk nor Zuckerberg plays any role in AI developments. I also refer again to the excellent, thoughtful piece Andreessen wrote about AI early this month, titled "Why AI Will Save the World.
What did Zuckerberg share with the world this month? Who posted an Instagram video of himself training with a world champion jiu jitsu. That's the new geek version of buying a Porsche 911 convertible in a midlife crisis.
McKinsey sharp about AI
In recent weeks I've written more than enough about AI, but so much is happening that I want to share a few more tips. First, a new McKinsey report on the economic potential of AI. I immediately confess that I have not meticulously studied all 50 pages, but the summary on page three is already highly recommended.
Cover photo exudes that signature McKinsey warmth, but the report is fascinating
The report concludes that GenAI could add "$2.6 trillion to $4.4 trillion annually" to the global economy, almost the economic equivalent of adding an entire new country the size and productivity of the United Kingdom to the earth ($3.1 trillion GDP by 2021). To prepare the report, McKinsey analysts surveyed 850 occupations and 2,100 detailed work activities in 47 countries, representing more than 80% of the global workforce.
(I repeat it almost weekly when it comes to the bizarre numbers in the AI industry: a Dutch trillion is a thousand times a billion; in English, a trillion is a "trillion" and a billion is a "billion. Those designations are as useful as the invention of the mile, inch and el).
An example from the McKinsey report showing the meteoric development in AI:
'Claude, Anthropic's generative AI, in May 2023 was capable of processing 100,000 tokens of text, equivalent to about 75,000 words in a minute - the length of an average novel - compared to about 9,000 tokens when it was introduced in March 2023.'
So Claude's throughput increased from 9,000 words per minute to 75,000 words within two months!
The Mistral.ai presentation of €105 million
Last week I wrote about Mistral.ai, the French company that raised the highest funding ever from a European company in a first round, at €105 million. That made me curious about the presentation used for investors, and it is now here.
Notable is the format, a Google Doc, and the total lack of illustrations or photos. It reads more like a seven-page white paper from academia and the crypto industry. (Incidentally, Mistral.ai's seven-page memo is exactly one page shorter than the Bitcoin whitepaper, which reminded me of the famous "7-minute abdominal workout" from Something About Mary. We are waiting for the first entrepreneurs to raise over 200 million with six pages).
Motivate yourself with yourself, went wrong
Speaking of gut training; I stumbled upon this tweet explaining how to use MyShell to create a chatbot using your own voice. The point of talking to yourself is completely unclear to me, but of course I immediately recorded a minute of my own ramblings in accordance with instructions using the Voice Memo app on the iPhone, uploaded it to MyShell and gave some character descriptions to my robot twins like "eternally positive, motivating and not cynical.
In short, my chatbot was especially not supposed to look like me but nevertheless, after the very first question, I disliked my own AI chatbot.
My AI chatbot twins are particularly irritating, and you haven't heard the voice yet
Unfortunately, or fortunately, I cannot include the voice of my chatbot in this newsletter, but let me summarize it this way: the AI-generated robot-Michiel combined the blood-irritating gym-positivism of Arie Boomsma, but without the delightful body, with my weak sandpaper voice, but without my signature modesty.
Short AI news
Don't call us an AI startup: this AI startup foresees a glut of AI startups and therefore does not want to be called an AI startup. And of course, anno 2023 you may identify yourself as a startup however you like.
Prince Constantine at Humberto Tan: If we start banning instead of tolerating, won't Europe become an outlet for American companies instead of a player and producer? That, in summary, is the question raised by Constantijn van Oranje on Radio 1, partly in response to State Secretary Van Huffelen's ongoing waffling about more legislation. Constantijn also rightly noted that the mistake should not be made of confusing AI, self-learning systems, with old-fashioned Hollandsche automation, or "double-check anyone of color not named Van Huffelen or Van Puffelen. (Examples here, here and here.)
With the tidal wave of AI applications, real photos are no longer distinguishable from fakes, look for example at Photoshop's amazing new "generative fill. I wrote earlier about Unveil, the Dutch platform that provides a counterweight to all the AI-generated photography-bagger and is also mentioned in the Parool article as an example in the NFT world.
Unveil, which will open to the public in the coming weeks, collaborates with top photographers and precisely guarantees the authenticity of each work, with both the photographer and the collector benefiting from the transparency offered by capture of each work in the blockchain.
Blockchain transparency also shows that the prices of the famous Bored Ape NFTs collapsed this week and this article explains why.
Other interesting links
Decades-long bet on consciousness ends - and it's philosopher 1, neuroscientist 0: Neuroscientist Christof Koch made a bet with philosopher David Chalmers 25 years ago that researchers would know by now how the brain arrives at consciousness. Consciousness is the main core of life, so this bet is about something. I am also aware that in this bet, England finally won over Germany.
Worldcoin's World App is interesting decentralized ID and payment option: unfortunately there was no Orb, the iris scanner, nearby, to authenticate me but it's still an interesting app to download. You carry your ID and bank with you in your own wallet, so you have a world passport and you are your own bank.
Bitcoin and Ethereum continue to benefit from BlackRock
The crypto currencies BTC and ETH are the winners of the week. The recovery set in last week after the unexpected news that the world's largest asset manager, BlackRock, filed an application with the SEC for a Bitcoin spot Exchange-Traded Fund (ETF). I wrote about that last week but did not expect then that Bitcoin would go over $30,000 and stay above that. Once again, it appears that I have few predictive gifts when it comes to investing.
What has also become clear is that the crypto market, led by Bitcoin, is currently moving independently of the mainstream markets that closed Friday in minuscule territory. By contrast, of the 149 crypto assets included in the CoinDesk Markets Indices (CMI), 144 rose last week. If this trend continues into the summer, or just stabilizes around these prices with Bitcoin staying above $30,000 and ETH around $2,000, autumn seems like the time for another crypto rally with the markets also reopening to new crypto projects. And even the biggest crypto-optimist would not have dared to dream that at the beginning of this year.
It was another of those typical crypto days when the angry outside world did not seem to exist and all the news was interpreted positively. Granted, there was also positive news with the letter to BlackRock shareholders and additionally Goldman Sachs using the words cryptocurrencies and Metaverse on its homepage. But the reaction of the market, especially the crypto media, was greatly exaggerated.
BlackRock is the largest fund manager in the world, managing nearly $10 trillion, but that sounds like a lot less than when you write it out: 10 trillion is 10,000,000,000,000 and then I may be a zero off. But it's almost a thousand times a billion. More than 9 million times a million. In short, they plus nicely.
Because what exactly did Blackrock chairman Larry Fink actually write in his letter to shareholders? Search for the words "crypto" or "blockchain" and the result is zero twice, versus 24 times "Russia" and 9 times "Ukraine. In a document with more than 30 paragraphs, as many as one was about digital currencies. The passage that made crypto Twitter go wild was:
"As we see increasing interest from our clients, BlackRock is studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our clients."
Joh.
It would be heavenly if BlackRock did not keep an eye on a fast-growing 2 trillion market, the size of the entire crypto market. It's less than 20% of what BlackRock manages, of course, but enough to keep an eager eye on. Probably not to take a position yourself, but to try to grab a piece of all the trades.
By the way, I had to shed a tear at this sentence:
"Digital currencies can also help reduce the cost of cross-border payments, such as when foreign workers send income back to their families."
Because if BlackRock cares about anything, it's the fate of the guest worker migrant worker.
As if it were agreed work, the fringe truffle sauce of investment banks, Goldman Sachs, also came up with this sentence on its homepage:
Discover the megatrends reshaping economies, from cryptocurrencies to the metaverse.
It feels like your old physics teacher suddenly starts breakdancing in the middle of class. I searched for the words "NFT" and "Bored Ape," but to no avail. They are not that crypto woke at Goldman Sachs.
As if the party couldn't end, Cointelegraph saw on Twitter that Eric Balchunas, Bloomberg analyst, predicted that the SEC could finally approve Bitcoin ETFs in 2023. Only that would require a change in the definition of the term "exchange.
"Once crypto exchanges are compliant, the SEC's main reason for rejecting spot Bitcoin ETFs would no longer be valid, likely paving the way for approval," analysts said.
That is a valid argument, but that change in definition has such a large impact that it is not a certainty that it will be adopted. Bloomberg knows that too, hence the wonderful "could" in their forecast. Like a weatherman saying, "tomorrow it could rain. That does require a change in the cloud cover first.'
Meanwhile, less florid crypto news, such as the recurring discussion about the energy required by Bitcoin mining (with wonderful photos) and the possible change in law in the European Union that could ban Proof of Work, were completely overlooked. Banning Proof of Work, by the way, would be absurd; instead, more nuanced discussion on the subject is needed. Like on anything related to crypto, blockchain and NFTs.