Elon wrong on crypto, Sam Altman psychoanalyzed, George Michael & Wham! top the charts, Narco Subs cruise the Amazon, and more tidbits...
Peace on Earth and goodwill toward all
Merry Christmas and blessed holidays to you🎅🏽🙏🏼.
Not being one to get caught up in the commercial side of Christmas, I relish the quiet of the end-of-the-year break and try to use it as a time to stand above all the noise and re-assess the ‘noble cause.’ One data point I discovered when responding to Marc Andreessen’s The Techno-Optimist Manifesto last month is the fact that the poverty rate dropped most dramatically right alongside the development of the World Wide Web and commercialization of the Internet, and it turned out not to be a coincidence. It is called the benefits of increased transaction velocity.
For those of us who rode bustin’ broncos during the Web1 and Web2 rodeos, this is something to feel good about. It was a noble cause, and we didn’t even know it ;)
Speaking of increasing the velocity of transactions, the 260 million Chinese participating in the pilot program for the most successful government-backed digital currency on the planet—the CCP’s e-CNY—are doing just swimmingly using the e-CNY as a payment source for over 200 designated services. It is beyond words why the US is so crypto tone-deaf, and this subject has not been a subject of the US Presidential debates. I sincerely hope South America takes off and lights a fire under our ass.
"Right now, the balance of e-CNY is tiny, but this small balance supported a big number of transactions, which means that the velocity of digital currencies is significantly higher and more efficient than fiat by orders of magnitude.’
—Yi Gang, Governor of the Peoples Bank of China
The CCP's digital currency success so far does help prove the promise of Web3. At a minimum, we can continue to step up transaction velocity and drive the poverty rate into the ground—basically eliminate world hunger. We have no doubt we will accomplish this. Our further fantasy is for individuals to be able to buy groceries and supplies for validated single mothers and others in need on a direct giver-to-receiver blockchain dApp, that offers transparency and traceability, and issues givers a token to easily deduct donations on their tax returns. Now, that is a noble cause!
At Cryptonite, our noble cause is to do our best to chronicle the entrepreneurs and enterprises driving Web3, as well as Greentech and the Life Sciences. In 2024, we plan to support the Weekly Rap with a web and mobile app-based Daily Rap and start producing insider interviews and Founder Pitches on our Cryptonite Live! webcasts. We are also set to introduce AI-enhanced indexes with proprietary analytics for private companies, altcoins, and VCs.
As always, we will live by the editorial approach that presumes reader intelligence, strives to speak simply and to the point, and be upfront about our worldview. And, like the old Red Herring and the 180-year-old Economist magazine, we will win trust by being straight up, doing our homework, and remaining critical in our thinking. Media brands today are shallow sycophants to the fashionably elite and try to hide their biases, which is why they have lost our trust and are failing.
Cryptonite is also about the American dream, which is simply supporting the freedom of an individual to be whomever they wish to be as long as they respect others. It is also about having faith that this dream is our country’s greatest advantage. This is why one in five potential migrants—about 158 million adults worldwide—name the US as their desired future residence. This is not something to fear; this is a great compliment!
But in America, we know in our hearts we are not living up to this dream. The social networks and corporate media honchos and the politicians have chopped us up into little groups of shallow stereotypes and successfully pitted us against each other for their own survival (so they fantasize).
Part of our noble cause is to try to help bring people back together around the American dream to live and let live.
To achieve this, Cryptonite promises to never utter political labels or partisan talking points. We will focus on innovation and its impact and opportunities. We will stick to facts-based journalism and well-reasoned opinions. Our nature is to challenge convention, spark debate, and teach but also learn. It’s an honest job if we do it right—and the kind of duty the world needs right now to keep the powers that be honest and at bay.
This month marks our 6th month of publishing, and as noted, we have big plans ahead. If you are feeling generous this Holiday Season, we would appreciate your support by becoming a paid member of our community below. We like to keep most of our content free, as we calculate we are gaining 30 to 50 new young subscribers a day. But we do aspire to grow in 2024 and bring on more talent to serve you better, and that will require new investments.
We thank you for every time you land on one of our pages and look forward to being with you on the brilliant journey in store for all of us in 2024 and beyond.
—Anthony Perkins, founder & editor, Cryptonite, Christmas Day 2023
George Michael & Wham! top Christmas song chart for 2023
The late George Michael and Wham!’ Christmas tune, Last Christmas, is the No 1 this season, 39 years after the song was written. The hit was streamed 13.3 million times this week and was helped along by special vinyl and CD editions. The song’s official YouTube video has over 862 million views.
“George would be beside himself that we’ve finally obtained a No. 1 Christmas song. George said he wrote Last Christmas with the intention of it being the No 1. Christmas song in 1984, and it was a huge disappointment to us both when it didn’t reach No. 1 in 1984. Over recent years, it seems it’s become part of the fabric of Christmas for a lot of people, and so here we are in 2023—Mission accomplished!”
—Wham! ’s Andrew Ridgeley
Last Christmas was denied the festive top spot back in 1984 by the release that same year of Band-Aid’s Christmas song, Do They Know It’s Christmas?, which also featured George Michael. We prefer the latter song of the two and posted it above—How many 1980s icons in the music video can you recognize? (Hints—Bono, Sting, Boy George, Phil on the drums…).
Did you know?
(Overheard on the streets of the global Silicon Valley. Got any hot insider tips? Email us editor@cryptoniteventures.com)
Billionaire Boys & Girls Club
The Washington Post has written a longer gossipy piece about OpenAI’s Sam Altman’s rise within a cabal of Silicon Valley top investors, including his mentors: Peter Theil, Vinod Khosla, and Y-Combinator founder Paul Graham. Typical of an article of this nature, the Post’s authors also play a game of ‘palm journalism’ in the absence of critical analysis or conclusion. On the one hand, Sam is positioned as the ‘strategy genius’ who sees trillion-dollar opportunities before everyone. Yet, on the other hand, he is an aloof, manipulative, and sometimes revengeful manager.
Our observation (we have yet to meet the man) is Sam Altman has proven himself as a modestly successful entrepreneur (he made $5M for selling his first company, Loopt, for $43M, after raising $21M in VC) to a successful connector and early-stage investor as the young President of Y-Combinator. Still, it is way too early to claim victory at OpenAI.
Despite our respect for the genius and success of Sam’s three mentors, we see several red flags in Mr. Altman’s story that cause some pause. First, Sam showed a lack of savvy by structuring OpenAI to report to a non-profit board, which was clearly a flawed and unworkable idea from the beginning and ironically led to his temporary ouster.
Second, Sam is said to operate ‘more as an investor, rather than a CEO.’ This is a problem because investors are always looking for the next deal, whereby CEOs must maniacally focus on their company’s handful of top risks and solve them. Two completely different mentalities.
And finally, as an extension of the last point, Sam seems scattered literally all over the map, while his only real job of claiming the generative AI throne is very far from achieved. OpenAI is living in a highly competitive, overheated marketplace that is very competitive. Using ChatGPT today is like playing Pong on an Apple I with a wooden keyboard back in 1976—It was insanely cool then but still a $666.66 toy. Sam still has a huge mountain to climb.
Sam is literally scattered all over the map trying to create a Worldcoin, hop-scotching the Middle East seeking money to build AI chips, a giganticly expensive endeavor, and schmoozing politicians. Sam demonstrates a clear sense of urgency about OpenAI’s ‘ever-expanding capabilities to make huge profits,’ yet he lacks the Steve Jobs-like focus.
Sam posted this advice to entrepreneurs back in 2019, ‘You also want to be an exponential curve yourself - you should aim for your life to follow an ever-increasing up-and-to-the-right trajectory.’ That sounds lovely, but the law of physics also states that given today's technology, if you are flying much faster than Mach 3, your aircraft is likely to blow up in mid-air.
UnSocial Networking
In an interview on X last Thursday, Elon told ARK Invest Boss Lady and Tesla bull Cathie Wood he wants to grow X by turning it into a ‘giant brain’ and adding financial services to the platform. Elon has the AI pedigree to build the brain, but is he right enough about where payment services are trending to pull from the financial services platform?
“‘I don’t spend a lot of time thinking about cryptocurrency—hardly any at all. I have thought for a long time about money and the nature of money, and it’s really a database for resource allocation. Fiat currency is actually fine as a database for resource allocation, provided that it’s rules-based and there’s not much abuse from the government. You want to minimize noise, minimize latency, and minimize packet loss. Inflation adds noise to the system.”
—Elon’s response when he was asked about Bitcoin
We have no doubt that in spite of losing nearly half its value since Elon bought the network, he and X Boss Lady Linda Yaccarino will diversify and grow X’s paid services business and get back into growth mode. Most of the loss in X’s value had to do with being overvalued in the first place by bot traffic and an industry-wide advertising slump.
From the very beginning, Elon always said he wanted to be the WeChat of the West. [WeChat is a Chinese social network app that combines instant messaging and mobile payments developed by Tencent with 1.3 billion users vs. X at 556 million.] Twitter has primarily operated as a one-trick pony with a group chat supported by advertising.
Elon's weak position on Bitcoin and his resolve to trust Fiat currencies are definitely anti-trends. If Elon wants to be a payments platform, we suggest he studies Block's numbers—given its status as the world's fourth largest payment system behind Visa, MasterCard, and PayPal. In the third quarter of 2023, Block's net revenue grew 24% year-over-year to $5.6B, and Bitcoin represented 43% of that revenue haul. PayPal also holds over $1 billion in crypto for its customers (over 90% BTC and ETH).
Wall Street is clearly rushing towards asset tokenization and blockchain-based transactions to achieve more efficiency at a fraction of the cost for their clients. Before long, all customers will demand it. Elon will definitely grow X, but being in denial on crypto means X will grow a lot slower.
Ironic anecdote: Tesla’s last results showed they held $184 million in digital assets—the third-largest bitcoin holdings among publicly traded companies, and Tesla also accepts Dogecoin for payment.
Facebook can’t seem to stay out of trouble. Four years after Zuck announced it, FB finally rolled out its new encryption technology that blocks everyone except the sender and receiver from seeing direct messages. (Which we support).
However, critics, including a flock of former employees, claim encrypting messages ‘will create a breeding ground of predators who can access our children and not be caught.’ (True.) As a first step to address these serious issues, we suggest raising the age to join FB, Instagram, and TikTok from 13 to 16.
VC Whispers
Menlo Ventures appears to be leading a new $750M investment round in 2-year-old OpenAI rival Anthropic for a $15 billion pre-money valuation—a 3x step-up in the value of the company’s previous round last spring. Amazon and Google are also both multi-billion dollar investors in the company.
AI Tracker
Apple is negotiating with major publishers to license their content libraries for iPhone-makers’ generative AI systems. These organizations include Condé Nast, publisher of Vogue and The New Yorker; NBC News; and IAC, which owns People, The Daily Beast, and Better Homes and Gardens. It’s becoming very clear that deep-pocketed Big Tech players will have the advantage of being able to pay big money—upwards of $50 million per license, to compete in the generative AI space.
OnHollywood
As we were speculating in our last Rap that Media Heiress Shari Redstone was peddling Paramount to David Ellison’s studio Skydance, Warner Bros. Discovery CEO David Zaslav was meeting with Paramount Global CEO Bob Bakish to talk about a merger between the companies. Further rumors are that NBCUniversal owner Comcast is also looking to find a way to the bargaining table. It is expected that the consolidation of the media and studio giants will continue as traditional entertainment companies Big Tech interlopers, including Amazon, Netflix, and Apple, in streaming.
WBD and Paramount would be looking to roll their content assets, TV, film, and sports, and combine WBD’s Max and Paramount+ premium streaming services to gain efficiencies. WBD is also licking its chops to combine Paramount blockbuster film franchises, including Terminator, Transformers, Mission: Impossible, Top Gun, A Quiet Place, Teenage Mutant Ninja Turtles, The Godfather, Paranormal Activity, Scream, and Star Trek, with its stable including the DC films, Harry Potter and Lord of the Rings movies.
A merged WBD-Paramount would also combine a shrinking yet formable TV cable TV lineup, including WBD’s CNN, HBO, TNT, TBS, Discovery Channel, Cartoon Network, Food Network, HGTV, and TLC, with Paramount’s CBS, Comedy Central, MTV, Nickelodeon, and BET.
Meanwhile, Paramount management has considered laying off more than 1,000 staffers in early 2024 to cut costs.
Much of the buzz around this deal centers around how the combination of living dead and declining CNN and constantly in third in the network news CBS is ‘radically transforming the industry.’ It’s pretty laughable since way back in 2000, it was just the peak of cable and satellite TV, with around 100M subscribers and down to 70M in Q2 2022.
Yes, a merged CNN and CBS News would save millions with two disparate news gathering operations merged into one. But it is not a 1 +1 = 3 deal; it is two shrinking giants trying to survive by chopping dozens of correspondents and producers’ jobs.
Best on the Block
Into the Metaverse
Apple’s lovely, yet expensive, Vision Pro goggles will be available for sale in February. The first version will not include features such as Siri, the virtual keyboard, or the front display screen that allows others to see the wearer's face and eyes rendered in real-time, which were part of Apple’s demo last June.
The Vision Pro’s integrated eye tracking and AR capabilities produce a video feed of the user’s eyes on the external display. This allows for natural eye contact and social signaling that feels face-to-face rather than walled-off. We say wait for V2 to get the good stuff—unless you are an Apple junky with lots of bank 🏦.
Space Shots
The shadowy Chinese miniature spaceplane named Shenlong (Divine Dragon) conducted its 3rd known mission to place unknown objects into Earth orbit watch video below). The reusable space vehicle, comparable to the U.S. Space Force’s X-37B (set for its seventh mission), clearly has military applications, although the exact nature of its payloads remains mysterious.
Gen Z vs.
The new Census Bureau stats show Gen Zers flooding Ann Arbor, Michigan, while Millennials are moving over 700 miles away to Cambridge, Massachusetts. The big difference? The cost of living is cheaper in Michigan. Millennials prefer the West Coast in states like California and Washington, while Gen Z skews more East Coast, with five of their top 10 cities in eastern states. The Boomers, of course, love Florida☀️ most.
Chaos & Complexity
Leaked ‘Narcofiles’ in Colombia outline a changing cocaine production and trafficking business. Colombia is still the biggest producer but has been hard hit by falling coca leaf prices and the emergence of new, synthetic drugs such as fentanyl. Colombia is no longer the leading international trafficking player, a role now split up between Mexican, Albanian, Brazilian, Ecuadorian, and Israeli groups. There is also an increase in the use of submarines to transport drugs along the Amazon River from the Pacific to the Atlantic.
Pura Vida (pure life)
Tea tree oil is an often-overlooked multi-purpose essential oil and plant extract that is drug-free, natural topical for infection protection, and treats nail fungus, dandruff, athlete’s foot, and other skin infections. The oil is also used as a disinfectant to kill bacteria, viruses, and fungi throughout your home.
Tea tree plants are primarily from Australia’s New South Wales and Queensland. For centuries, the continent’s indigenous people have used tea tree oil as a germ killer, applied topically on wounds and skin infections, and as an herbal medicine to treat coughs and colds. They crushed and heated the leaves, then inhaled the vapors.
—Dr. Frank Lipman, MD.
A new study finds that exposure to artificial light during nighttime is linked to a higher risk of developing psychiatric disorders such as anxiety, bipolar disorder, post-traumatic stress disorder (PTSD), and tendencies toward self-harm.
An epic Whitney Houston Christmas song live performance
Introducing the 2024 Cryptonite 300 competition—Private Web3 companies worth the bet
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