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AI crypto NFTs technology

Nvidia the world's most valuable company? And Ethereum follows 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 in the evening 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!

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AI crypto technology

Google in total panic by OpenAI, fakes AI demo

At last, Google's response to ChatGPT's OpenAI appeared this week, highlighted by a video of Gemini, the intended OpenAI killer. The response was moderately positive; until Friday, when it was revealed that Google had manipulated some crucial segments of the introductory video. The subsequent reactions were scathing.

Google makes a video, fake 1. Er, take 1. (Image created with Dall-E)

Google was showered with scorn and the first lawsuits should be imminent. A publicly traded company cannot randomly provide misinformation that could affect its stock price. Google is clearly in panic and feels attacked by OpenAI at the heart of the company: making information accessible.

Google under great pressure

It was bound to happen. CEO Sundar Pichai of Alphabet Inc, Google's parent company, went viral earlier this year with this brilliant montage of his speech at the Google I/O event in which he uttered the word AI no less than twenty-three times in fifteen minutes. The entire event lasted two hours, during which the term AI fell over one hundred and forty times. The message was clear: Google sees AI as an elementary technology.

Meanwhile, Google's AI service Bard continued to fall short of market leader OpenAI's ChatGPT in every way. Then when Microsoft continued to invest in OpenAI, running up the investment tab to a whopping $13 billion while OpenAI casually reported that it was on its way to annual sales of more than a billion dollars, all alarm bells went off at Google.

The two departments working on AI at Google, called DeepMind and Google Brain - there was clearly no shortage of self-confidence among the chief nerds - were forced to merge and this combined brain power should have culminated in the ultimate answer to ChatGPT, codenamed Gemini. With no less than seventeen(!) videos, Google introduced this intended ChatGPT killer.

Fake Google video

Wharton professor Ethan Mollick soon expressed doubts about the quality of Gemini. Bloomberg journalist Parmy Olson also smelled something fishy and published a thorough analysis.

The challenged Gemini video

Watch this clip from Gemini's now infamous introduction video, in which Gemini seems to know which cup to lift. Moments later, Gemini seems even more intelligent, as it immediately recognizes "rock, paper, scissors" when someone makes hand gestures. Unfortunately, this turns out to be total nonsense.

This is how Gemini was trained in reality. Totally different than the video makes it appear.

Although a blog post explained how the fascinating video was put together, hardly anyone who watched the YouTube video will click through to that apparently accompanying explanation. It appears from the blog post that Gemini was informed via a text prompt that it is a game, with the clue: "Hint: it's a game."

This undermines the whole "wow effect" of the video. The fascination we initially have as viewers has its roots in our hope that a computer will one day truly understand us; as humans, with our own form of communication, without a mouse or keyboard. What Gemini does may still be mind-blowing, but it does not conform to the expectation that was raised in the video.

It's like having a date arranged for you with that very famous Cindy, that American icon of the 1990s, and as you're all dressed up in your lucky sweater waiting for Cindy Crawford, it's Cindy Lauper who slides in across from you. It's awesome and cozy and sure you take that selfie together, but it's still different.

The line between exaggeration and fraud

The BBC analyzed another moment in the video that seriously violates the truth:

"At one point, the user (the Google employee) places down a world map and asks the AI,"Based on what you see, come up with a game idea ... and use emojis." The AI responds by seemingly inventing a game called "guess the country," in which it gives clues, such as a kangaroo and koala, and responds to a correct guess by the user pointing to a country, in this case Australia.

But in reality, according to Google's blog post, Gemini did not invent this game at all. Instead, the following instructions were given to the AI: "Let's play a game. Think of a country and give me a clue. The clue must be specific enough that there is only one correct country. I will try to point to the country on a map," the instructions read.

That is not the same as claiming that the AI invented the game. Google's AI model is impressive regardless of its use of still images and text-based prompts - but those facts mean that its capabilities are very similar to those of OpenAI's GPT-4.'

With that typical British understatement, the BBC disqualifies the PR circus that Google tried to set up. Google's intention was to give OpenAI a huge blow, but in reality Google shot itself in the foot. Several Google employees expressed their displeasure on internal forums. That's not helpful for Google in the job market competition for AI talent.

Because in these very weeks when OpenAI appeared to be even worse run than an amateur soccer club, Google could have made the difference by offering calm, considerate and, above all, factual information through Gemini.

Trust in Google damaged

Instead, it launched a desperate attack. I'm frankly disappointed that Google faked such an intricate video, when to the simple question "give me a six-letter French word," Gemini still answers with "amour, the French word for love. That's five letters, Gemini.

The brains at Google who fed Gemini with data have apparently rarely been to France, or they could have given the correct answer: 'putain, the French word for any situation.'

Google's brand equity and market leadership are based on the trust and credibility it has built by trying to honestly provide answers to our search questions. The company whose mission is to organize the world's information and make it universally accessible, needs to be much more careful about how it tries to unlock that information.

Techcrunch sums it up succinctly, "Google's new Gemini AI model is getting a mixed reception after its big debut yesterday, but users may have less confidence in the company's technology or integrity after finding out that Gemini's most impressive demo was largely staged."

Right now, Google is still playing cute with rock-paper-scissors, but once Gemini is fully available it is expected to provide relevant answers to questions such as, I'll name a few, who can legitimately claim Gaza, Crimea or the South China Sea. After this week, who has confidence that Gemini can provide meaningful answers to these questions?

Hey Google, you're on the front page of the newspaper. True story (Image created with Dall-E).

How many billion ican OpenAI snatch rom Google?

The reason Google is reacting so desperately to the success of OpenAI is obviously because it feels it is being threatened there were it hurts: the crown jewels. In the third quarter of 2023, Alphabet Inc. the parent company of Google reported total revenue of seventy-seven billion dollars.

A whopping 78% of that was generated from Google's advertising business, which amounts to nearly sixty billion dollars. Note: in one quarter. Google sells close to seven hundred million dollars in advertising per day and is on track to rake in thirty million dollars - per hour.

ChatGPT reached over a hundred million users within two months of its launch, and it is not inconceivable that OpenAI will halve Google's reach with ChatGPT within a few years. Everyone I know who uses ChatGPT, especially those with paid subscriptions, of which there are already millions of users, says they already rarely use Google.

Google has far more reach than it can sell so decrease in reach does not equate to a proportional decrease in revenue; but it is only a matter of time before ChatGPT manages to link a good form of advertising to the specific search queries. I mean: there's a company that makes millions per hour selling blue links above answers...

Falling stock market value means exodus of talent

Google could then quickly drop from being one of the world's most valuable companies with a market capitalization of $1.7 trillion (1,700 billion) to, say, half - and then be worth about as much as Google's hated, loathed competitor in the advertising market: Meta, the creator of in Google's eyes simple, tacky social media like Facebook, Instagram and Whatsapp. Oh, the horror.

This is especially important because in this scenario, the workforce, which in the tech sector never perks up from declines in the value of their options, is much more likely to move to companies that do rapidly increase in value. Such as OpenAI, the maker of ChatGPT.

Spotlight 9: the most hated stock market rally

'The most hated rally,' says Meltem Demirors: the rise of Bitcoin and Ethereum continues.

'The most hated rally,' is how crypto oracle Meltem Demirors aptly describes the situation in the crypto sector. ' Everyone is tired of hearing about crypto, but baby, we're back!'

After all the scandals in the crypto sector, the resignation of Binance CEO Changpeng Zhao, CZ for people who want to pretend they used to play in the sandbox with him, seems to have been the signal to push the market upward. I wrote last March about the problems at Binance in meeting the most basic forms of compliance.

According to Demirors, macroeconomic factors play a bigger role, such as expected interest rate declines and the rising U.S. budget deficit. The possible adoption of Bitcoin ETFs is already priced in and the wait is on for institutional investors to get into crypto. Consumers already seem to be slowly returning. Crypto investors, meanwhile, seem more likely to hold Ethereum alongside Bitcoin.

Investing and giving birth

I continue to be confirmed in my conviction that professional investors understand as much about technology as men understand about childbirth: of course there are difficult studies and wonderful theoretical reflections on it, but from what I hear from experts in the field of childbirth (mothers) it turns out to be a crucial difference whether you are standing next to a delivery, puffing along, or bringing new life into this world yourself. There is a similar difference in investing in technology or developing it.

I don't think there is a person working in the tech sector who, after reading through the reactions to Google's Gemini announcement, thought, "that looks great, I need to buy some Alphabet shares soon.

But what did Reuters report, almost cheerfully: "Alphabet shares ended 5.3% higher Thursday, as Wall Street cheers the arrival of Gemini, saying the new artificial intelligence model could help close the gap in the race with Microsoft-backed OpenAI."

Ken Mahoney, CEO of Mahoney Asset Management (I detect a family relationship) said "There are different ways to grow your business, but one of the best ways is with the same customer base by giving them more solutions or more offers and that's what I believe this (Gemini) is doing for Google."

The problem with people who believe something is that they often do so without any factual basis. By the way, Bitcoin and Ethereum rose more than Alphabet (Google) last week.

Other short news

The Morin and Lessin couples are journalists, entrepreneurs and investors, making them a living reflection of the Silicon Valley tech ecosystem.

Together they make an interesting podcast that this week includes a discussion of Google's Gemini and the crypto rally.

It's great that Google founder Sergey Brin is back to programming at Google out of pure passion. The Wall Street Journal caught onto it this summer. Curious what Brin thinks of the marketing efforts of Gemini, which he himself is working on.

Elon Musk's AI company, x.AI, is looking for some start-up capital and with a billion, they can at least keep going for a few months. Which does immediately raise the question of why Musk accepts outside meddling and doesn't take the round himself. Perhaps he already expects to have to make a substantial contribution to x.com, the former Twitter.

Mistral, the French AI hope in difficult days for the European tech scene, didn't make a video, not even a whitepaper or blog post, but it linked in a tweet to a torrent file of their new model, attractively named MoE 8x7B. It made one humorous Twitter user sigh "wait you guys are doing it wrong, you should only publish a blog post, without a model." It will be a while before people stop taking aim like this at Google. Anyway, as far as I'm concerned, only amour for Mistral.

Details should become clear in the coming days, but the fact that Amnesty International is already protesting because of the lack of a ban on facial recognition is worrying. EU Commissioner Breton believes this puts Europe at the forefront of AI and therefore he would likely thrive as a tech investor on Wall Street.

CFO Paul Vogel got kicked while he was already down: "Spotify CEO Daniel Ek said the decision was made because Vogel did not have the experience needed to both expand the company and meet market expectations." Vogel was not available for comment but still sold over $9 million worth of options. It remains difficult to build a stable business as an intermediary of other people's media.

Apparently, MBS is an avid gamer. After soccer and golf, Saudi Arabia is now plunging into online gaming and e-sports.

I hold out hope that AI will be used in medical technology, to more quickly detect diseases, make diagnoses or develop treatments. But right now, the smartest kids in the class seem focused on developing AI videos that mimic the dances of real people on TikTok.

Where are the female automotive designers? 'Perhaps the way forward in the automotive industry lies neither with the feminine (the unwritten page) nor the masculine (full steam ahead), but somewhere in the middle that combines the practical and the poetic, with or without a ponytail,' according to Wired.

Categories
AI crypto NFTs technology

Build your own ChatGPT, an ex-Apple couple builds an AI pin and Ethereum through $2,000

Last week was busy and filled with travel days, so I was unable to follow the news closely. Instead, I saved interesting links and perused them yesterday. It is amazing to see all that is happening in technology in one week, especially within AI and crypto.

I have tried to briefly summarize and comment on the most noteworthy developments. I hope it has not become too much of a shopping list of links:

OpenAI launches DIY GPT

OpenAI allows developers and ordinary people to share custom chatbots with the public through a "GPT Store," a proprietary app store where verified developers can upload their chatbots and make them available for users to download. In the coming months, developers will also be able to earn money based on how many people use their chatbot.

Venture Beat published a sort of match report from OpenAI's Developer Day, but the five examples of what is already being built with ChatGPT custom and the instruction on how to use GPT Builder are more relevant.

AI is an arms race and the generals are getting rich

OpenAI is paying $10 million to AI researchers by holding an employee stock sale that would nearly triple the startup's valuation to more than $80 billion. The company's recruiters are trying to lure away top artificial intelligence professionals from Google with millions of dollars and a simple message: join OpenAI now to lock in a stock package at the current valuation of $27 billion and benefit from the impending increase.
 

This is a brave new world, because until now companies like Google and Apple were able to snatch talent away from startups by offering them an offer they couldn't refuse through a combination of guaranteed top salary (think four years guaranteed at $3 million) plus a minimum equivalent equity package. OpenAI now benefits from the fact that its valuation is rising much quicker than the market caps of Apple and Google.

By allowing new private investors to buy a portion of employees' stock, they can benefit from the increase in value much faster than in the traditional model where they have to wait for an IPO and subsequent lock up period. It is good to keep in mind that when Facebook went public in 2012, its market cap was similar to that of OpenAI today. Except that OpenAI is not expected to go public anytime soon.

It won't keep raining billions in the AI sector for long

OpenAI's stratospheric valuation will be of great concern to investors in independent competitors such as Anthropic (maker of Claude) and Inflection.ai (maker of chatbot Pi). The market for applications like OpenAI's ChatGPT is very similar to the search engine market, in which Google has over 80% market share and the number two, Bing, less than 10%.

That makes it very risky for investors to invest in Anthropic and Inflection at valuations above roughly $5 billion, because the numbers two and three always get a lower valuation per customer or per dollar of revenue than the market leader. A thinning of the field of AI developers within a year therefore seems logical.

A camera, no screen: the 'pin' of Humane. Source: Humane website.

AI pin of a quarter of a billion

That said, this week's big news is undeniably that Humane, the company of former Apple employees Bethany Bongiorno and Imran Chaudhri, described by The Wall Street Journal as "spouses and co-founders" who have already raised nearly a quarter of a billion (!) dollars in investment money, launched its first product: the Ai pin, or artificial intelligence pin, which you are supposed to wear on your clothes.

The pin weighs 55 grams (two ounces), about the weight of a tennis ball, is controlled by your voice to make phone calls and look up data (in OpenAI, of course, by Sam Altman, also one of the investors in Humane) and stands out mainly because it includes a camera to take pictures, but no screen to read anything from.

Ars Technica doesn't like it: "The Human AI Pin is a bizarre cross between Google Glass and a pager. The Human AI Pin has no screen, no apps, and a creepy in-your-face camera." The laser projection, which allows you to project information onto your hand, is appreciated but seemingly more because of its high James Bond vibe. The lack of an app store for third-party apps is rightly seen as a major omission.
Ars Technica continues: "It’s also too early to tell whether Humane’s hope that the Pin can help people to live more in the moment will prove true, or whether it will simply provide a new way to be unhealthily obsessed with technology."

The entire 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 by an AI pin. To live stream with perhaps, from your chest? I don't see that market to become huge anytime soon.

Battery = perpetual power system?

Besides, I always get a serious itch from slogans and marketing-speak that make no sense. The pin's replaceable battery is called in Human terms a "perpetual power system" and the orange light that indicates the camera is on is a "trust light. That's like buying a gold fish and naming it Jaws.

What I can greatly appreciate, however, is the straight face of Imran Chaudhri with which he presents his devices. He and Ms. Bongiorno do not have a good morning at all, but look like they are delivering a eulogy at the funeral of a beloved relative. This is so much nicer than those pumped-up marketing figures who coo "we are so excited" when announcing a new printer driver.

I also like that Mr. Chaudhri is humble enough to function as a "second-in-command" under his wife Ms. Bongiorno, the CEO. But I don't like it enough to buy an Ai pin anytime soon.

Spotlight 9: BlackRock believes in Ethereum

This is what happens when BlackRock, the world's largest asset manager, sets its sights on Ethereum.

I have often written enthusiastically about Ethereum, the most popular development platform for blockchain applications, incidentally also adorned with a wonderful slogan: "Ethereum, the world's computer. But because it is not entirely clear what the total number of ETH in circulation will be, one can have doubts about Ethereum as an investment. Function and value are often not connected. Consider the value of tap water (and in developed nations, potable tap water) to our lives and the low price we pay for it.

The unsurpassed Meltem Demirors explained on CNBC why Bitcoin's share price continued to rise and ETH jumped over 10% this week. The news that BlackRock plans to introduce an ETF (Exchange Traded Fund) for Bitcoin in addition to one for Ethereum is a huge catalyst for the end of the crypto winter.

A BlackRock ETF for Bitcoin and Ethereum, subject to SEC approval of course, offers investors a more accessible and potentially safer way to invest in cryptocurrencies without the technical complexities of buying, storing and managing cryptocurrencies directly. Purchases are made like a normal stock on a conventional exchange, with the underlying management and security of the digital currencies provided by BlackRock.

it's easy to forget how big BlackRock is because the nearly $10 trillion under management is an incomprehensible large number. But $10 trillion is ten thousand times a billion(!). Once BlackRock can offer Bitcoin and Ethereum to its clients and even only 1% goes into crypto, that would already mean almost 10% additional capital in the crypto market immediately.

Other short news

Whatever happened to NFTs?

The BBC almost gloats over the collapse of the NFT market and does report that Bitcoin is down about 50% compared to its peak, without mentioning that Bitcoin is up a whopping 880% compared to five years ago. Ethereum's 1762% rise in the last five years is not mentioned at all. Mediocre journalism.

Investor Ben Evans is not a fan of Elon Musk

Ben Evans, in his excellent newsletter on the demise of Twitter under the reign of Elon Musk, writes this wonderful sentence: "It turns out that social networks are harder than rocket science."

Chinese startup quickly stockpiled Nvidia chips

Just before the US export ban, the Chinese company 01.AI quickly purchased chips from Nvidia for a year and a half. CEO Kai-Fu Lee laments the trade war: "We will have two parallel universes. Americans will supply their products and technologies to the U.S. and other countries, and Chinese companies will build for China and whoever uses Chinese products. The reality is that they will not compete very much in the same market."

Google about to invest in AI startup Character.ai

Google is in talks to invest hundreds of millions of dollars in Character.AI, as the fast-growing ai-chatbot startup seeks capital to train models and keep up with user demand, according to Reuters. I doubt that user demand, because I don't see so many people eager to engage in a conversation with a fake psychologist or banana chatbot.

WeWork bankrupt

I never understood why a landlord of overly trendy, expensive office space would be worth $50 billion. Apparently most people agreed.

Skiing gets more dangerous, but technology helps

Climate change increases the risk of avalanches, but smart techniques like patrolling drones help keep it safe.

Categories
AI crypto NFTs technology

Ex-Google CEO Eric Schmidt is the man behind the biggest AI companies

It seemed like a quiet week on the technology front, until everything happened in the last few days. Former Google CEO Eric Schmidt announced a new nonprofit organization that hopes to solve the biggest scientific problems with AI, the stock price of Europe's fintech darling Adyen collapsed, crypto also took hits with a sharp drop in Bitcoin and XRP, a lawsuit was filed by disappointed Bored Ape NFT buyers against auction house Sotheby's and the fund with Arab oil billionaires makes $8 billion in profits on ... computer chips. At the last minute, a car from Croatia broke Tesla's records.

Bored Apes prices have dropped below $50,000, but readers of my newsletter can have this Midjourney-created sad ape for free.

Using AI to save the world?

Former Google CEO Eric Schmidt is building an ambitious new nonprofit organization to tackle major scientific challenges using artificial intelligence. Schmidt wants the new organization to attract top AI scientific talent to create breakthroughs in as many complex fields as possible, from drug discovery to materials science.

Schmidt unfolded his vision last month in an article in MIT Technology Review titled This is how AI will transform the way science gets done.

"With the advent of AI, science is about to become much more exciting - and in some ways unrecognizable. The reverberations of this shift will be felt far beyond the lab; it will affect us all," Schmidt wrote.

Previously, Schmidt invested in DeepMind (bought by Google), OpenAI, CloudMinds, Vicarious, Cogitai and Elemental Cognition. At least, so says the chatbot Pi from Inflection.ai, another AI company Schmidt invested in. Inflection.AI is a San Francisco startup that develops conversational AI chatbots. Two months ago, the company raised as much as $1.3 billion in a funding round led by Schmidt, Bill Gates and Nvidia.

Long list of Schmidt's AI investments

Pi forgot to mention Anthropic, SandboxAQ, Upstart, Rebellion Defense, Urban Engines and Mistral, which I wrote about earlier, so the old-fashioned overview on Crunchbase seems more complete. The various AI technologies these companies are developing include chatbots, quantum computing, cloud-based systems and AI that learns like humans learn. The applications of these technologies are diverse and far-reaching. They range from drug discovery and robotics to translation and personal assistants.

Schmidt has become the world's leading investor in AI, not shying away from investing in companies that are each other's direct competitors. This may yet lead to problematic situations in the future, but for now, no company seems to mind and his money, knowledge and network are welcome everywhere.

Nobody is always lucky, and Schmidt also suffered a personal setback in the outer category of "first world problems" this week, when it turned out that the superyacht Alfa Nero he thought he had snapped up back in June is still not released to him. Fortunately, Schmidt has another boat to get through the summer on, the nearly half-century-old converted icebreaker Legend. I don't know Schmidt personally, but have a soft spot for someone who converts a 1954 icebreaker.

Spotlight 9: Adyen, Bitcoin and XRP down, Nvidia rises again

I usually end my newsletter with a quick look at the major public tech assets that I believe most strongly influence the tech world, in a column for which ChatGPT coined the name Spotlight 9. The share price drop experienced by Adyen and the crypto world in recent days deserves more attention this time. Nvidia, maker of the chips needed to run AI applications optimally, on the other hand, is experiencing heyday with yet another billion-dollar order, this time from the Arab world.

Nvidia shares mostly seem to be moving in exactly the opposite direction from most tech stocks, which suffered from an overall market correction.

Adyen plummets due to slowing sales growth

What happened. Adyen's share price took a huge hit this week, falling about 39%. The Amsterdam-based company presented quarterly figures with an unexpected slowdown in revenue growth and a drop in profits, which led to a wave of selling of the stock by investors.

Adyen shares recorded a decline Friday for the sixth consecutive session, marking the longest downward trend since Sept. 1, 2022, according to Dow Jones Market Data. In these six days, the price plunged by more than 45%, the largest six-day drop ever in Adyen shares.

Adyen deserves credit for not taking part in all the rounds of layoffs in the tech world and even attracting over 500 new employees, whom it would probably normally have had a harder time bringing on board in a more competitive job market. Management chose the long term over the short term, and that is to be commended.

But in particular, the decline in growth in the world's largest market, the United States, is a bad sign. Competition in the U.S. (including Stripe, Braintree, Fiserv and PayPal) offers a similar service at a lower price, according to Adyen CEO Pieter van der Does, implying that Adyen will structurally lose either market share or part of its profit margin.

Adyen is named after the Surinamese word for "again," after the founders were previously successful with the payment company Bibit. Hopefully management will succeed in reviving a payment company again, in fact for a third time. Adyen, adyen!

After China, Nvidia also scores in the Arab world

Just last week I wrote about the billion-dollar order placed by the Chinese Internet giants with Nvidia; this week the Financial Times reported that the Saudi government, through the highly respected King Abdullah University of Science and Technology(Kaust), has purchased at least 3,000 Nvidia H100 chips, worth about $40,000 each, according to the Financial Times. In short, a $1.2 billion order.

The order size of the United Arab Emirates' order is not known exactly, but it is known that it involves "thousands" of Nvidia GPUs for its own open-source large language model, Falcon, developed at the state-owned Institute of Technological Innovation in Masdar City in Abu Dhabi. Together, these orders again mean several billion in revenue for Nvidia.

The question remains as to what margin Nvidia is making on the very expensive H100 chips, and a fascinating report appeared on Friday about this very subject , showing that Nvidia is making almost 1000% gross margin on the H100. It is notable that this article talks about a retail price per H100 of $25,000 to $30,000 while the FT calculates with the $40,000 common in the market.

In any case, this conclusion about Nvidia seems justified: 'with expectations of the AI accelerator market being worth around $150 billion by 2027, there's seemingly nothing else in the future but green.' It's simple, any AI player can't do without Nvidia's chips.

Bitcoin sensitive to something old-fashioned: rising interest rates

Bitcoin prices dropped suddenly late Thursday after reports of hundreds of millions in sales, causing carnage in the futures and spot markets.

Bitcoin fell 11%, but remains about 60% above where it started this year, beating other well-performing assets such as technology stocks. But a host of headwinds - from rising bond yields to regulatory pressure and economic weakness in China - are undermining the appeal of cryptocurrencies.

For example, XRP fell Friday for the fifth day, down 12%, as the U.S. Securities and Exchange Commission asked a federal judge for permission to appeal the ruling that Ripple Labs' XRP token is not subject to securities laws when sold to the general public. Despite the drop of as much as 20% this week, XRP is still posting nearly 53% gains this calendar year.

Notable links

I end this week with links to a few things that caught my eye, in no particular order.

Sotheby's sued by ape buyers

That's a headline no one could have imagined roughly three years ago. Buyers of Bored Ape NFTs are suing Sotheby's because, the argument goes, Sotheby's sale for $24 million of Bored Apes to FTX gave Bored Ape NFTs "an air of legitimacy."

Sotheby's allegedly said the buyer was a traditional collector rather than what later turned out to be a rogue crypto exchange, giving other buyers an overly rosy view of the demand for Bored Apes. Yet buyers of Bored Apes who now complain about the value resemble people who bought a ticket to the movie Titanic and complained afterwards that they already knew the ending.

#PrayforJustin

It is not to be expected that Justin Bieber would join the complainers, but very little fun has been had by the singer with his Bored Ape #3001. Bieber reportedly paid $1.3 million in ETH, but the monkey is currently worth only $39,000. Madonna and Steph Curry' s monkeys aren't doing much better. Fortunately, they can handle it.

Arm leads the way to stock market for Instacart and others

The Financial Times reports that some of Silicon Valley's largest private tech companies are dusting off long-delayed plans to take their shares public, with the upcoming IPO of chip designer Arm set to be a new gauge of market sentiment. Arm is expected to announce the IPO tomorrow, Monday, Aug. 21.

Instacart, software company Databricks and Socure, an identity verification startup, are among the other companies considered as candidates for an IPO, according to FT. Instacart's valuation is expected to be only a quarter of the valuation in its last private financing in 2021, which was around $40 billion.

It was announced yesterday that Softbank bought 25% of Arm shares from Vision Fund 1 at a valuation of $64 billion, roughly in the expected price range of the IPO. It is odd that such a large sale should occur just before the IPO, but Reuters reports the reason: the deal eliminates a possible dump of Arm shares after the IPO, as Vision Fund planned to monetize its stake soon after the IPO, while SoftBank has indicated it will remain a long-term strategic investor.

$8 billion profit

Softbank is actually buying back the shares, because in 2017 it sold these 25% shares of Arm for $8 billion to Vision Fund, whose major shareholders, the sovereign wealth funds of Saudi Arabia and Abu Dhabi, at a valuation of $64 billion, thus book a profit of no less than 100%: 25% of the shares for $16 billion minus the purchase price of $8 billion is still a pleasant $8 billion profit. The selling parties are the same countries that just placed the billion-dollar order with Nvidia, no doubt backed by their recent success with technology investments.

However, no one expects these IPOs to lead to a renewed bull market, but it does indicate that at least the stock market climate is not deteriorating further. So far this year, only $14 billion has been raised in IPOs on U.S. stock exchanges, compared with $241 billion currently in the record year 2021 for IPOs, according to data compiled by Bloomberg.

Food bank became tourist attraction

When a food bank is touted as a city's third tourist attraction, AI is quickly pointed to as the culprit. But the very "human surveillance" that compiles algorithmic content on MSN had somehow overlooked a list of tourist hotspots in which the food bank ranked number three. It is unclear how many tourists actually showed up at the food bank for a tour.

'You Should Kill Your Startup'

Couples Morin and Lessin's podcast "More or Less" discusses the biggest taboo in the startup world: when to give up and close the company. It's an unpopular topic and therefore deserves applause. It's not a podcast they recorded thinking "this one's going to be a hit".

Can't understand the dialogues on Netflix? You're not the only one.

Many people stream programs and movies with the subtitles always on - and not because it's cool, reports the New York Times. 'In big movie productions, professional sound mixers calibrate sound levels for traditional theaters with speaker systems that can deliver a wide range of sound, from spoken words to loud gunshots. But when you stream that content through an app on a TV, smartphone or tablet, the audio is "down-mixed" or compressed to send the sound through small, relatively weak speakers.

The solution: buy external speakers. For viewers on laptops or tablets, this is still the best test of various headphones showing that the most expensive models do not always offer the best sound.

The Rimac Nevera can go from 0 to 400 kilometers per hour and back to standstill in 24 seconds. Why, no one knows, but it's fun.

Marques Brownlee drove the fastest electric car in the world

The fastest electric car in the world comes from Zagreb, Croatia and is called the Rimac Nevera. The Nevera broke a special world record - the world record for breaking world records in one day (23). YouTuber Marques Brownlee drove the Nevera and this is what happened when he applied full throttle from a standstill.

The day before yesterday it was announced that the Rimac Nevera broke the Tesla Model S Plaid Track Pack electric car lap record at the legendary Nürburgring by a whopping 20 seconds. The Nevera's performance is downright absurd. The motors generate 1.4 megawatts of power, or 1914 horsepower and a whopping 2360 Newton meters of torque. The Dutchman in me is now thinking: what a big caravan could fit behind that! The Nevera accelerates from 0 to 100 kilometers per hour in just 1.74 seconds and has a top speed of 412 km/h. Can't get any faster, you'd think....

Car on dinosaur blood faster after all

How can a "regular" hybrid car with almost 900 HP less, which houses not only an electric motor but also an old-fashioned internal combustion engine running on dinosaur blood, the Mercedes-AMG ONE, still be 25 seconds faster than the Rimac Nevera? The answer is simple: cornering.

Every electric car owner does what Brownlee did in the video, which is press the gas pedal on a straight road. But the Nordschleife has 73 corners and the Nevera weighs 2150 kilograms, while the Mercedes-AMG ONE weighs "only" 1695 kilograms. Combined with the particularly efficient downforce (downward aerodynamic pressure) of the AMG ONE, ironically a quality that Mercedes' Formula One car has lacked for two years, the Nevera is simply too slow in the corners. Although slow is a relative term in this segment.

As an expert on the subject, since I am, after all, a former apprentice editor at the Dutch car show The Holy Cow and producer of the TV report on the 1987 Open Dutch Car Washing Championship, I recommend first watching the video of the Rimac Nevera on the Nordschleife and then seeing how the Mercedes-AMG ONE set the lap record.

Categories
AI crypto NFTs technology

Two Dutch startups with a global market

I don't normally write about my own work, preferring to try to share background, tips and insights that I hope will be of use to you as a reader. But because it is often asked for, this time I like to tell you about two investments I am excited about. Of course, I also cover notable things in the tech world, such as the jubilant crypto world about Ripple, Elon Musk's new AI company, traffic jam dodging by drone and Lionel Messi's deal with Apple. But now first, iXora and Unveil.

Ede-based iXora has developed a form of liquid cooling technology(immersion cooling) that allows data centers to save more than 30% in energy and space, because it eliminates the need for fans as with the usual air cooling of computers. And the latest generation of chips gets so hot that air cooling becomes too inefficient and expensive, but also socially unacceptable given the CO2 emissions. That makes the market potential of iXora huge worldwide.

Amsterdam-based Unveil links top photographers to collectors through its own marketplace based on blockchain technology. Through a careful curation process, collectors worldwide find new high-quality work in a user-friendly way. Collectors can buy the physical work, a print, a digital version in the form of an NFT, or both. Unveil can play a crucial role in the explosion of AI-generated fakes; it guarantees authenticity.

I have previously worked with these entrepreneurs with great pleasure and success, their companies are forerunners in fast growing global markets and sustainability is an important part of their proposition. And not unimportantly, there is also an opportunity for you to participate as an investor even with a small amount, whereas this is usually reserved only for vc funds with very deep pockets.

Please note that this is not an advertisement for investing in these companies. I explain what my considerations were for investing, but I want to emphasize that investing in startups has the very highest form of risk. Simply put, my advice is: only do it with money you could lose. And above all, do it because you support the companies' goals.

Why does Warren Buffett store in the Veluwe?

Earlier this year at CES in Las Vegas, iXora signed a licensing deal with the American company Lubrizol, a subsidiary of Berkshire Hathaway, the investment company of the legendary Warren Buffett. Why would such a global player license technology from a Dutch startup?

Hypotherm Rack Management (HRM) from iXora. Server in and done. Crucial: fits into a standard 19-inch rack, the standard in data centers worldwide.

The answer is that huge demand for energy-saving solutions has accelerated worldwide since de Russia's invasion of Ukraine the helmeted Russian neighbor visit. On top of that, energy consumption in data centers plays an extremely large role, because next to real estate and equipment, energy costs are the biggest expense. Data centers are still full of energy-guzzling fans, which will become obsolete with iXora's liquid cooling.

When using the iXora solution, a data center can accommodate more servers per square foot, with lower energy costs and therefore a reduced carbon footprint. Add to this the huge increase to cloud and streaming services in recent years and the current explosion of AI applications, making it irreversible that heavy server-intensive applications will dominate the market. Conclusion: immersion cooling is hot.

Own experience with data centers

My personal experience with data centers goes way back, for example, I was a very satisfied customer with Flabber and 925 for many years with the innovative hosting company True. (Jort Kelder and I even shot a lightly humorous movie in their data center 15 years ago.) So when True founder Vincent Houwert, after selling True and some wanderings in the Caribbean, couldn't resist getting back into business and started iXora, I was immediately interested.

With Planet Internet, I have been a customer and reseller of data center services for many years, and in the process I have experienced, through trial and error, how complex data centers operate. Although it is a multi-billion dollar business, it is one in which every dime is turned over. I always compare data centers to drinking water from the tap: everyone needs it and uses it, but every penny spent on it is a penny too much so the margins are thin.

Data center owners hate risks and opaque investments. This is precisely why I find iXora so interesting: it is the only party in the world that enables immersion cooling in the existing infrastructure of a data center.

In a billion-dollar market, of course, there are plenty of competitors, but they either only cool the chip, leaving the rest of the motherboard to give off heat and fans remain necessary, or their solutions require the installation of entire jacuzzis into which the servers are submerged.

But I know from experience that data center owners have a huge aversion to this kind of geekiness, because there is a chance of leaking fluids into their data centers where miles of cables run under the raised floors. And no one wants to use robotic arms to hoist a server out of such a bathtub, which is necessary just to replace a simple hard drive.

iXora's solution is deliberately designed for easy installation and maintenance. Nothing robotic arm or bathtub: an iXora chassis fits into the globally common 19-inch rack, and anyone who can lift a computer can slide a server into an iXora HRM.

The team knows the customer

That simplicity in the solution is rooted in the experience of the iXora team, which has literally and figuratively grown up in data centers. Besides inventor Vincent Houwert, who previously founded hosting company True, iXora's founders are CEO Job Witteman, previously founder and 17-year CEO of the Amsterdam Internet Exchange AMS-IX, and CCO Vincent Beek, who has decades of commercial experience in the international technology world. And Erwin Bleeker joined iXora in February as Compute Specialist after spending a few years at Dell explaining how a data center works ;-).

iXora webinar Thursday, June 20

More information about the opportunity to participate in iXora is in this two-page summary. Investing is possible from as little as €5,000 and depending on your contribution there is a bonus of up to 30%. If you want to know more about iXora, I recommend watching the webinar next Thursday, July 20 at 8 p.m. in which CEO Job Witteman explains what iXora does with immersion cooling. why it is important for the world and how you can contribute to .

The Manhattan Project by Andrea Camiolo. Unveil guarantees the creator and the number of copies, in this case a series of three.

Unveil cures what is real, in the age of fake

I write a lot about AI because it is the market in which the most progress is currently being made, with the largest potential market, which is virtually every earthling. At the same time, I worry about how AI will make it possible to manipulate all forms of sight and sound.

As you may know, I have a great love for photography, a passion that unfortunately comes with a commensurate lack of talent. My former colleague Alexander Sporre with whom I worked at business site 925, though, is a talented photographer. But Alexander is also a talented entrepreneur, and he and a number of partners have jumped into a big hole in the market with Unveil.

I believe in Unveil's proposition, in the explosion of AI-generated photos, to act as a beacon and marketplace of originality and authenticity.

What makes Unveil unique?

The developments in the field of AI are so rapid that there is a huge need worldwide for an independent party to guarantee the authenticity of digital work. Without such an independent party as Unveil, it is already no longer possible to tell whether a photo is real, or generated with AI.

Third generation marketplace

I see Unveil as a third-generation marketplace. In the first form, marketplaces were generic, think Marktplaats in the Netherlands and Craigslist in America, with a large unfiltered supply. (Both, by the way, bought by eBay for hundreds of millions.) The second generation marketplaces were a curated part of a large generic offering, think Uber Black and Airbnb Plus, or the Dutch Catawiki, effectively a curated version of eBay. 

In the latest generation of marketplaces, of which Unveil is a forerunner, you will only see a carefully curated, high-level offering with a select small group of providers, who are often exclusively affiliated with a platform. Unveil has already attracted over 1,500 photographers, including a large number of top international photographers such as Bastiaan Woudt and Paul Cupido.

Global market, always traceable

Unveil connects digital art with physical prints on the blockchain, making art photography traceable as a globally tradable product, with the goal of providing royalties to the creator on the one hand and guaranteeing to the collector that the work purchased is authentic, with guarantees about the number produced. This solves a huge problem worldwide.

Proven business model: marketplace

From a financial perspective, it is crucial that the business model of a marketplace is proven and highly profitable, especially in this market, based on a 12.5% commission. Such a solid commission combined with the prices that renowned photographers receive for their work offers very good prospects for Unveil.

The team

Besides Chief Product Officer Alexander Sporre (ex-Richemont, co-founder Stories, art photographer), Unveil's founders are also Chief Commercial Officer Titus de Jong (ex-Salesforce, ex-HP) and Chief Creative Officer Julian Mollema (award winning designer, Ex-Build in Amsterdam). All entrepreneurs with a solid track record in their respective fields. Crucially, there is also a lot of interest in Unveil from the art world. For example, the Head of Photography at Sotheby's EMEA has joined Unveil's Advisory Board.

Participating in Unveil

More information about the opportunity to invest in Unveil is in this two-page summary. If you would like to learn more about Unveil, I would be happy to put you in touch with the founders.

Spotlight 9: Judge finds XRP is, oh no it's not, an investment

Every week in this column, I go over the highs and lows of the most important assets in technology. Never before has the financial world been so dominated by crypto news as it was Thursday, when an early global happy hour erupted in the cryptoscene following a U.S. judge's incomprehensible ruling in the case brought by the SEC against Ripple Labs.

Imagine if XRP had won the case outright....

The judge ruled that Ripple Labs' sale of the XRP cryptocurrency to institutional investors violated securities laws. But, the judge said, there was nothing illegal about the sale of XRP by Ripple Labs to individual traders on crypto exchanges. As if professional investors need information, transparency and protection but consumers don't?

This schizophrenic statement was not understood outside the crypto world. "Securities laws are designed specifically to protect individual investors, based on the idea that they cannot stand up for themselves," James Carlson, an adjunct professor of securities regulation at New York University, told The Information. "Large institutional investors don't need the protection of securities laws. This ruling effectively turns that philosophy on its head," Carlson said.

"Securities laws are designed specifically to protect individual investors, based on the idea that they cannot advocate for themselves. Large institutional investors don't need the protection of securities laws. This ruling effectively turns that philosophy on its head."

James Carlson, New York University

Chance of 'boiler room' fraud

The implications of this part of the ruling are troubling. As Carlson said, "The potential for 'bucket shop' or 'boiler room' fraud is alarming." Think of the Wolf of Wall Street in a black crypto t-shirt. Carlson outlined a scenario in which a crypto company issues tokens to large institutional investors, who are given detailed information required by securities laws, but then resells them through crypto exchanges to individual traders, who are not given this information. The decision is likely to be appealed, so this may not be the end of the story. 

XRP rose nearly 80% within a day, gave back some of the gains over the weekend but still rose nearly 50% in the last week.

It remains a madhouse in AI

It had been coming for a while: Elon Musk has entered the AI battlefield with x.AI and has become CEO of his third company, in addition to Tesla and SpaceX, Musk's space company that was valued at a whopping $150 billion in a private sale last week. The man may have driven on a few blocks past the "eccentric" exit, but it's still mind-boggling how he combines it all. The goal of x.AI is "to understand the true nature of the universe." Musk talked more on Twitter about the goals and possible collaboration with Tesla, shared few details. To be continued, no doubt.

That doesn't head nicely, but with Code Interpreter, ChatGPT can analyze data, create graphs, solve math problems and edit files, among other things. It also supports file uploading and downloading, which previously was not possible in ChatGPT. Wharton professor Ethan Mollick, author of an excellent newsletter by the way, says Code Interpreter can do things he used to spend an unimaginable amount of time on.

I did a little test by downloading a .csv file of XRP price data on Friday and asking Code Interpreter to display the key information from it in a graph. I found the result amazing, especially since Chat GPT is text-based and until recently the output was also limited to text. So not anymore because Code Interpreter spit out three relevant graphs within seconds!

Code Interpreter from ChatGPT generated these graphs from a .csv file I had uploaded. Saves a lot of time and effort!

Anthropic, which raised just under half a billion dollars from investors in May, launched a new version of their Chat GPT competitor Claude.ai. Decrypt makes a good comparison between Claude.AI, ChatGPT and Google Bard. Officially, Claude is only available in the US and UK, but with a good VPN it works fine. I'd love to hear who experiences major differences between ChatGPT and Claude, personally I see little difference in quality.

In conclusion

My favorite guru Gary Vaynerchuk doesn't think Threads is a Twitter-killer either, but points out that it could attract a new audience. Just try it, he advises. For now, my feed on Threads is still filled with second-hand posts from Instagram.

In 2014, I got to know Taco Carlier of VanMoof when we spent a week together walking around SXSW. Apart from being an incredibly nice guy with whom I have a pleasant contact to this day, I find the news about a possible bankruptcy of VanMoof very sad because the company was the big booster of the e-bike as a replacement for the car.

In my experience, integration of all components into a hardware product is extremely complex, Taco and I talked about that several times. He mentioned Tesla as an example of almost complete vertical integration. But crucially, what do you do at the moment when a product continuously fails and you experience quality problems to such an extent that customers become dissatisfied and the service department is overwhelmed. I won't bore you with stories from the old box about the woes called ISDN that I had to contend with, in the transition era between modems and broadband, but sometimes you have to dare to kill a product to survive as a company. Hopefully Vanmoof will survive the current malaise.  

In other electric transport news, it was noticed that Lee Soo Man, founder of Korean K-pop institution SM Entertainment, invested $23 million with partners in passenger transport via drones. The EH216 can carry two passengers and flies without a pilot, leading to extraordinary videos. Just too bad about that bombastic music, therefore here, from SM Entertainment's stable, Red Velvet with Future, theme song from the popular Korean series Start-Up - yes, about Internet startups.

The high-quality sports site The Athletic (acquired last year by the New York Times, which last week dissolved its entire sports editorial staff) produced a nice long read about Lionel Messi's transfer to Miami, made possible by Apple. It remains extraordinary that Messi is the only player to benefit from the growth of subscribers to Apple TV+'s MLS subscription. The question looms as to when Apple will move more seriously into sports entertainment and move to acquire more sports rights, such as the Premier League, the NFL and the Olympics. And whether there will be more athletes then who will directly share in subscriptions to streaming services, separate of their clubs or leagues.

I want to reiterate that investing in startups carries the very highest form of risk. However, I did want to share my considerations for investing in iXora and Unveil. But simply put, my advice is: always do it only with money you can afford to lose and only in companies whose mission you support, then you will enjoy it the most. Profits remain uncertain.

I can't resist playing with MidJourney. This image is a combination of a photo I had uploaded, with an image generated by MidJourney.
Result of the prompt in MidJourney to put an iXora HRM in a room like the final scene from Raiders of the Lost Ark. Looks more like a Transformer on steroids.
Categories
AI crypto NFTs technology

Why Mark Zuckerberg is trying to seem cool

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-weirdo cage fight.

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 the Zuckerberg-created brilliant "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.
  • The state of legislation on AI in Europe and the U.S.: Europe is ahead in terms of speed on legislation on AI. The only question is: Is it helpful to be ahead with restrictive legislation?
  • 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.)

Why true NFTs are the future

In all the news about AI, other fascinating developments risk being underexposed. Therefore kudos to Het Parool, which had an excellent piece on NFTs as a new revenue model for artists with the headline "With the push of a button you can send a work to a buyer on the other side of the world.

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

Spotlight 9: The beginning of a crypto summer?

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.

See you next week!

Categories
crypto NFTs technology

Did Keanu Reeves walk through Amsterdam confused?

There are so many posts about AI that it is hard to find the relevant pieces, but they are certainly there. The Washington Post published this excellent article about the challenges in producing Critterz, the first film with 100% AI-generated characters now online. Filmmaker Chad Nelson says it took only a week to create his entire visual world, including all the characters and mystical forests, with Dall-E. When I read that OpenAI, the creator of Dall-E, had co-paid for the film, I did wonder about the honesty of Nelson's praise. It still feels a bit like falling into the trap of a clever content marketer from OpenAI.

Keanu Reeves previously expressed concerns about how movie studios will use AI to replace talent because, "corporations don't give a fuck about paying artists. Reeves has a point. Dall-E took this photo within seconds with the prompt: 'A distraught Keanu Reeves walking along an Amsterdam canal with his hair blowing in the wind, under a cloudy sky.' There is much to be said about this one-eyed Keanu and that green mailbox behind him, but no doubt a new profession will emerge, a hybrid of programmer and visual designer, using AI to its fullest potential to create virtual worlds indistinguishable from the real thing.

Meet the founders of Unveil

One company that focuses precisely on making the distinction between real and fake, or original and fake, is Amsterdam-based Unveil. Photographer Alexander Sporre started this NFT platform with his partners out of dissatisfaction with the way photography is handled in the NFT world. For collectors of NFTs, it is impractical to search among all the junk on OpenSea and other NFT marketplaces for valuable and unique finds. And if you think you have found something nice at all, you don't know if the work is original and how many of them have been made.

Using blockchain technology, Unveil solves this problem of authenticity and edition management for collectors, gallery owners and artists. The artist can choose to offer only a digital work (a DAB, Digital Artwork on the Blockchain) or a physical work of art (PAB, Physical Artwork on the Blockchain), or both. The MoMa in New York and the Centre Pompidou in Paris have now acquired NFTs, and the combination of physical and digital collecting is expected to take off.

I think Unveil is an example of a third generation marketplace, after the uncurated blind offering (think Marketplace) and the curated auction model (like Catawiki). Legendary investment firm Andreessen Horowitz (Facebook, Twitter, LinkedIn, Airbnb, Coinbase etc etc) recently wrote about it in the annual Marketplace 100 Report: 'from your kitchen to your closet, modern marketplaces do the filtering for you.'

Unveil launches publicly at the end of May, featuring exclusive NFT drops by a number of renowned photographers such as Thomas Albdorf, Bastiaan Woudt and Paul Cupido, each of whom have created their own interpretation of classic themes from Dutch art history: Still Life, Landscape and Portrait.

There is now an opportunity for a limited group of investors to invest in Unveil even before its public launch at the end of May. On May 9, the founders are organizing an investor event in Amsterdam to which the readers of this newsletter are invited. You can register here or make a phone appointment with the founders if you are unable to attend the event.

I am also investing in Unveil myself in this round, and my maxim is that you should think of an investment in a startup as money lost now that may come back one day - but hopefully more than you put in. Note that this is not investment advice and you are investing outside AFM supervision, there is no licensing and prospectus requirement. Alexander Sporre of Unveil is a highly respected former colleague of mine and I am a firm believer in the NFT market, so I am far from neutral.

Binance is more important than thought

The news that Binance in the U.S. is being investigated by the CFTC was a footnote in the Dutch media, which are increasingly dominated by visually appealing incidents such as a lighter on an Ajax head or tractors on a highway. That clicks better and is easier to write about than analyses on CFTC, AML, KYC and other boring coolos. I wrote at length last year about why Binance is rightly under fire. Bottom line: Binance is not doing enough to combat money laundering. But Binance, and its former rogue competitor FTX, are important for two reasons.

First of all, the traditional financial world now realizes that digital assets are not disappearing, no matter how much effort is made to keep them far from investors. Pioneers such as Binance, which introduced innovations at an unparalleled pace, are forerunners that hold up a mirror to the traditional big banks and demonstrate how continuous and rapid innovation is indeed possible in the financial world. That attracts a large group of mostly young, active investors worldwide that banks can only dream of. Those banks should look at what Binance does well in terms of products and services and link that clout to their own, stricter regulations.

Second, crypto investors should now realize that those three-letter abbreviations AML and KYC are important to them as well. It is simple: if the source of money, crypto or otherwise, cannot be proven, and if it is not clear who owns these assets, then there will soon be no payment link to traditional finance. Last week, some of Binance' s Australian operations were banned by the government. The Dutch players are much neater, but if the international crypto exchanges where active investors like to trade continue to operate so shady, soon any transfers to or from Binance and its competitors will be denied by banks. It will thus become impossible to buy a house with crypto profits, for example. This will then only be possible in dubious regions, but not everyone wants to live in Montenegro or Dubai.

Paris, Texas?

Although I firmly believe in digital assets and blockchain, until independent data is available that proves the energy source of mining, I will not invest in Bitcoin because of the associated CO2 emissions. Because I work with Bluenote in blockchain but exclusively in the area of sustainability, in terms of event attendance, I often hop on two paths.

The Sustainable Innovation Forum is taking place in Paris in early May. Just when the transition to a sustainable society is under pressure from the faltering global economy, this is an interesting event where, unfortunately, few digital assets will be discussed. Not even in the area of carbon trading. A week earlier in Austin, Texas, Consensus is organized by the leading crypto medium Coindesk. There, of course, there is plenty of focus on digital assets, but little on sustainability. It remains tricky.

Fine links

Zeeland girl Meltem Demirors
  • a special person: too few Dutch people follow Meltem Demirors, one of the most intelligent and original thinkers in the crypto world. She has spoken before the U.S. Congress about crypto, is the authoritative voice of reason about digital assets on CNBC and crazy about leather pants and strange memecoins. The daughter of Turkish parents, Demirors was born in ... Terneuzen, before moving to America at a young age. Become her 257,000th follower on Twitter and you won't regret it.
  • still a handy news source: Hacker News looks like a 1955 Albanian telex, but just checking the headlines always turns up something special. For example, I saw this this week via Hacker News: optimist with lots of spare time turns a Dyson hair dryer into an aircraft engine and cyclist smuggles six thousand SD cards into China *in.*
  • one of my favorite newsletters is that of legendary investor Fred Wilson. In it I read this week that his vc USV has invested in Noya, a startup developing technology the world needs: CO2 removal from the air, American-style called Direct Air Capture Technology. Sounds better anyway.

Geek Sentiment

Finally, a look at the major share prices in tech, where I compare Amazon, Apple, Google, Meta and Microsoft to the S&P 500, the Dow Jones Index, and Bitcoin and Ethereum as the most important gauges in the crypto world. Ethereum (ETH) is the winner of the week with over 10% rise.

It was not Bitcoin's week, although BTC topped $30,000 for the first time since last June. It always stings Bitcoin maximalists when an altcoin, particularly the leading development platform Ethereum, shows better returns as it did this week. But Bitcoin fanatics were especially outraged because the New York Times published a comprehensive study showing that 34 Bitcoin mining companies in the U.S. consume even more energy than 3 million households. Bitcoin fans correctly noted that the article misses the mark by blaming inefficient and vastly outdated energy subsidies on Bitcoin. But Bitcoin's absurd energy consumption is irrefutable. "They are adding hundreds of megawatts of new demand when we are already facing the need to rapidly cut fossil energy," said Jesse Jenkins, a Princeton professor who studies power grid emissions. "If you care about climate change," he added, "that's a problem." There's no pin in that.

I hope to get another newsletter up next week, but we found a sick puppy on the street the day before yesterday that we have taken in to care for and that is proving to be more time consuming than I thought. We are still looking for a name for the puppy, tips and suggestions are welcome! Also about the newsletter of course.

Have a great Sunday.

Sincerely,

Michiel Frackers

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Recent interview at BNR with Ben van der Burg and Herbert Blankesteijn

Categories
crypto

Today's NFT and crypto news in 5 links

Okay, it's not all literally news exclusively today, but these are the most notable articles I read today. News for me, that is, actually. Lots of news about NFTs, a new major crypto fund and SushiSwap might get a Swiss foundation; SushiSchwatz?

Airline Qantas launches NFTs

It's not the first airline to do this, but Qantas says it will use the proceeds to combat CO2 emissions. I'm curious to see how measurable this becomes and will try to follow it. A company launching an NFT in a press release is reminiscent of the days when companies proudly announced that they had a website. And the media obediently reported that as news as well. Hello 1995, nice to have you back.

Copyrights of NFTs increasingly problematic

A particularly good long read on who actually owns what in the wonderful world of NFTs. A great quote:

'"Right clickers" store JPEG copies of the illustrations of popular NFTs. The owners of those NFTs say this is copyright infringement. Only one of them can be right.

Building vast NFT worlds.

This particularly nuanced and comprehensive article dates back to March 12 but I just got it via @phitar. The article is special because it considers NFTs from a technical, as well as a practical and even artistic perspective. The author, Simon de la Rouviere, programs, writes, makes electronic music and is a CEO. If he can also dance, I have discovered my homo universalis of NFTs.

Former prosecutor launches $1.5 billion crypto fund

Of course, founder Katie Haun has done much more, but in the blog post introducing herself, this sentence stands out:

"I spent more than a decade at the U.S. Department of Justice prosecuting organized crime, homicides, public corruption, prison gangs, white-collar crime and money laundering."

And now she is going to invest in pictures of monkeys.

A second passage that stands out:

"We have built community participation into our practices from day one. As an early investor in this market, I am proud of the pioneering program I helped develop to delegate governance rights and tokens to community organizations, universities and nonprofits."

As with Qantas, the question is: how? Hopefully we are going to see this noble initiative become a reality.

SushiSwap gets a Swiss foundation

All well and good such a Decentralized Autonomous Organization (DAO), but if it can get you into trouble in terms of liability, a Swiss foundation seems like a good solution. The DAO member of DeFi platform SushiSwap who is proposing this is budgeting $100,000 for set-up and another $100,000 for the foundation's annual costs. That will get you about just about as far as registration in and annual dues to the Swiss Chamber of Commerce in Switzerland.

Categories
crypto

Do you believe someone about crypto who sold all his Bitcoins himself?

Now that my first week of blogging about crypto is over, I want to answer the most frequently asked questions I've received. One smart-aleck asked, "why would anyone be waiting for the opinion on crypto and nfts from someone who sold all his Bitcoins years ago for way too little and doesn't own any nfts himself? I answer that question last.

The most frequently asked question I received was: why did you start blogging about crypto?  

I have been following the crypto news for years and talking about it with colleagues and friends. In fact, I've learned the most from their opinions and tips. I now hope to accomplish the same on a larger scale, by hearing feedback from readers/followers, although that will certainly take time. Setting myself the task of writing something about crypto and nfts every business day forces me to stay sharp and look a little beyond my own work at Blue City Solutions and our crypto project Bluenote. I do not expect to ever become as good and relevant as Fred Wilson, but I do hope to inform and preferably inspire those interested in the crypto and nft sector, if you will allow me to be so immodest.

You wrote that you don't buy Bitcoin because it emits too much CO2. That argument has been debunked for years, you really need to learn more about it.

Ok, that's not a question and I'll answer it with a sincere counter question: what percentage of all Bitcoin mining is currently done with renewable energy? I am very interested in researching the energy mix of Bitcoin miners, but solid research still seems to be lacking. I would love to hear any tips and read any links to studies!

By setting aside Bitcoin, you suggest that Proof of Work has no value. But there are many situations where PoW is valuable, or do you think all PoW projects are irrelevant?

I really like the distinction between the energy-hungry aspect of Proof of Work (PoW) and the need for a well-functioning consensus mechanism. The relevance of PoW and the actual status of Proof of Stake (PoS) are two topics I try to follow keenly. And I do find Bitcoin fascinating as a concept, as an investment and as a pioneer of decentralized currencies. Satoshi Nakamoto, the author of the Bitcoin white paper, deserves to get a Nobel Prize in economics someday. But I also think there will be better blockchain projects and crypto-tokens. Only, those will always be conceptually indebted to Bitcoin.

Is it true that you once thought Bitcoin was nothing at all?

Yes, there is even evidence of it, unfortunately 😉 More than 10 years ago, Bitcoin kept coming up on the BNR Digital radio program of tech journalist Herbert Blankesteijn, the Dutch Walt Mossberg, where I was a regular guest. At the time, I lacked the elementary interest to delve into Bitcoin enough, and in my mind I compared it conceptually too much to Linden dollars, the currency from the computer world Second Life. The Mount Gox hack didn't help much. My wrong conclusion then was that a central entity, such as a central bank, is needed to prevent this kind of misery. But Mount Gox had nothing to do with Bitcoin; rather, it was a hack of a single point of failure: an exchange. A central entity.

I had never read the Bitcoin white paper until 2015. Although I wonder if I would have been able to distill the most important aspect of blockchain technology from it: decentralization. Of all the special elements of blockchain technology, I find decentralization the most fascinating.

Incidentally, since then my regular checking question to know how to value someone's opinion on crypto has been, "have you read the Bitcoin white paper?" (And if someone answers that question in the affirmative but you suspect they haven't, it pays to ask the trick question, "did you find it such an impractically thick book too? After all, the Bitcoin white paper covers only 9 pages including 1 page of references).

Did you really sell all your Bitcoins after the Mount Gox hack?

Even though I had never read the white paper, I did buy 1000 Euros worth of Bitcoins about 10 years ago. Actually because of the radio program with Herbert Blankesteijn. Mount Gox was not the only reason I sold the Bitcoins again: I had major knee surgery, people I knew had died aboard MH17 and I was embroiled in a lawsuit with the Dutch government that required time, money and energy. It was simply a rotten time. I think I had something like 30, maximum 35 Bitcoin. I sold them for less than 10,000 Euros. There is a reason I say: I NEVER give investment advice.

Although a former head of trading of a large bank once said to me, 'don't whine, because you still had 10 X returns, more than fine. But: you should only have sold half, not all.'

It wasn't until 2016 that I started looking into blockchain and had to completely revise my opinion of Bitcoin and blockchain. There is proof of that too 😉

So you develop crypto (BNOW, the token of the Bluenote protocol) and put together a portfolio of PoS layer 1 tokens, but own no Bitcoin and no nfts: why should I read what you write?

True, I do not own Bitcoin because of its associated carbon footprint, although I remain hopeful that this problem will be solved. For me no gaming assets or nfts, they are still too difficult and time consuming for me to understand properly. I believe enormously in the potential and transparency of nfts, but I would develop them myself rather than buy them from others. Simply because it takes too much time to properly assess their value and then it still remains a huge gamble.

I have been involved in crypto for over 6 years now from Blue City Solutions and Bluenote is our first crypto project, which is still developing; but only this year I think I have enough to say about it in a way, that other people might have some interest in it. The first signs are positive and it is nice to see that serious media like BNR read my blog. Nevertheless, I'm sure I know a lot more I don't know about crypto, decentralization and nfts, than I do about them. My ambition is to share with others my journey of discovery in this fascinating world.

Categories
NFTs

Zuckerberg's midlife crisis with NFTs on Instagram

Facebook, sorry, Meta CEO Mark Zuckerberg announced yesterday that in the coming months it will become possible to mine and trade NFTs on Instagram. It is an attempt by Zuckerberg to stay relevant to young people and appease the stock markets, dwarfed by TikTok on the one hand and, on the other, the huge market value of NFT marketplaces like OpenSea.

Engadget reports this about the session with Zuckerberg at the leading festival SXSW:

"We're working on bringing NFTs to Instagram in the near term," he said. He didn't detail exactly how that would take shape, but suggested people would be able to show off their existing NFTs and potentially mint new ones. "I'm not ready to kind of announce exactly what that's going to be today. But over the next several months, the ability to bring some of your NFTs in, hopefully over time be able to mint things within that environment."

It was never a poet.

SXSW has increasingly changed from the springboard where revolutionary tech talents take the axe to the carrot of ruling powers such as the Facebook empire, into a kind of bar-dancing where mom and dad also have a dance after Friday afternoon bingo. That can be a lot of fun, and Uncle Frackers himself has organized regular dings during SXSW. But it was no coincidence that the session with Zuckerberg, who likes to present himself as a great technological visionary, was also open to convention attendees with a film and music badge, with the recommended knowledge level: "beginner.

Level: Beginner

Meta's biggest money-maker was always Facebook, which has now turned into a kind of online SBS6 for people over 50. Instagram is also moving hard in that direction, while Whatsapp remains difficult to monetize. The playful vistas Zuckerberg paints about the Metaverse have already spooked investors: this year, FB (short for Meta, cough) shares fell as much as 43%. That came after Meta estimated revenue figures for 2022 much lower than the market expected, primarily a result of Apple's tightened privacy measures. In short, Apple is making it harder for Meta to track and stalk you everywhere online.

With that have come some new problems for Zuckerberg. First, it is clear that his weapon in the battle for youth, Instagram, is being completely outpaced by TikTok. Every successful feature of TikTok is copied by Instagram while it itself hardly introduces any innovations that TikTok adopts. Instagram also turns out not to yield good conversions for advertisers, in other words: nice for branding like a billboard along a busy highway, but not a marketplace where people make transactions on which Zuckerberg pockets a percentage each time.

But there is a fast-growing marketplace achieving huge revenues and good margins: OpenSea, the marketplace for NFTs that was recently valued at over $13 billion. Zuckerberg has obviously followed the rise of TikTok and OpenSea closely and hopes to kill two birds with one stone with NFTs on Instagram. That desire is not surprising, as young TikTok users are largely crypto users and the primary target audience for NFTs. TikTok is a meeting place for the digital vanguard, just as OpenSea is for traders in NFTs.  

Zuckerberg's announcement about NFTs on Instagram is very reminiscent of the puffed-up marketing copy he churned out about Libra. That was that crypto currency from Meta that was going to be the whole thing and died a quiet death within three years. For as unimaginably long as it seems, Libra was only announced three years ago, in 2019, and has already been buried without fanfare.

It's not to say that NFTs on Instagram are definitely going to fail, just that all the conditions for total failure are there: a poorly converting medium for transactions, an aging target audience that comes for very different things than NFTs, and stronger competitors on the chessboards where it counts: the active youth at TikTok and the NFT merchants at OpenSea. The wait is for TikTok to do something with NFTs. Perhaps in a partnership with OpenSea, the dream scenario for traders who go short on Meta.

No, the more important crypto and NFT news of the past few days was elsewhere than Meta. Singapore announced it was going to impose income tax on NFTs, very pragmatic and logical. It shows how big NFTs already are in Southeast Asia. And Consensys, maker of tools like Metamask, raised $450 million from investors. Now if Consensys would use those tokens to develop user-friendly crypto wallets, the breakthrough of crypto and NFTs to the general public is near.