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De grote trends van 2024: AI, crypto en koolstofverwijdering

Er zijn op dit moment drie grote trends in technologie die zowel worden gedreven door technologische, als door sociologische en politieke stromingen: AI, crypto en carbon removal (koolstofverwijdering). Deze baanbrekende ontwikkelingen worden zoals elke grote innovatie met scepsis ontvangen, een patroon dat al decennia zichtbaar is.

PC: “te duur en nutteloos”

In de jaren tachtig, toen de personal computer opkwam, werden pc’s vooral gezien als te duur voor een apparaat zonder veel relevante toepassingen. Dat veranderde snel dankzij prijsdalingen en standaardisatie van software, nadat MS-DOS dankzij een uitgenast licentiemodel van Microsoft uitgroeide tot wereldstandaard. De tekstverwerker en het spreadsheet maakten de PC snel onmisbaar op kantoor.

Internet: “te moeilijk en gevaarlijk”

In de jaren negentig herhaalde dit patroon zich met internet. De pc werd gezien als een werkinstrument, niet als een potentieel massamedium. Bill Gates verklaarde zelfs dat internet gebukt ging onder gebrek aan standaarden, het was onveilig en veel te ingewikkeld, reden waarom hij in zijn boek The Road Ahead het woord internet nog geen tien keer gebruikte.

Bill repte liever over de information super highway, die hij zelf wel effe ging aanleggen met het gesloten MSN, waar we verder nooit meer iets over hebben gehoord. Toch maakten email, de web-browser en toepassingen zoals eBay, Amazon en Google internet binnen een paar jaar toegankelijk voor consumenten.

In Nederland duurde het tot eind 1996 voordat het NOS Journaal begreep dat internet een serieus massamedium ging worden, al werd de penetratie van de computer door Joop van Zijl nog wel vergeleken met die van de magnetron.

Smartphones: “alleen voor vertegenwoordigers”

Toen de iPhone in 2007 op de markt kwam heerste de Blackberry in de zakelijke markt. Hoewel het grootste deel van de bevolking in ontwikkelde landen al een mobiele telefoon had, vaak een Nokia, was de kritiek op de iPhone niet mals. “Te duur, alleen handig voor vertegenwoordigers”, zo oordeelde een vriend uit notabene de IT-wereld. Overigens dezelfde knakker die tien jaar eerder over de mobiele telefoon oordeelde als ‘alleen handig voor drugsdealers‘, een veel gehoord sentiment.

Microsoft-CEO Steve Ballmer lachte de iPhone weg in een video waarin hij, zoals hem was aangeleerd door PR-mensen, snel overstapte op het promoten van het eigen Windows Mobile waar we verder ook nooit meer iets over hebben gehoord. Het maakt de prestatie van CEO Satya Nadella om Microsoft na Ballmer compleet nieuw leven in te blazen des te knapper, maar daarover een andere keer.

AI, crypto en koolstofverwijdering aan de beurt

Op dit moment zien we exact dezelfde patronen als voorheen, maar nu over AI, crypto en koolstofverwijdering:

  • AI wordt vaak afgedaan als nuttig voor werk, maar zonder nuttige toepassingen voor consumenten.
  • Crypto wordt bekritiseerd met opmerkingen als: “Noem een toepassing.” Intussen ligt de eerste toepassing in iets elementairs als het herontwerpen van het bancaire systeem, waarbij elke gebruiker zijn eigen rekening beheert en banken overbodig maakt. Blijkbaar wordt de significantie hiervan door velen gemist. Tip: ga nooit in discussie met mensen die te lui waren om het Bitcoin whitepaper te lezen, maar wel een mening hebben.
  • Koolfstofverwijdering wordt vaak getypeerd als fraude, waarbij wordt verwezen naar bekende voorbeelden zoals inefficiënte kookovens, zonder de complexiteit en potentie te kennen of te begrijpen van projecten die wel daadwerkelijk koolstof verwijderen uit de atmosfeer, zoals ocean fertilization. Dit soort verwijdering van koolstof uit de atmosfeer is de grootste opgave die de wereld te wachten staat in de komende decennia. Tip: ga nooit in discussie over klimaatverandering met mensen die te lui waren om de samenvatting te lezen van recente IPCC-rapporten.

Toegegeven: ik heb een persoonlijke fascinatie voor de wijze waarop innovaties doorbreken of mislukken. Daarom heette zowel mijn afstudeerscriptie in 1993 als mijn boek uit 2001 allebei “Op zoek naar de Heilige Graal,” hoewel een of andere mafkees de omslag heeft gefotoshopt van mijn boek dat overigens nog steeds in grote aantallen te koop is. En niet vanwege het grote succes.

Ik leerde meer van Megamistakes dan van Megatrends. Iedereen kent de adoptiecurve van Rodgers, maar het blijft mysterieus waarom de ene innovatie wel aanslaat en de andere genadeloos flopt. Voor koolstofverwijdering, crypto en AI zijn er verschillende belangrijke succesfactoren, waarvan ik er een aantal wil belichten.

CO2-succes was niet tijdens COP29

Voor de doorbraak van koolstofverwijdering is politieke bereidheid een vereiste. Alle media waren gericht op de klimaattop COP29 in Bakoe, maar intussen werden er in Brussel en Washington successen geboekt in de strijd tegen klimaatverandering.

In Brussel keurde de Europese Raad de oprichting goed van het eerste EU-brede certificeringskader voor permanente koolstofverwijdering, koolstoflandbouw en koolstofopslag in producten. Dit vrijwillige kader is bedoeld om een certificeringssysteem te creëren waarmee koolstofverwijdering kan worden gekwantificeerd, gemonitord en geverifieerd en om greenwashing tegen te gaan; koolfstofhuichelen. De goedkeuring van de nieuwe regels door de EU markeert de laatste grote wetgevende stap om groen licht te geven voor de oprichting van het nieuwe certificeringskader voor koolstofverwijdering.

Dan nu in het Nederlands: er worden standaarden ingevoerd waardoor bedrijven en burgers daadwerkelijk hun koolstof-uitstoot kunnen compenseren en dan niet door flutbossen te planten of te behouden, maar door CO2-uitstoot meetbaar tegen te gaan of nog beter, CO2 uit de atmosfeer te verwijderen.

Democraten en Republikeinen samen voor koolstofverwijdering

In de Verenigde Staten werd een wetsvoorstel ingediend door senatoren Lisa Murkowski (Republikeins, Alaska) en Michael Bennet (Democraat, Colorado) met als doel subsidies voor koolstofverwijdering uit te breiden voor een breed scala aan technologieën die bedoeld zijn om koolstofdioxide permanent uit de lucht en zeeën te verwijderen.

De wet zal waarschijnlijk nog niet worden aangenomen door het huidige congres wegens tijdsgebrek, maar de introductie ervan wijst erop dat subsidies voor koolstofverwijdering ook onder president Trump zullen worden uitgebreid. Het feit dat de wet werd ingediend door senatoren uit beide partijen, een zeldzaamheid tegenwoordig, stemt hoopvol.

AMC’s voor CO2

Let komende jaren op de term Advanced Market Commitment (AMC), hier toegelicht door de Economist: ongeacht hoe de politieke wind waait, is de druk uit de samenleving op decarbonisering zo groot dat slimmere bedrijven zelfstandig proberen om hun eigen koolstofafdruk te verwijderen of minimaal te compenseren, door het financieren van technieken die koolstof verwijderen voor lange termijn; liefst voor altijd. Salesforce, Google, Meta en Microsoft zijn slechts de eersten uit een lange lijst bedrijven die AMCs zullen financieren.

Een ander voorbeeld: vorige week werd bekend dat Planetary Technologies 138 ton CO2 heeft verwijderd via ‘Ocean Alkalanity Enhancement (OAE)’, waarbij door het toevoegen van mineralen of stoffen de alkaliniteit, de capaciteit van de oceaan om CO2e te absorberen, wordt verhoogd met als doel CO₂ vast te leggen en  klimaatverandering tegen te gaan. Kopers van de bijbehorende carbon removal credits waren Shopify (96 ton) en Stripe (42 ton) op basis van een ‘vooraankoopovereenkomst‘. Bij Scrabble leg je hem niet snel, maar het bestaat echt en zal veel worden gebruikt.

Old school tech vergeleken met AI en crypto

Beurswaarderingen zijn een weerspiegeling van marktverwachtingen en het enthousiasme rond AI en crypto toont aan dat investeerders vertrouwen hebben in hun potentieel op langere termijn. Ik heb vier virtuele ‘mandjes’ aangemaakt waarover ik vaker heb bericht:

  • ‘MANAAM’: de old school techbedrijven
  • Spotlight 9: de negen m.i. toonaangevende tech-beleggingen
  • AI Spotlight 9: negen bedrijven die profiteren van AI
  • Crypto Spotlight 9: de grootste negen crypto’s gemeten in marktwaarde

Old school tech MANAAM: +36%

In de bredere techsector blijven gevestigde spelers domineren. Ooit waren beleggers fan van de term FANG (voor Facebook, Apple, Netflix en Google, alsof Microsoft niets voorstelde), maar laten we het groepje ‘MANAAM’ nemen, bestaande uit Meta (voorheen Facebook), Apple, Microsoft, Amazon, Alphabet (voorheen Google) en Netflix. De gemiddelde stijging van de aandelen van dit inmiddels klassieke clubje bedraagt dit jaar liefst 35.9%. Dat is vanuit beleggingsperspectief fenomenaal, tot je bedenkt dat de S&P 500 dit jaar ook al 27.19% in de plus staat.

Spotlight 9: +63%

Microsoft (14%), Alphabet (22.28%) en Apple (27.84%) doen het niet eens beter dan de index. Terwijl beleggers tech-aandelen kopen voor de hogere koersstijgingen, als compensatie voor het hogere risico.

Geen koopadvies, maar indicatief: de Spotlight 9 is +63%

Wie echter de Spotlight 9 had gekocht, die bestaat uit de belangrijkste techbedrijven en de twee grootste crypto’s Bitcoin (+119%) en Ethereum (+57%), zou de beleggingsportefeuille dit jaar al 63.37% hebben zien stijgen. Vergeleken met de MANAAM ontbreekt Netflix in de Spotlight 9, terwijl Nvidia (+187%) uiteraard is toegevoegd als ’s werelds meest waardevolle technologiebedrijf.

AI Spotlight 9: +76%

De waardering van AI-gedreven bedrijven zoals Nvidia, die een sleutelrol spelen in de ontwikkeling van AI-infrastructuur, heeft recordhoogtes bereikt. Dit laat zien dat de markt de snelheid erkent waarmee deze door AI opgestuwde bedrijven hun resultaten zien stijgen.

Ondanks AMD, Gigabyte en Super Micro doet de AI Spotlight 9 liefst + 76%

Omdat Nvidia al is opgenomen in de Spotlight 9 heb ik de marktleider buiten beschouwing gelaten in mijn eveneens compleet arbitraire ‘AI Spotlight 9’, bestaande uit negen bedrijven waarvan ik het vermoeden heb dat ze door AI sneller zullen kunnen groeien dan de toonaangevende grote techbedrijven (de MANAAM-groep) en wellicht zelfs sneller dan de Spotlight 9.

Met een groei van 76.11% is dat dit jaar zeker het geval, waarbij het helemaal opvallend is dat deze stijging tot stand komt ondanks Super Micro (dat de accountant het hazenpad zag kiezen), AMD (-1%) en Gigabyte, hardware-partijen die de groei van de rest niet bijbeenden. Softwarebedrijf Palantir (+305%), waarover ik begin november schreef, maakt het verschil meer dan goed.

Crypto Spotlight 9: +191%

Sinds de goedkeuring eerder dit jaar van Bitcoin ETFs, stroomden al tientallen miljarden vanuit de traditionele beleggingswereld richting crypto. Het wachten was op het moment dat de ‘alt rotation‘ zou beginnen, het moment waarop er meer geld naar andere cryptovaluta vloeit dan naar Bitcoin, wat geldt als het onofficiële startschot van ‘altcoin season.‘ Dat moment vond gisteren plaats, toen de Ethereum Spot ETF netto instroom, die naar Bitcoin oversteeg.

Crypto Spotlight 9: +191% en hier zit geen memecoin tussen.

De echte durfal stapt daarom nu groot in de meest malle muntjes die vaak geen enkele onderliggende waarde bevatten, maar dat is even risicovol als in een casino alles op rood of zwart zetten. Een minder risicovolle strategie, voorzover dat mogelijk is in crypto, is om te spreiden in de grootste cryptovaluta en te profiteren van het algehele sentiment.

De ‘Crypto Spotlight 9’ bestaat uit de grootste cryptovaluta gemeten naar marktwaarde, waarbij stable coins, memecoins (crypto-gebbetjes) en tokens die gekoppeld zijn aan cryptobeurzen zoals BNB, buiten beschouwing worden gelaten.

Dat groepje, alfabetisch gerangschikt als Avalanche, Bitcoin, Cardano, Ethereum, Solana, Stellar, Toncoin, TRON en XRP, behaalde dit jaar tot nu toe een stijging van 191%. Is dit dan een koopadvies? Absoluut niet.

Wat ik wel iedereen aanraad die actief is op het gebied van technologie en innovatie, is om zich te verdiepen in AI, koolstofverwijderings-technologie, blockchain en cryptovaluta. Net zoals in de jaren tachtig met de pc, internet in de jaren negentig en de smartphone vijftien jaar geleden, zijn dit ontwikkelingen die wereldwijd onstuitbaar zijn.

Een praktische manier om op de hoogte te blijven is om dan een beetje te investeren in die sectoren, waarbij ik aanraad om dit alleen te doen met geld dat je niet nodig hebt voor de huur, hypotheek of andere dagelijkse beslommeringen. Ook binnen technologie en crypto loont het zeker om goed te kijken naar wat de beoogde beleggingen daadwerkelijk behelsen; wat doet Palantir eigenlijk, wordt Ethereum bedreigd door Solana en SUI; en is het niet grappig om toch een klein gokje op memecoins te wagen?

Wie er wat geld instopt, gaat zich vanzelf informeren. Het alternatief is een wekelijkse nieuwsbrief schrijven over tech en innovaties, maar dat vereist ook een enorm ego.

Hartelijke groet, dank voor de belangstelling en tot volgende week!

Categories
investing crypto

Crypto Spotlight 9: altcoin season about to start?

Of the largest tokens, Dogecoin stands out with over 20% rise, but Shiba Inu is the winner with 34% rise in a week. 

Again (and I can repeat this almost weekly): I don't give financial advice, but the public markets determine the financing of innovations that startups develop, the core of this newsletter. That's why I try to follow the public markets for stocks and crypto.

It is particularly notable that Bitcoin passed through the $65,000 mark again this week, leading many analysts and experts (of which I am certainly not one) to suspect that the altcoin season has begun.

The strange thing is that the huge increases in Dogecoin and Shiba Inu, the big memecoins, were not accompanied by a good week for Ethereum, which remained flat. That leads to a dilemma:

"Recently, Glassnode founders Jan Happel and Yann Allemann, also known as Negentropic on X, revived hopes of an approaching altseason. According to them, the crucial moment could occur when Bitcoin surpasses its previous all-time high (ATH) of $74,000. For now, altcoins are merely hitching a ride on the leading crypto's upward trend, but a shift could be near.

They believe that once this threshold is crossed, the crypto market could experience a general surge. The usual cycle would then begin: “Bitcoin in the lead, followed by Ethereum, then large caps before mid and small caps,” Negentropic specifies. But since May, Bitcoin has made three surges without triggering this famous altcoin season."

In other words, no one understands what is going on, but things are looking good.

Crypto is no longer a fad

From the comments, I understand that crypto is a very polarizing topic. Returns (or losses!) of 20% to 35% per week are only for the investors with strong stomachs. Next month marks the 16th anniversary of Bitcoin's white paper, so we can conclude that it is not a short-lived fad.

If you are reading this newsletter, I assume you are interested in innovation and not too conservative to try new things. My main arguments for at least starting to experiment with crypto with a limited amount are, first, financial sovereignty, the fact that you have complete control over your own assets without the intervention of a bank or broker; and second, protection against inflation, especially with crypto currencies with a guaranteed maximum supply like Bitcoin. 

I hate to end this newsletter as some sort of quote from Wikipedia, but I don't want to leave unmentioned that smart contracts in blockchain are similar to Lego bricks in that, as building blocks, they offer infinite possibilities to automate services and processes. Compared to Amazon's AWS, for example, smart contracts offer the same flexibility and scalability within the blockchain, but without a centralized service provider. And instead of users then just lining the pockets of Jeff Bezos and Amazon shareholders, participants in crypto ecosystems share in the profits.

Of course, governments must protect consumers from fraud and money laundering, as I wrote about the problems at Binance in 2022. But it will be interesting in the coming weeks and months to see how Kamala Harris, if elected president, will strike the balance between ensuring investor safety and encouraging innovation.

Categories
investing crypto technology

Token2049 Singapore proves: Web3 alive and kicking

I am sending this newsletter from Singapore, where the area around Marina Bay has been dominated for the past week by over twenty thousand visitors to Token2049, the largest Web3 event in the world. Although the conference officially ended on Thursday, some of  the more than 800(!) side events are still going on. Solana even held its own event Solana Breakpoint on Friday and Saturday, when the Formula 1 weekend was already in full swing.

'Hate the game, don't hate the players.' Some pre-war marketing tactics are still current in the Web3 world

Vitalik Buterin star of Token2049 

Amid the usual self-promotional talk and non-discussion, one speaker stood out: Vitalik Buterin, co-founder of Ethereum. Buterin emphasized that Ethereum, once plagued by slow and expensive transactions that prevented mass adoption, can now perform large numbers of transactions quickly and cheaply.

Buterin then overshadowed the content of his own speech by breaking into a song. Still, it was an engaging and rare human moment at an otherwise marketing-dominated event.

It remains painful to see top athletes such as Lando Norris and Max Verstappen sit on panels with their crypto sponsors. McLaren is sponsored by crypto exchange OKX while rival exchange Bybit is a major contributor to Red Bull Racing's immense budget.

Verstappen and Norris had to answer hard hitting questions such as "is teamwork in Formula 1 as important as in business". It would be nice if for once Verstappen would answer: 'how nice that you asked, those other 900 employees of the team are just goofing around and I actually do everything myself; I put the stickers on the car myself the night before a race, pump up the tires in the morning and refuel the car neatly after the race as well'.

It remains unclear whether, apart from the ego of the proud sponsor parading next to "his" driver on the podium, anyone is any the wiser from such a kind of obligatory freestyle. Other crypto-sponsors in Formula One such as Stake (Alfa Romeo), Tezos (Red Bull), Kraken (Williams) and Fantom (Alpine) were less visible. 

Buterin's presentation made one curious about the film that has been released about him. Investor Fred Wilson said:

"This film is about the Ethereum blockchain and the developer ecosystem. But in reality, it's a chance to spend just under ninety minutes with Vitalik, where you learn more about him, how he lives, thinks and how he became who he is today.
I've been in the blockchain business for almost 15 years. I am a fan and holder of Bitcoin. I am a fan and holder of Solana. I am a fan and holder of Ethereum. I am a fan and holder of many other protocols, tokens and communities. I am fully into all of these.
But I must say that Vitalik has a special place in my mind and heart. He doesn't just talk pretty words; he lives by his beliefs and leads from those principles. He is a very special human being. And this film manages to show that in a great way."

Hopefully the film will soon be available to the general public, as at the moment it can only be seen through a complicated streaming service - which is onchain, of course.

Solana with its own phone

Token2049 covered four floors of booths and stages in the immense Marina Bay Sands convention center, but the main networking took place during the side events. For days, it was virtually impossible to eat or drink anything in the dozens of restaurants around Marina Bay, as all the hospitality venues had been rented out by companies for private events.

Although Token2049 officially ended on Thursday, Solana took over with the Solana Breakpoint conference on Friday and Saturday. Here it introduced the Seeker, a cell phone integrated with the Solana ecosystem. Linking a proprietary hardware device like a phone to a crypto ecosystem offers a new dimension to the growing diversity of Web3 applications, and in a market dominated by Apple, Samsung and Chinese phone makers, it is a very brave move. Whether it becomes successful is a question for another day.

Another theme that kept popping up during Token2049 was the increasing integration of the Web3 industry with the traditional financial sector, or TradFi. Still, the future of this arranged marriage remains unclear for now, at least until after the U.S. presidential election.

The Web3 world is openly hoping for a victory for Trump, who is more crypto-friendly than Harris. Or as one Indian-American Web3 insider said, ''I am brown and I know Trump doesn't like brown people; but he is pro-business and pro-crypto. So if he wins and helps our business grow, I'll make sure I help myself. Then we won't need Kamala." This rather cynical sentiment was quite prevalent this week.

Spotlight 9: Nvidia remains in the lead

Following the interest rate cut announced by the Fed, the stock market closed at record highs and the U.S. jobs market also did extremely well. It is interesting to end the third quarter by looking back at the performance of tech stocks in this calendar year so far.

At three quarters of 2024, the bottom line: Nvidia is not a one-day wonder

The clear winner this year is without a doubt Nvidia, up over 140%. If we look back a little further at what buying Nvidia shares would have yielded exactly one year ago, the chipmaker's success is even more eclatant. A $4,351 investment in 100 shares of Nvidia a year ago would be worth $11,338.71 today, which is an incredible gain of $6,987.71.

Again, I repeat it almost every week, I don't give financial advice, but I also don't want to shy away from what I think is an inescapable conclusion: Nvidia can hardly go wrong in the coming years because the demand for its products will remain high as long as the AI hype among the big players like Microsoft, Google, Meta, Amazon and Oracle continues.

Only when the world's biggest tech companies begin to doubt the return on their investments in AI, will Nvidia have a harder time growing in revenue and profits. Until then, it is an industry leader with no direct competitor.

Meta's more than 60% increase this year should not go unmentioned. Although that is partly explained by the sharp correction last year, the ad-driven network's margins remain as high as ever.

TON fastest riser in crypto

Despite the arrest of Telegram founder Pavel Durov, Telegram-affiliated TON has been a phenomenon this year, with 144% increase

Bitcoin (BTC) has outperformed stocks following the Federal Reserve's decision to cut interest rates by 50 basis points on Wednesday, but the real winners in the crypto world are the altcoins.

Total3, an index that tracks the market capitalization of the top 125 cryptocurrencies, excluding Bitcoin and ether (ETH), was up 5.68% since the announcement of the rate cut. In contrast, Bitcoin's market capitalization rose only 4.4%.

The success of TON, which today stands for The Open Network but evolved from Telegram Open Network, continues to be linked to the growth of Telegram. A whole ecosystem of "Telegram Mini Apps"(TMA) is now emerging around Telegram that enable all sorts of applications, from gaming to fund raising, from which the TONcoin benefits.

Today the exciting week in Singapore concluded with the always spectacular Formula One Grand Prix at the Marina Bay circuit. As an opening act for Lando Norris and Max Verstappen, 30 Seconds to Mars (with multi-talented Jared Leto) and Kylie Minogue performed, while after the race Lenny Kravitz demonstrated how to stay cool in leather pants in 90 degrees and almost 90% humidity. All in all, it was a fantastic week.

Thanks for the interest and see you next week!

Categories
AI invest crypto technology

Nvidia baffles investors, but crypto beats AI with ease

The reason this newsletter appears later than ever is due to the fact that I spent hours calculating, because I didn't trust my math. Walked the dog and then calculated everything again. But the result remains the same: those who bought the biggest tech stocks last year did worse in terms of returns (up 34%) than those who focused on AI stocks (up 96%). Yet even AI stocks, even if you pick the best performing ones, lag far behind the big winner over the past year: crypto. And then we didn't even have to choose critically. Anyone who bought the nine largest crypto tokens at the end of May 2023 would now have earned a return of 189%.

My Spotlight 9, consisting of the largest tech stocks and two leading cryptos, Bitcoin and Ethereum: average +71% in the last year

Nvidia: technical marvel and stock market miracle

Exactly one year ago, I first wrote about Nvidia, which then posted 64% revenue growth compared to the same quarter in 2022. This week, Nvidia presented jubilant quarterly results, with a 262% increase in revenue and an eye-popping 462% increase in earnings. It seemed like a good time to compare Nvidia to other tech stocks, AI companies and the biggest cryptos.

Anyone who looks at Nvidia with an even slightly longer lens, for example, at the stock since Nvidia's IPO in early 1999, will be astonished, as I am, that the shares have risen from a split price of $0.25 to over $939, representing an unimaginable gain of 375,500%. Three hundred seventy-five thousand percent. And a half.

Many investors found Nvidia overvalued last year, with price-earnings ratios above sixty. Most tech investors also have little use for crypto. So the presumption is that very few investors followed "my" Spotlight 9. Admittedly, neither have I myself! The 10-for-1 stock split (buy 1, get 10 shares) announced this week makes NVDA stock much more accessible to retail investors.

Remove Nvidia, Bitcoin and Ethereum from my (obviously very arbitrary) Spotlight 9, the returns of Alphabet, Amazon, Apple, Meta, Microsoft and Tesla are only 34%. Many so-called insiders often talk about FAANG (Facebook/Meta, Apple, Amazon, Netflix and Google/Alphabet), but I really don't understand why Netflix is in that so-called basket of digital market leaders and Microsoft is not? It is the largest company in the world by market value and also a 49% shareholder in OpenAI.

I digress. The 34% price gain of Spotlight 9 shares without Nvidia, Bitcoin and Ethereum is obviously not at all wrong. But those who had simply bought an S&P 500 tracker also made a very fine 26.14% gain. With lower costs and less hassle.

The basket of stocks I compiled as 'AI stocks': 96.33% return in the last year

AI stocks beat Big Tech

Early this year, I tried to create a sort of counterpart to Big Tech with the AI Spotlight 9, to quickly compare their performance. Only: Nvidia and Microsoft are the biggest players in AI and thus belong in the AI Spotlight 9, alongside AMD, Broadcom, Crowdstrike, Gigabyte, Palantir, Snowflake and Super Micro.

It is striking that Super Micro has outperformed Nvidia, with a whopping 303% share price gain, by "only" 173%. Simply because Super Micro was undervalued, more unknown and now probably a touch overvalued.

Just how hot the market is for AI companies is evidenced by the fact that anyone who bought this basket of nine very subjectively chosen by me on January 1, stocks that I believe are benefiting from the AI wave, would have made a whopping 64% return. (I know that at least one reader bought the entire month's basket, but again: it's not me myself).

To put this 64% in perspective, that's a return within five months, compared to 34% in an entire year from the Big Tech stocks in my "old-fashioned" Spotlight 9: Alphabet, Amazon, Apple, Meta, Microsoft and Tesla.

Not AI, but crypto eats the world

For a while, that's why I felt smart, until I started on the third "basket": crypto. It turns out to be the old song. If you're playing poker and you don't know who the fool at the table is, it's you. Note:

The nine largest cryptos measured by market value in the last year: +189% and Solana as the outlier with 750% increase.

These are the performance of the nine largest cryptocurrencies, measured by market value, over the last 365 days. Granted: it helps that this measurement takes place within 48 hours of the unexpected approval of an Ethereum ETF by U.S. monetary watchdogs, after which prices rebounded.

But even without this recent tailwind, the crypto market has skyrocketed in the last year. To be honest, I didn't see it coming. But all that reading of white papers, annual reports, interviews with top people and clients notwithstanding; I should have just bought a basket of the ten biggest cryptos and made 189% price gain without thinking. Pay particular attention to Solana, which rose 750% in one year!

Biden discontinues fight against crypto

The crypto market has the wind in its sails from all sides. Interest rates are not doing anything crazy and Donald Trump has already announced that under his reign the crypto market will not be given a leg up, much to the irritation of the Democratic camp.

The problem for the Democrats is that the continued backlash against the crypto market does not generate votes, but costs votes. Politically, this is a futile strategy. So Biden is bound to cave and the sudden approval of an Ethereum ETF cannot be separated from the new political winds.

Meanwhile, though, the question remains as to which applications are actually innovative and of any use. Web3 games are still getting a lot of attention, but are still in incubation stage.

Those delving into blockchain developments often come across the term RWAs: Real World Assets, which BlackRock seems to have great interest in. Think of tokenizing, for example, bonds, real estate or, as the Tracer project aims to do: carbon removal credits.

Last Thursday, I spoke with Chief Business Officer Gert-Jan Lasterie and Chief Technology Officer Philippe Tarbouriech in an approximately 45-minute webinar, which can be seen here.

Categories
crypto technology

Spotlight 9: Apple shares rise despite revenue decline

Apple's magic: revenue down, profit margin up, stock gains

"The lines at Apple's flagship store in Union Square and other locations around the world used to be endlessly long, with hordes of eager customers camping out for days to be among the first to get their hands on the latest products. Ten years ago, the Apple hype seemed unstoppable as the company unveiled a steady stream of gadgets.

Today, however, Apple is at a crossroads. As the Cupertino, California-based company struggles to revive consumer enthusiasm for its products from the past decade, Apple reported its biggest quarterly revenue decline in more than a year."

Both Reuters and the Washington Post are wringing their hands to explain how it can be that Apple shares rose, after it was announced at the quarterly earnings call that revenue fell again; by four percent even from a year earlier, to $90.75 billion. Net profit, however, fell only two percent, to $23.64 billion. Analysts inferred that Apple increased profitability is because the company has become more efficient. Still, the question for Apple is, "What's next?

Crypto crawls upright

Bitcoin seems to be missing from the chart above, but the change in price was less than one percent, which is imperceptible to the naked eye. Ethereum fell harder, but over the entire week, crypto enthusiasts will be pleased that Bitcoin climbed back above $60,000 and Ethereum rebounded to above $3,000. 

Some technical analysts are convinced that altcoin season is upon us, but less optimistic souls worry about the U.S. SEC's attempt to classify Ethereum as a security, an investment. That's nonsense, but more on that later in the podcast, scheduled for launch in June.

Categories
crypto technology

A new gigaton industry: CO2 removal

Mammoth in Iceland: an example of direct air capture (DAC) and carbon storage

Decarbonization, the removal of carbon, has become a critical tool in the fight against climate change, but it also seems promising as a means of global economic acceleration.

If that doesn't sound like a phrase I smoothly roll out of my keyboard, that's right: it's a quote from McKinsey's excellent report, "Carbon removals: how to scale a new gigaton industry. I had missed this report from last December, until I listened to this fascinating podcast by McKinsey people last week and searched for more information.

McKinsey focuses on CO2 removal

The ever-critical McKinseyians must think I am selling their research short in my summary, but a few conclusions can be drawn from their report and the podcast:

  • Carbon credits play a crucial role in achieving the goals of the Paris Climate Agreement (COP21). Carbon credits allow companies to offset their emissions and achieve climate neutrality. For every ton of CO2 a company reduces or prevents, a credit can be issued and traded on the carbon market. This encourages innovation and green technologies.
  • There is considerable doubt about the quality of many of the current carbon credits, especially the old-growth forest type where credits are issued for not cutting down trees that have been there for years.
  • Technology-based removal methods are becoming more important, and even cheaper, than natural solutions such as reforestation.
  • The capacity for CO2 removal (called CDR, for carbon dioxide removal) is still far from the gigaton scale needed to achieve a CO2 neutral world by 2050.
  • There is a need for greater transparency in verifying the authenticity and duration of carbon removal, increasing liquidity for more efficient trading, and standardizing quality and validation processes across markets. Addressing these issues will increase the integrity of carbon credits, reduce skepticism and expand the market.
  • McKinsey wouldn't be McKinsey, if the report they produce didn't involve a gigantic market: and yes, according to critical McKinsey minds, this CDR market of technology that removes CO2 is going to be a whopping $1.2 trillion: twelve thousand billion. By 2050, admittedly, but I hold them to it.
McKinsey: Technology that removes carbon gets cheaper, while nature-based solutions get more expensive. 

Enthusiastic about Tracer

In all honesty, I am so elated by McKinsey's report and podcast because I support a project that addresses exactly the problems identified and helps develop a market that McKinsey says will thus grow into a new gigaton industry: Tracer.

Tracer is the answer to the question: how do you scale the carbon credit market from small, opaque and without liquidity, to huge, transparent and liquid? This is extraordinary, because so far the solutions have been either liquid or transparent. Either efficient or reliable.

Tracer solves that with the elegance of a single smart contract, within which - it must be said - it does make the most of what is currently possible in terms of smart contracts. For enthusiasts, the "secret sauce" is the combination of a fungible and a non-fungible token in the same smart contract making it possible to offer buyers a single portfolio with multiple projects as the source of the carbon credits.

Compare it to a "basket" of stocks among fund investors. Buying carbon credits this way from different sources was not possible until now, making this market hell for companies buying large amounts of credits.

Persistence is the key

For example, last week at the GenZero Summit in Singapore, Salesforce's Chief Impact Officer Suzanne DiBianca sighed that when she buys carbon credits for millions of dollars, she receives as documentation "a few PDFs and, with any luck, another Excel spreadsheet. Like it's 1998, but in a billion-dollar market!

What I find special about Tracer is that it offers large buyers such as Salesforce a solution that does provide precisely the full transparency required, through a rating model based on "persistence"; by this is meant the length of time the carbon is removed. Choosing that persistence as the key factor - because some projects provide 100-year removals and others 10,000 years - also ensures right away that large amounts of carbon removal credits are easily comparable and thus tradable.

Combine that with an easy-to-understand business model to build out the ecosystem (a percentage of the number of carbon removal credits created when using the smart contract) and reward holders of the TRCR governance token for their contributions, and you have a proposition that I do appreciate.

Call me

I share this not only because it is rare that I agree so wholeheartedly with the McKinsey people, who often excel enormously at predicting the future well in retrospect. I mean: just look up a McKinsey report from say 1994 predicting the breakthrough of the Internet ... exactly. But I digress.

Because I am sharing this information today because Tracer is offering the opportunity to join before May 31 at an early movers fee, which is apparently blockchain speak for "soft-price-as-you-quickly-bent-friend," before the public sale starts this summer.

The first information on how to join Tracer is here in Dutch and here in English. I know the international team, which is led by Chief Business Officer Gert-Jan Lasterie (Flabber, Coolblue, Mediahuis and author of this standard work on crypto currencies) and further includes specialists from the US, France, Singapore and Taiwan. 

Don't hesitate to contact me, because although I am not an expert on the matter, I am happy to explain why I support Tracer so fanatically and invite people to do the same.

Categories
crypto technology

Sense and nonsense of carbon credits and Bitcoin halving 

Two seemingly incomparable conventions took place this week: Singapore sovereign wealth fund Temasek organized EcoSperity in Singapore and sunken Dubai hosted Token 2049, the semi-annual party of crypto bros. In Dubai it was mostly about Bitcoin and in Singapore it was about carbon credits. Two opaque, moderately regulated markets that nevertheless attract billions from investors because of their undeniable usefulness.   

Bitcoin halving happened during the EcoSperity climate week

I attended the Climate Summit 2024in Singapore, part of EcoSperity, organized by Temasek subsidiary GenZero, which is trying to make investments that combat climate change with five billion dollars. Much of the talk at this climate conference last week was about the doubts in the "climate tech sector" about the quality of carbon credits since The Guardian and Die Zeit published scathing articles about them last year.

Instead of phasing out fossil fuels, years have been lost and huge investments have been made in the vague carbon offset schemes that trade, limit and capture carbon, without actually reducing the CO2 emissions that cause global warming.

The VoluntaryCarbon Market(VCM) is estimated to be about two billion dollars a year and consists of a complex network of developers, registries, traders, brokers and investors, making it difficult to determine the effectiveness of offset projects.

An old park does not remove CO2

On his show Last Week Tonight, comedian John Oliver took a strong stand against the hot air in carbon credits that made a comeback mainly after COP21, the climate conference in Paris. There, in 2015, nearly two hundred countries agreed that carbon credits would be the most important tool to limit global warming to one and a half degrees.

I attended COP21 in Paris for several days and then spent hours listening to experts explain how the "limit and trade" system was going to reduce carbon emissions, but understood little of it. Unfortunately, rightly so, because research shows that forestry offsetting projects, approved by the world's largest certifying bodies and used by Disney, Shell, Gucci and other large corporations, are largely worthless and may even exacerbate global warming.

The critical media reports have had much effect, because the days when some loopy dictator could designate an old forest whose nonexistent carbon credits were then sold several times over to, say, an unsuspecting European bank, after which the trees were still cut down and the timber sold, seem to be over for good.

The Guardian explains
 how carbon credit trading works

The future belongs to carbon removal credits

There is broad consensus that offsets should only offset emissions that are impossible to avoid. However, the focus should be on ways to permanently remove CO2 from the atmosphere, because just limiting emissions is not enough. Projects that permanently remove CO2 do not generate carbon credits, but the much more relevant carbon removal credits.

Precisely because of the emergence of carbon removal credits, the expectation of Morgan Stanley and others is that the carbon credits market will increase fifty-fold to one hundred billion dollars by 2030. The idea is simple: carbon is becoming more and more expensive, because it is increasingly taxed more heavily, which combined with higher quality carbon removal credits will lead to much more demand at a higher price, which will be imposed by governments.

Good examples of carbon removal projects are:

  • Bioenergy with Carbon Capture and Storage (BECCS): This technology captures CO2 emissions from biomass power plants and stores them underground.
  • Direct Air Capture (DAC): These are technologies that capture carbon dioxide directly from the air. The captured carbon can then be stored underground or used to produce low-carbon fuels.
    Enhanced rock weathering is a strategy to help address climate change by taking carbon out of the air and storing it in rocks. It is one of several “carbon removal” techniques that target carbon dioxide (CO2), the most important climate-warming greenhouse gas humans have been adding to the atmosphere.
     
  • Ocean fertilization, or ocean fertilization (OF): ocean fertilization involves adding nutrients, usually iron, to the ocean for the purpose of stimulating the growth of phytoplankton; and for those like me who are not completely at home in the magical world of phytoplankton, which are microscopic marine plants that absorb carbon dioxide through photosynthesis. When this phytoplankton dies and sinks to the ocean floor, it can carry the captured carbon with it and store it for long periods of time.

Although more research needs to be done on possible long-term effects of ocean fertilization, it appears to be a very cheap and effective way to remove carbon and combat global warming. 

For those interested in learning more about the need for carbon credits and the issues surrounding their quality, I have written this article with brief summaries of seven relevant publications from Morgan Stanley, Harvard Business Review and S&P Global, among others).

Source: International Energy Agency

How do we achieve and finance CO2 capture?

As companies approach their target dates for "net zero" emissions, they are increasingly turning to carbon credits to meet their goals. Currently, however, at the aforementioned $2 billion market size worldwide, the market for carbon credits is far too small to reduce companies' entire environmental impact.

Climate startups need much more funding to develop their technology. 'Companies need to become earlier funders of carbon removal technology and commit earlier to become future customers', said Meghan Sharp of Decarbonization Partners, a joint venture between BlackRock and Temasek.

It came across as odd at first that Sharp, in particular, which manages the billions from two of the world's biggest investors, was making an appeal to other companies to fund climate technology developers. But she had a point, illustrated by Henrik Wareborn of the renewable fuels technology company Velocys.

Wareborn signed a  15-year agreement with Southwest Airlines. This agreement was signed as early as November 2021, years before Velocys' biorefinery will supply fuel commercially. So Southwest Airlines is actually funding the creation of climate technology it will use itself.

Sharp cited as a second example a billion-dollar loan from the U.S. Department of Energy to Monolith, a clean hydrogen and materials company funded by Decarbonization Partners. This money allowed Monolith to expand its production facilities in Nebraska and welcome Michelin and Goodyear, two of the world's largest tire manufacturers, as customers.

"This is an example of how companies can also play a role, not by funding the project itself, but by making the project more secure and investable through these types of purchase agreements." Sharp said. After all, investors are more likely to invest in a startup that already has revenue guarantees from global companies.

Tesla made $1.8 billion in revenue from carbon credits in 2023

American giants Apple, Tesla and Salesforce are each leading the way in their own ways in the use of carbon credits. Apple , by using carbon credits, made the Apple Watch its first "carbon neutral" product.

Tesla made nearly $1.8 billion in revenue from carbon credits in 2023

Tesla even sells carbon credits, last year for a record $1.8 billion bringing Tesla's total sales from carbon credits since 2009 to nearly nine billion dollars.

Salesforce is the largest employer in San Francisco and named sustainability as its fifth core value back in 2022. The company announced $100 million ito scale and commercialize Carbon Removal Technologies and even opened its own marketplace for carbon credit projects.

To my surprise, Salesforce's Chief Impact Officer Suzanne DiBianca confessed Tuesday at the Climate Summit that the carbon credits market is still so in its infancy, that after purchasing carbon credits, as proof of transaction the company receives PDFs with sometimes a few more Excel-spreadsheets. In addition, each registry (such as Verra, Gold Standard or American Carbon Registry) uses its own classification system of carbon credits, making standardization and comparison difficult, if not impossible.

Three recommendations from Oxford

A multidisciplinary team from Oxford University recently published an updated version of its carbon credit manual for businesses, called the Oxford Offsetting Principles "flagship guidance " with three key recommendations:

  1. Prioritize reducing your direct and indirect emissions: reduce the need for offsets. 
  2. Ensure the integrity of carbon credits: credits must be measured, reported, verified and properly accounted for. Investments that generate credits must demonstrably lead to additional results that would not have been realized without that investment, have a low risk of reversion, and avoid negative impacts on people and the environment.
  3. Provide transparency - Disclose your current emissions, accounting and verification practices, goals and transition plans to achieve net-zero, as well as the type of credits you use, your selection process and the verification processes associated with the credits.

You feel it coming: to my knowledge, there is virtually no company in the world that adheres to these recommendations. It is precisely disclosure, the third recommendation, that should be required by law, just as annual figures must be published.

A world to win for blockchain

Of course, companies themselves must take care to reduce their emissions. But precisely in capturing, reporting and accounting, the transparency and immutability of blockchain can be of crucial value to the entire carbon ecosystem.

Most importantly, the source, the "enabler" of CO2 removal, must be clearly visible and the removal permanent. The proper use of blockchain technology can create a market where, to cite a previously mentioned example, airlines pre-fund the development of sustainable aviation fuel (SAF), as Velocys is paid for by Southwest Airlines. Then governments would not have to step in and only increase the pressure by raising taxes on carbon emissions.

Crypto meets climate

Recently, the UN climate conference COP28 was held in Dubai, where crypto-congress Token 2049 took place this week. While at the same time, Ecosperity Week was held at Singapore's iconic Marina Bay Sands, where the Asian edition of Token 2049 will be held in September. Perhaps the fact that crypto events take place in the same venue as climate conferences underscores that they are not such different worlds as is often thought.

By the way, climate played a major role during the days leading up to Token 2049, when persistent rainstorms in the Gulf region caused massive flooding in Dubai and air traffic experienced major problems. Preparations for Token 2049 also literally fell into the water with flooded exhibition stands, but the event took place without further major problems.

Symbolic halving moment

It was almost symbolic that the most recent Bitcoin halving took place Friday during Token 2049. Crypto icon Meltem Demirors explained on CNBC why the halving is important.

Demirors explains the consequences of the latest Bitcoin halving

While attention at the halving is obviously focused on Bitcoin's expected price rise, which has already been spectacular since Bitcoin ETFs attracted over $10 billion from investors this year, the halving also has an interesting "energy effect."

With Bitcoin miners earning less after the halving, costs will again be looked at heavily. As a result, Demirors said, the expectation is that miners will look for lower energy costs, more renewable energy and also primarilyturn on their machines during off-peak hours on the energy grid. Hopefully, this will reduce Bitcoin' s carbon emissions.

Demirors points out that it is unusual for Bitcoin to reach a new high in March, just before the Bitcoin halving, whereas in the last two halvings, Bitcoin's new high was reached nine to 12 months after the halving. Therefore, she doubts that Bitcoin will continue to rise quickly to a new record price near or over the hundred thousand dollar mark, as many expect.

The crypto market is moving mostly sideways right now, with investors seemingly waiting for big price swings after the halving. From the major tokens,only XRP rose unexpectedly hard this week: a whopping 22%. 

Viewed from a slightly greater distance, it is important to follow the movements of the very big money. Then one notices that BlackRock, the world's largest investor with ten trillion (ten thousand billion) dollars in invested assets, has become very active in both markets: Bitcoin and carbon removal technology.  

Categories
AI crypto technology

Ayatollah at the controls, crypto market plummets

Welcome to the fiftieth edition of this newsletter, in which I intended to look back, pontificate and stare into the distance, all inspired by Dutch comedians Koot and Bie classic line: "But enough about myself, what do you think of my hair? But then an ayatollah pushed a few buttons, forcing even the announcement of my new podcast to give way to the impact of world news. Because if there's one thing I excel at, it's modesty.

Originally I wanted to spend this 50th edition mostly on the final breakthrough of crypto, which is slightly ironic because after the Iranian attack on Israel, Bitcoin and Ethereum, in particular, are experiencing the biggest drop in a year.

Iron Dome saves markets

Crypto trading never stops so while Wall Street celebrates the weekend, BTC and ETH plummet

In the above price chart of the last five days, the cryptos' decline is especially notable because Microsoft stock and the S&P 500, which I included for comparison, have been stationary since Friday. Chances are that when Wall Street opens tomorrow, the market will be over the initial shock and the equity markets will fall less than the crypto market this weekend. Also because Israel's Iron Dome is holding up well, as Wired explains.

If Iran's leaders wanted to hit the detested West harder, they should have attacked on a day when Wall Street was open. Now Bitcoin and Ethereum in particular are getting the brunt of it, with all the altcoins in their wake.

For those who want to follow the crypto market at a glance, the top 100 biggest risers and fallers is always handy. In this, one can distinguish between the "hit list" within the top 100 largest cryptos measured by market cap; or for the real daredevils, the overview of all coins. It is not unusual to see in it, like today, a riser of 32951% (this is not a typo) like Policy or a fall of 98% like NTD is experiencing.

Except that those kinds of tokens have nothing to do with investing or innovation, so don't expect any attention to the latest memecoins or other geeky stuff here. Those are the crypto versions of roulette or slot machines, only with even worse odds. Blockchain technology offers special opportunities, especially when combined with a decentralized structure such as Bitcoin, unfortunately those aspects tend to be underexposed because of all the nonsense in crypto.

New: Crypto Spotlight 9

The best cryptos in the last month beat tech stocks, but note the huge price differences in the top nine cryptos!

Original idea: a podcast

There are seemingly between three and five million podcasts in the world, so high time to add one. No fear of me rehashing my drivel in audio form: I'm not doing this alone. I'll be co-creating the podcast with a successful entrepreneur who has made his mark in online media and e-commerce.

The nice thing is that he started his startup while he was still a student, but after selling his company decided to join a very successful e-commerce company first and later work in the corporate world to broaden his experience. This unique combination offers a special perspective on the technology of today and tomorrow.

My co-presenter also happens to be an expert on cryptocurrencies and author of a leading work on the subject. His expertise allows him to make analyses and predictions, to which we are going to hold him to.

We want to make a weekly effort to analyze tech news and look a little beyond the delusions of the day. Don't expect reflections on the number of megapixels on the new iPhone or the clock speed of an Nvidia GPU. What we want to discuss is: how do Microsoft and Google react when Amazon makes its AWS even more attractive to AI startups? And what does that mean for you if you work at a startup, or indeed at a large corporate, and see all this technology coming your way?

Please be warned

The very fact that we make a newsletter and a podcast about technology and innovation shows that we have the pretense of being able to proclaim something meaningful about it. But it's more fun to make that pretense measurable.

So we are each going to build an investment portfolio, which will consist of a mix of tech stocks and crypto currencies. (Although one of us will be cowardly enough, or wise enough, to include an index fund.) Either way, we're going to keep score weekly.

We're going to try to get smarter together. Very happy to get suggestions, comments and questions from readers and listeners to respond to. But in any case, what we're not going to do is give tips or advice. Please remember this motto: "read the newsletter and listen to the podcast, but never listen to us."

The lightning quick reaction of the markets to developments in the Middle East this weekend does underscore the need for us to offer some sort of alert function as well. Think of a message when one of us adjusts his investment portfolio because he expects a price change of more than ten percent. But again; that's not investment advice then.

Do you have any tips, advice or warnings? I'd love to hear it via email or in a comment on LinkedIn and Medium, where this newsletter appears in English.

I do demand make up for every podcast, like here in Singapore during the ATX Summit 2023. Even it's audio only.

Special links

Some noteworthy items from this week:

AI researcher Dr. Andrew Ng joins Amazon's SB, replacing ex-MTV CEO Judy McGrath. It underscores that the AI war has become primarily a battle for top talent, after Microsoft recently brought in former Google DeepMind founder Mustafa Suleyman. This makes Google the loser of the week right away, as it is notable that both ex-Googlers are now with AI competitors Amazon and Microsoft.

In addition, it shows that Amazon places little value on someone with a media and marketing resume like McGrath, preferring instead to bring in top technical talent. The nerds are winning the war over the hip media kids.

Ng previously co-founded the Google Brain project and was chief technologist at Chinese Internet giant Baidu. His newsletter The Batch is highly recommended, and his presentations at TED and Stanford are also engaging for anyone interested in the potential impact of AI on society.

Ng has a gift for explaining complex topics like AI in a clear and understandable way. At his presentation last year in Singapore, I took pictures of almost every slide, no matter how ugly they were and in far too small font, because Ng knows how to visualize a lot of information in a very concise manner.

'For $699 and $24 a month, this wearable computer promises to free you from your smartphone. There’s only one problem: it just doesn’t work.'

The Verge wrote a heartfelt but scathing review of the AI pin I wrote about in November:

'The whole presentation video is interesting to watch, but perhaps not for the reasons the founders hope. First of all, I don't understand why you would buy a $699 device that can do little more than a smartphone, which everyone always carries with them and is not going to be replaced with an AI pin. To live stream with then, from your chest? That's mostly fun for self-loving mountain bikers and Hamas members.'

And now it turns out that thing doesn't even work, for seven hundred dollars plus monthly subscription. I also still don't believe in smart glasses like Meta's. I already have glasses and would prefer to get rid of them! I'd prefer tech companies to make my watch smarter, as a possible replacement for the smartphone.

Ken Kantzer is CTO of startup Truss and shared interesting experiences from working with ChatGPT on a large scale. One conclusion stood out, when testing all kinds of prompts: "Why is this crazy? Well, it’s crazy that GPT’s quality and generalization can improve when you’re more vague – this is a quintessential marker of higher-order delegation / thinking." Apparently, vague is good in AI.

"People are all meant to get along. Online text-only media have given us the delusion that people can't get along, but actually everyone gets along."

Thus Naval Ravikant, founder of Angellist, who started Airchat along with Tinder's Brian Norgard.

I haven't been able to try it out yet, but would love to hear reactions from people who are already Airchatting. I'm not a fan of the name, but anything is better than Air X or X Air.

In 1991, as a student internship, I wrote a business plan to start a weekly sports magazine called... Sportweek. Hey, you got it or you don't. Only one publisher in the Netherlands was remotely interested: Maarten van den Biggelaar, previously founder of popular Amsterdam student nightclub Dansen bij Jansen and founder of the business magazine Quote, a more elitist version of Fortune. After months of visiting media buyers and advertising agencies, it was clear: there was zero interest.

Disillusioned, I left to do a student exchange program in San Francisco, where I first stumbled on the Internet. Forget Philips, IBM or TNO: back in the Netherlands, Van den Biggelaar was the only one who recognized that the Internet would become a mass medium, and he became our first investor in Planet Internet, which became the biggest internet service provider and most popular website in the country - well, until this Google thing started, but by that time I had left.

High-speed trains are an excellent alternative to short-haul air travel; faster, cheaper and more sustainable. I wouldn't bet against him and think Van den Biggelaar is on the right track with this train plan - please excuse the pun, I couldn't resist. Oh, and Sportweek: a few journalists started a magazine with that name a few years later, apparently without first asking the advertising world about its appetite. It quickly went belly up.

Conan O'Brien came to Hot Ones with his own doctor, or was it his dealer?

Within two days, this video has already been viewed nearly five million times: comedian Conan O'Brien was a guest on the popular YouTube series Hot Ones, in which host Sean Evans and a guest eat chicken wings with increasingly hot sauces.

The trick lies in the combination of Evans' stunningly good preparation, with the utter despair of his guests who find it hard to keep up their PR talk under the sweat and pain attacks. It's sort of a mirrored version of waterboarding.

At least, until O'Brien was a guest Friday and even decided to drink from the hottest sauce bottles. Asked about his familiarity with spicy food, O'Brien replied in advance:

"I grew up in an Irish-Catholic family in Boston. I never saw herbs until I was about 52 years old."

Conan O'Brien

These are the 19 best episodes of Hot Ones: featuring Shaquille O'Neal, Margot Robbie, Gordon Ramsay and Billie Eilish, among others.

In conclusion

Music festival Coachella streams live from many stages from the California desert. Today is the final day with Doja Cat, among others. Enjoy!

Categories
AI crypto technology

Smart tips, tricks and hacks for a better life

Not what is meant by the Eisenhower Matrix, but I like it. Image created with Midjourney.

It's tempting to get swept up in news about gadgets, apps and gimmicks that the technology sector pours out on us daily. So this time we turn our gaze beyond the delusion of the day in search of insights that can improve our lives. With fewer links, but references to longer articles, videos and podcasts: in short, less to more. Starting with the most important problem: how do we spend more time on the important things and less time on nonsense?

On a typical workday, it can feel like everything needs to be done immediately. The Eisenhower matrix helps us categorize the onslaught by organizing tasks by importance and urgency. If revisited regularly, the matrix can help us clarify our goals and values as well as how we should spend our most valuable resource — time. President Eisenhower never seems to have literally phrased it that way, but this way of thinking named after him leads to very effective productivity gains. A real productivity hack, in millennium speak.

Laugh and learn about tech

The mainstream media, even the comedy shows, have discovered technology as a subject on which there is much to report and, not insignificantly in the era when Google and Meta are gobbling up hundreds of billions of advertising money worldwide that used to be reserved for media companies; it's clicking like crazy. The Daily Show (Comedy Central) and Last Week Tonight (HBO) devoted extensive airtime this week to the impact of technology on our lives. With relevant warnings and tips.

Jon Stewart is back on Monday night on the Daily Show, tackling the AI revolution. Not so much the technology as the annoying habit of tech leaders to promise everyone a better future, while at the same time building technology that plays a major role in our lives in an opaque way.

Watching the item one wonders if the gentlemen at the top of the tech companies would pass the neighbor test: would you appreciate it if this guy (Zuckerberg, Altman, Pichai) moved in next door?

John Oliver describes meal delivery services as "the milennial lifestyle subsidy." He rightly concludes that many restaurants and delivery drivers suffer because of the delivery services, which nevertheless barely make a profit. So who wins? The consumer, but there are raw edges to that victory. Something to think about when the next delivery guy is at the door. Oliver calls for a five-star rating by default, including a nice tip.

Elad Gil may not be a familiar name but he has invested in and advised over forty unicorns, companies with a market value of over a billion dollars, including Airbnb, Coinbase, Pinterest and Stripe. In this video, Gil provides insight into his method of analysis from which we can all learn something.

Writing is better than talking

Stewart, Oliver and Gil clearly have a knack for conveying their opinions on complex topics simply and clearly to the public. The Basecamp software creators shared in a blog post how they "keep everyone in the company informed, without interfering with everyone else."

It's a long piece, but worth reading, especially if you're working with people in different locations. Things I take from it: writing beats talking and asynchronous communication (not live) is more effective than live.

Those who follow the advice and write more while working than talking will benefit greatly from these tips for editing yourself. Everyone has a colleague, especially a manager, who should follow these tips.

GaryVee deserves all the attention

This newsletter also appears in English on LinkedIn, and the gifted conversationalist Gary Vaynerchuk explains in his podcast why LinkedIn is crucial for your organization in 2024. Vaynerchuk struggled to finish high school and then worked in his father's liquor store, where he began making videos about wine that he posted on a then-unknown site: YouTube.

That experience formed the basis for a lightning career as a marketing guru, after which Vaynerchuk revealed himself as a successful investor (Facebook, Twitter and Uber, among others) and a kind of life coach avant la lettre. The writings of "GaryVee" sometimes seem clichéd but are actually thought-through, on any medium. Especially in the US, a cry like "how you make your money is more important than how much you make" is an extraordinary thought, especially as the son of poor immigrants from Belarus.

Learning from failure

Sometimes you learn more from a blunder than a success, which is why this article about how Hertz blundered with its transition to electric cars is downright fascinating. Customers barely charged cars after use, leaving too few available, and in addition, Tesla cars were found to be as much as four times more likely to be involved in accidents than traditional cars running on dinosaur blood.

When everything goes wrong, this is the article to have around. Useful in times with more extreme weather and for me, living in an area of Asia with several possible natural disasters, it's useful advice to keep the go bag better packed with practical tech gadgets.

Spotlight 9: warranty until the corner!

To my no small shock, a reader reported yesterday that she was disappointed "in my tip to buy Snowflake stock, as it had fallen significantly." Therefore, I want to emphasize again that I do not give investment advice.

Reader in question turned out to have purchased my entire AI Spotlight 9. When I came up with that completely arbitrary AI index, I wrote the following:

"These companies are either a driver of AI developments like Nvidia and Super Micro, or a big 'profiteer' of AI technology, think Palantir and Snowflake, for example. AMD, Broadcom, Crowdstrike, Gigabyte, Microsoft, Nvidia, Palantir, Snowflake and Super Micro were up an average of 48% this year already!

Note: I do not give investment advice, I just try to follow developments and if I'm feeling bright eyed and bushy tailed on Sunday morning, I interpret them as well. These are emphatically not buying recommendations. So much for my public service announcements."

Incidentally, the rest of these stocks appeared to have outperformed the Nasdaq Composite and the S&P 500, but again, think of it as a match analysis of a football game. If I were to write that a certain wide receiver scores remarkably easily, that is not an incentive for any team to go out and buy that player. Please only invest with money you don't need to live on and realize that you can lose on investments. And never listen to me.

Notable: Ethereum was a better investment than Nvidia

Every day I am bombarded with questions about crypto and tech stocks, whether Solana is better than Ethereum and which memecoins I hold myself. Precisely because people tend to blame you when something goes down, and congratulate themselves every time something goes up, I never respond to these questions.

I am, however, working with a friend to create a sort of investment section where people can follow our investment portfolios, but like this newsletter, we will do so "for the sake of learning and entertainment" and not as investment advice. (By the way, I am curious to see how Weglot, the translation module I use, will translate the last sentence).

That being said, Grandpa Frackers especially wants to point young readers like my smart nephews to the performance of the biggest crypto versus the biggest tech stocks in the world over the last five years.

Even Nvidia stock, the absolute smoking hot stock among tech companies, has underperformed Ethereum. I don't know anyone who predicted in 2019 that Ethereum and Nvidia would dominate this list, so what lesson can be drawn from this? In any case, not that ETH and NVDA will experience the same rise in the coming years.

The mistake often made is trying to predict the future based on the past. I used to get the comment in the 1980s as a water sports reporter (water both in liquid and frozen form), 'Who does snowboarding? Nobody knows about that weird gadget, people like skiing.'

In the 1990s I started as an Internet entrepreneur and for five years I heard, 'Who has a computer and what do you want with the Internet? You can already fax.' I had to listen to the same rant from small minds about cell phones ('only drug dealers use cell phones') and for the last ten years about crypto: 'what can you buy with crypto?'

So once and for all: the average person does not need to buy anything with crypto. Just as the average person does not throw an Nvidia Hopper GPU into their basket at the super market on Saturday afternoon.

But those who can withstand the delusion of the day and have a slightly longer investment horizon than the next summer vacation, are not shocked by a downturn more or less like last week.

I am convinced that in the long run, and I mean years and not weeks or months, Bitcoin, Ethereum and Solana are lucrative investments. Just as I expect Microsoft, Apple and Nvidia to remain solid investments. The main question is which other crypto and tech companies will break through in the next five years. To that end, before you invest with your wallet, I recommend investing in lots of reading and listening. And not to base your investments on solicited or unsolicited advice from others.

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AI crypto NFTs technology

Nvidia the world's most valuable company? And Ethereum goes after Bitcoin

'Often something has to happen before something happens.' It's one of my favorite quotes from legendary soccer player Johan Cruijff. I was reminded of it when last week stock market analysts, a profession with the same social utility as palm readers, predicted that Nvidia could overtake Apple and Microsoft as the world's most valuable company this very year. Without analysis of why and how this is possible, it is scoreboard journalism of the worst kind. Bitcoin's huge price rise to its highest level ever, of course, is preferably hushed up by most stock market analysts because they spent years trashing crypto. Whereas the price of Bitcoin is based solely on supply and demand, with no underlying products like Nvidia. Seems a lot easier to analyze. Yet most analysts remain silent. Coincidence? No, because coincidence is logical, Cruijff also said.

In a half-baked attempt at self-analysis, I looked up what I myself have written about Apple, Microsoft and Nvidia since I started this newsletter a year ago. Along with OpenAI, maker of the revolutionary ChatGPT, they are the only companies I have discussed more than 30 times.

Nvidia is more than hardware

Looking back, it is clear that I myself struggled to understand what the advantage Nvidia has built up; for the gap with the competition is caused by much more than just the production of very fast processors, the Graphics Processing Unit (GPUs) that are the engine block of AI software.

This newsletter is too short and I lack the technical expertise to go deep into the "software shell" that Nvidia has almost secretly erected around its hardware, making it more complex than it seems for customers to achieve the same results with other vendors' equipment. But it is useful to keep in mind that Nvidia has successfully built a defensible moat around its core business, when yet another analyst swears that Google, Microsoft and Amazon will deliver similar performance to Nvidia within a few years.

Because besides designing and delivering performance in a lab, these types of AI applications have to be tested in the real world for all sorts of different types of applications, followed by optimization (I don't think it's a Mulisch-esque argument myself, but stay with me) and finally a chip manufacturer still has to know how to produce the GPUs in volume and how to support them after the initial sale. That producing, selling and supporting may be harder than designing. I am also a very good singer in principle, but in practice my dog runs away after hearing three notes.

Every day, Nvidia increases its knowledge advantage because it has been working with all these AI customers for years. While Google, Microsoft and Amazon are still on the user side. It's like being a customer at the bakery who decides one day to start a bakery himself. Then the business plan and recipes are not the parts that make the difference either: the crux is in making and selling, which is true in baking croissants and in baking computer chips.

The stock price performance of Nvidia, Apple and Microsoft in the last 365 days.
 

Conclusion: Nvidia has a good chance of adding another trillion in market value within a year and dethroning first Apple and then Microsoft as the world's most valuable company. A position it will then be able to hold for some time. Once Nvidia has surpassed Apple and Microsoft in terms of company value, only then will the general public (and thus most of the media and politicians) begin to understand that a social breakthrough has occurred.

I am not claiming, as is sometimes suggested, that AI is a breakthrough comparable to the invention of the steam engine. That was the case with the invention of the personal computer combined with the Internet, which transitioned much of the world from the industrial to the digital age. There is a significant chance that mass adoption of AI applications will have the same impact on society as, at one point in time, the introduction of the assembly line. In other words, higher labor productivity coupled with fewer process jobs, fewer work hours and shorter work weeks for most desk jockeys. The question is whether average wages will be maintained, or whether higher corporate profits will prevail.

AI in the retirement home

The applications of AI extend much further than initially thought. Obviously, many administrative functions, in fact all process-based functions involving estimation based on existing data, will be replaced by AI. That stuffy insurance salesman who comes by at night after dinner in his ill-fitting suit with questionable tie can do a worse job of interpreting what the customer's requirements are than an AI application that stores all current policies and all claims for the last 50 years.

It recalls the breakthrough of the World Wide Web in 1993 after the launch of the Mosaic browser as well as the period 15 years ago, after the first iPhones and Android phones were introduced. The last two innovations, smartphones and the Internet, are the enabler for today's technological revolution, because that is what we should call AI by now. Just as a mobile app was developed for everything back then, now efforts are being made to incorporate AI into everything.

There sits Grandma, in a home with an AI doll on her lap.
 

A few remarkable innovations were presented at MWC in Barcelona, with AI-powered dolls for the elderly making an indelible impression on many visitors. Who thinks $3,500 for an Apple Vision Pro is not expensive, will surely buy a $1,800 Hyodol for grandma? Seems absurd, but the AI bot in the form of a six-year-old child proved more effective at reminding the elderly to take a pill, keep moving and turn off the stove in Korea.

Innovating is difficult for everyone

Most AI innovations will fail, as most attempts at innovation fail in general. Apple luckily finally stopped developing its own car and is writing off the $10 billion invested as a rounding error. The world had absolutely no need for a new electric car manufacturer. It will be interesting to see if Apple manages to incorporate AI in a useful way into the company's biggest money maker: the iPhone.

There is a lot of talk that Google has completely lost the plot in AI, but that is nonsense. In terms of product, Google has made great strides and Google Gemini was a giant leap. Only Google's corporate culture is proving  a debilitating hurdle in developing breakthrough innovations, as I described the last two weeks.

David Kiferbaum left Google and wrote a truly painful account of what it's like to work in an environment where political correctness is preferred to factual correctness. Recommended reading: How Google blew up. (By the way, Kiferbaum's LinkedIn shows that he also worked for a while at Morrison & Foerster, the law firm with the most apt URL ever for a law firm: mofo.com)

Spotlight 9? Two Spotlights: Bitcoin and Ethereum

It was déjà vu, all over again, as Yogi Berra once said: Bitcoin reached a new record high and then a harsh correction followed.

Bitcoin and Ethereum stand out; Ethereum also headed for a record

Then the most frequently asked question on Whatsapp, during birthdays and after kids' soccer games was: is it too late to get into crypto?

I do not think it is too late to get in and that we are just at the beginning of mass adoption. Again, I echo the advice from 2017, which is a few hype cycles ago, from legendary investor Fred Wilson (Twitter, Tumblr, Zynga, Etsy, Coinbase etc), which he gave based on the investor's profile:

  • young, aggressive risk taker - 10% of net assets in crypto
  • sophisticated investor looking for a high-performing portfolio - 5% of net assets in crypto
  • average investor, somewhat conservative, but with some appetite for risk - 3% of net assets in crypto
  • retiree who wants to maintain portfolio value and generate income - 0% of net assets in crypto

A detailed, careful and at the same time confusing typology. After all, some elderly people may very well be able to absorb a kick where it hurts, because their house is already paid off and they have zero debt. While many young, aggressive risk-takers must sell their textbooks and become Uber drivers or start an Only Fans as they watch their memecoins evaporate.

Because I don't know any young aggressive knuckleheads who manage to limit their crypto gambling to 10% of their net worth, as Wilson advises. Around me I see young people more likely to put 90% of their money into crypto, but that may be a genetic defect in my family. More research is needed on women's investment decisions; are there still fewer women than men in crypto, or are women smarter because they are quieter about it?

How much and in which crypto?

When people ask me how much to invest in crypto, which has been a daily occurrence again since the beginning of this year, I always answer with a counter-question: can you stand to see everything you put into crypto go up in smoke? Evaporate to nothing? And just as important: will you get into a fight with your partner if you lose everything?

The couple lunatics go-getters who then remain always ask the same follow-up question, "which crypto should I buy? To that question, too, Fred Wilson was kind enough reply:

"A diverse set of crypto-assets would include Bitcoin, Ethereum, the other major layer-one blockchains (Solana, Flow, Avalanche, Polkadot, Algorand, etc.), the major DeFi protocols (Uniswap, Aave, Compound, etc.), storage protocols (Filecoin, Arweave, etc.), telecommunications protocols (such as Helium), some layer-two protocols (such as Stacks, Polygon, etc.), some gaming assets (such as Axie, Decentraland, etc.) and maybe some NFTs."

Do I follow Wilson's advice myself? No.

The difference in value

I have been convinced for years that "something enormous" will come out of blockchain innovations. Decentralization and transparency bring an intrinsic new value that cannot be realized in other ways. Unfortunately, it will take longer than I had hoped until a widely accessible application based on blockchain technology becomes available that is relevant to a large audience. Call it the ChatGPT of blockchain, that is what we are waiting for. Such an application would be of great social value.

I believe strongly in the crypto market, but I don't have the chutzpah (anymore) to think I can pick the winners. This has proven difficult with every disruptive advance in technology. The challenge is to identify potential winners early. From that follows a financial value of an innovation; incredibly fascinating, but less interesting to me personally. Before you know it, you spend hours musing about peaks, valleys and candles, without yet knowing what application it is actually about.

Obviously, every investor wants to achieve the highest possible returns with the lowest possible risk, so maybe I should create an investment portfolio myself that is trackable on a weekly basis. I would love to hear via email, LinkedIn or X if you would find such a portfolio interesting. Anyway, all tips, comments and reactions are very welcome.

Enjoy your Sunday, see you next week!