Release your love hormone, Elon's update on his brain chip; Masa and Sam take on booming Nvidia, Decentralized ID, and SocialFi to the rescue...
Brain Chips and Moving Mice
Elon Musk reported an update on the first human who allowed a robot to implant a Neuralink chip in their brain last month after the company received its approval for human trial recruitment in September.
“Progress is good, and the patient seems to have made a full recovery, with no ill effects that we are aware of. Patient is able to move a mouse around the screen by just thinking, we are trying to get as many mouse button clicks as possible from the patient.’
—Elon Musk in an X Spaces post
Neuralink robots surgically implant a brain-computer interface in the part of the brain that controls our intention to move. The initial goal is to enable people to control a computer cursor or keyboard using their thoughts. Long-term plans are to insert chips to treat conditions like obesity, autism, depression, and schizophrenia. Neuralink was valued at about $5B last year.
Did you know?
(Overheard on the streets of the global Silicon Valley. Do you have any hot insider tips? Email us editor@cryptoniteventures.com)
Billionaire Boys Club
SBF’s new homie, G Lock, a former member of the Bloods, gave an update on the former billionaire Crypto Queen to crime reporter Tiffany Fong. SBF remains at the Brooklyn jail while awaiting his sentencing on March 28, where he faces up to 115 years behind bars.
“SBF is good guy. Weird as sh*t—can be strange. But he is a good guy. He didn’t snitch on nobody—Sam is a gangster. Sam is more of a gangster than Tekashi69; Sam Bankman stood on all ten toes. Tekashi ratted [a reference to the rapper who cut his 40-year prison term for weapons and drug charges by turning on his fellow gang members]. When we first saw SBF, he was clean-shaven and had a belly—he had been eating good. Now he is as skinny as a toothpick [SBF subsidies on bread and peanut butter because they won’t feed him the vegan diet]. He’s not getting a shower; he’s not doing anything. Now he scruffier than a motherf*cker—full beard. But nobody’s beating him up. Biden should pardon SBF.”
—G Lock is a fellow SBF jailmate and former member of the Bloods.
Peace by Satellite
Elon Musk has been nominated for the increasingly politicized Nobel Peace Prize by Marius Nilsen, a member of the Libertarian Progress Party in the Norwegian Parliament. Marius appreciates Elon for being a ‘stout proponent and adamant defender of free dialogue and speech in a polarized world.’ He also praised Elon for having SpaceX provide satellite coverage and Starlink terminals to connect Ukraine soldiers fighting on Kyiv’s battlefield after Russia’s February 2022 invasion of their country.
“The multitude of tech companies Musk has founded, owns or runs, aimed at bettering societies, increasing knowledge of both earth and space, in addition to enabling communication and connectivity globally… has helped make the world a more connected and safer place."
—Marius A Nilsen, Member of the Norwegian parliament
The Norwegian Nobel Committee, which decides the winner of the award from a list of several hundred nominations every year, accepts nominations from government officials as well as people in academia. The nomination process runs through March, and the winner is announced in October.
In 2020, Christian Tybring-Gjedde, another Norwegian parliamentarian from the Progress Party, nominated Trump for the Nobel Peace Prize, citing his role in brokering the Abraham Accords, which established full diplomatic relations between Israel and two Arab countries—the United Arab Emirates and Bahrain.
Peace on Earth and goodwill to all humankind ☮.
Silicon Valley '24—Coming live this summer!
Join Cryptonite & Draper Associates at the first annual Silicon Valley ‘24. —a non-profit initiative to be held this summer in Silicon Valley and broadcast around the world. The dates and location are to be announced soon.
SocialFi Takes Our Power and Privacy Back
Cryptonite regularly critiques the Web2 social network Goliaths' abuse of our personal data, social and political manipulation, and wide open doors to predators and scam artists—basically to do whatever it takes (except use their imaginations) to meet Quarterly Earnings. Left at the altar is their customers' privacy and sanity.
On our end, we aim to architect a Web3 social network to bring our 650,000 Weekly Rap members and millions of other global Silcion Valley innovators online in a way that meets the decentralized computing standards Aave founder Stani Kulechov articulates below. It’s time to move on from the Web2 era of centralized and privacy-invading social networks and take back the power and some of the rewards for the users who are adding all the value.
“From now on, you will own your profile, the content you create, and your social network.”
—Stani Kulechov is the founder of Aave and the Lens Protocol.
Throughout this journey, we have benefitted from the new boom in SocialFi innovation. We are leaning towards adopting the Lens decentralized social network protocol developed by Stani’s company, Aave. Building on the Lens Protocol will allow Cryptonite to create a decentralized platform on the Polygon blockchain so we can provide users with full ownership, control, and customization of their digital identity and social interactions.
Our social graphs— the posts, comments likes, and follows that form a complex web of connections between online profiles—are currently owned by social media companies, and that data is quite valuable. SocialFi aims to allow users to keep their data. It is also censor-free because all Cryptonite members will be validated and own their posts, and only the original poster can remove their posts. Also, if a user gets booted from the platform, she won’t lose her entire social media presence because her social graph is on-chain.
Top VC-backed decentralized social network protocols:
Lens Protocol—Venice, CA-based. Web3 social networks built on Lens: Orb and Butterfly. Lens raised $15 million thus far, led by IDEO CoLab and General Catalyst, Variant, and Blockchain Capital, as well as angel investors: Uniswap CEO Hayden Adams, OpenSea cofounder & CTO Alex Atallah, Balaji Srinivasan, Sandbox cofounder Sébastien Borget, Polygon cofounder Sandeep Nailwal.
Farcaster—Las Angeles-based. Produced by Merkle Manufactory. Web3 social networks built on Parcaster: Warpcast. Farcaster has raised $30 million thus far, Led by Andreessen Horowitz and Coinbase Ventures, Balaji Srinivasan, Elad Gil, First Round, Floodgate, Haystack Ventures, Mischief, Multicoin Capital, Offline Ventures, Proof Group, Raymond Tonsing, Ribbit Capital, Scalar Capital, Standard Crypto, Uncommon Projects, and Volt Capital.
Deso—San Francisco-bases. DeSo has raised over $1B and is backed by Sequoia, Andreessen Horowitz, Social Capital, Coinbase Ventures, and Polychain Capital. The founders are Nader Al-Naji from Google, who founded BitShares, and Steemit founder Daniel Larimer.
Lens also empowers our developers to seamlessly integrate applications and create a composable, user-owned social graph where content and followers flow freely between platforms using the protocol.
By building the Cryptonite network on top of a native crypto infrastructure, our members are able to cash in on their influence by earning Cryptonite PRO (CPRO) coins for sharing intelligence and creating positive community activity. Along with fellow SocialFi entrepreneurs, we are betting that private, encrypted social networks with a revenue-sharing (via crypto rewards) model will build more robust and more economically aligned online communities, and the user-as-product model will fade.
In future issues, we will share other SocialFi protocols we are investigating with our members, such as emerging Decentralized ID and reputation protocols. If anyone has any input or partner ideas on the Cryptonite project, you can contact Tony Perkins @ tp@cryptoniteventures.com
VC Whispers—Rolling the crypto in ‘24
VC powerhouse Andreessen Horowitz has invested $100M 😳 in EigenLayer, a restaking protocol built on Ethereum. Restaked ETH can be used as ‘cryptoeconomic security’ for protocols other than Ethereum in exchange for protocol fees and rewards. Existing investors in EigenLayer include Blockchain Capital, Electric Capital, Polychain Capital, Hack VC, Finality Capital, and Coinbase Ventures.
“EigenLayer is a set of smart contracts on Ethereum that creates a two-sided marketplace for raw cryptoeconomic security: On the demand side, it allows creators of custom decentralized services to write code that effectively extends the functionality of Ethereum. And, on the supply side, validators participating in Ethereum consensus — if they happen to have the capacity and required hardware — can opt into running each of those decentralized services by restaking their ETH to them.”
Binance Labs VC arm is investing in Renzo, a liquid restaking token for EigenLayer. Binance co-founder Yi He, who leads the VC group of the world’s largest crypto exchange, says Renzo’s technology enables more users to participate in liquid restaking.
Founders Fund reportedly liquidated its Bitcoin holdings before the cryptocurrency crashed in 2022, generating $1.8 billion in returns. Then, just before the current BTC runup, it bought back $200M worth of BTC and ETH.
Cybersecurity and AI were the top-performing industries for creating new unicorn companies in 2023, despite a challenging fundraising environment with many startups slashing valuations to survive. Morningstar Unicorn Vertical Indexes, Cybersecurity unicorns grew 24%, and AI unicorns grew 23%, with an overall rise in unicorns of 13% (81 new) in 2023, down from 330 new unicorns in 2022.
AI Tracker
A year in development, Apple is aiming to introduce an AI-powered code assistant in Xcode that automatically predicts and completes code snippets for Apple developers. This approach is similar to that of Microsoft’s Copilot, GitHub Copilot, and Amazon’s CodeWhisperer and dramatically speeds up development by easing the process of writing long lines of mundane computer code from scratch.
Meanwhile, over at the OpenAI camp, Sam Altman’s concerns about possible chip shortages have him chatting up Middle Eastern sovereign wealth funds for an eye-watering $5T to $7T 😳 to fund a new venture to develop and manufacture AI chips (GPUs). But raising money from places like the United Arab Emirates raises security concerns, given their ties to China, so Sam has been chatting up the Biden Administration as well.
At one point, it looked like Sam was going to team up with Softbank boss Masayoshi Son to build the super chips, but now it appears that Masa is striking out on his own to develop his own Nvidia competitor. Masa is seeking a mere $100B to build his new venture. SoftBank is putting $30B of its own money in the deal and also seeking Middle Eastern institutional money to fund the other $70B.
Code-named Izanagi, the new venture would have a partner advantage by working with Arm, the chip design company Softbank acquired in 2016 for $32 billion and took public in September 2023 for $54.5 billion.
Between Sam and Masa, we would put our AI chips on Masa—Sam has a lot on his plate and seems a little lost in his $trillion$, which historically is not a good sign 🤔.
Meet Eos: The Supercomputer Powering Nvidia’s AI Breakthroughs
As AI innovation is beginning to impact everything from drug discovery to autonomous machines, AI service companies need a purpose-built AI engine factory behind them. At the center of those factories, you may well see Eros—an extremely large-scale NVIDIA DGX SuperPOD that is currently ranked #9 in the Top 500 list of fastest supercomputers.
Eos is built with 576 #NVIDIADGX H100 systems and NVIDIA Quantum-2 InfiniBand networking and software, providing 18.4 exaflops of AI performance and featuring a total of 4,608 H100 GPUs. NVIDIA just released the video above to showcase its new supercomputing innovation.
On the stock front, Nvidia, one of our picks for 2024, had blowout earnings that smashed Wall Street's expectation—up $265%—and saw a quick downtick followed by a significant uptick. Nvidia is edging back its $2T market cap and reclaiming its #3 most valuable public company spot.
'Accelerated computing and GenAI have hit the tipping point. 'Demand is surging worldwide across companies, industries, and nations.'
—Jensen Huang, CEO, Nvidia
Best on the Block
Another one of our predictions for the year that predicted the acceleration of the tokenization of assets got an affirmation from Citi and Wellington Management. The two firms worked on a pilot simulation with WisdomTree that showed it’s possible to issue and custody tokenized versions of private equity funds on behalf of clients on a blockchain network while remaining compatible with existing bank systems.
Banks like Citi and JPMorgan Chase & Co. have been exploring ways to update their existing infrastructure with blockchain technology for several years, enticed by the features it offers, such as greater transparency and the ability to settle transactions instantly. The project also explored the use of a private fund token as collateral in an automated lending contract with Depository Trust & Clearing Corp.’s digital assets unit, according to Singhvi.
Follow the Crypto
As we predicted in our year-end forecast for 2024, Coinbase is riding the doubling of Bitcoin over the last 12 months, and that lifted the company’s revenue by 41% to $954M and a net profit of $273M in the fourth quarter, up from negative $371M in the previous year. These numbers beat all analyst estimates.
Prometheum is the first SEC-registered broker-dealer and FINRA member who is also approved to be a Special Purpose Broker-Dealer (SPBD) for digital asset securities. The firm is about to challenge the SEC’s thesis that most cryptocurrencies are securities by launching a custodial service for Ether as its first digital asset. Ether is the native cryptocurrency that facilitates transactions on the Ethereum blockchain and has achieved a $280 billion market cap—second only to Bitcoin.
After the approval of the Bitcoin ETF, the price of Ether spiked to its highest level since May 2022 in hopes that an ETF for the token might be given the green light next. The agency is due to make decisions on spot ETH ETF applications beginning in May. BlackRock, Invesco, Ark, Galaxy, VanEck, and Grayscale are among the firms waiting for approval.
Straight outta Silicon Valley
Zuck said last week that the Meta Quest 3 mixed-reality headset was ‘better than the Apple Vision Pro, period.’ At $3,500, the Vision Pro costs 7x more than the Quest 3, but Zuck says the Apple goggles can’t play virtual-reality games, exercise, and socialize with people like his goggles. He also bragged about ‘Quest’s lack of wires, lighter weight, wider field of view, and brighter screen.’
The Meta Quest 3 does have a vast gaming library and mixed reality experiences, which, along with its much cheaper price tag, makes it more accessible to a broader audience. On the other hand, the Apple Vision Pro is positioned as a more premium and professional device, focusing on innovation and offering stunning visuals.
Our own stated view is that we will all move to the Vision Pro hands-free form factor, which will transform the next chapter of personal computing. During this transition, we will finally be substantially freed from our laptops and iPhones and operate a more convenient life with more movement and less sitting. Apple has been working on these goggles since at least 2007, and there is a comprehensive innovation advantage.
All this said, it’s better to wait for future versions before you buy after the weight and cost of the headset go down and the app selection is more refined. Check out some insightful first reactions and reviews to Vision Pro by long-time Apple early adopters.
Why the Vision Pro costs so much
The Vision Pro starts at $3,499 and can cost as much as $4,500 because it includes lots of state-of-the-art parts. Omdia puts the ‘bill of materials’ for the headset at $1,542, with the most expensive part of the headset being the two 1.25-inch Sony Semiconductor displays (one for each eye) that help the virtual experience feel more realistic. Apple pays about $228 for the ‘Micro OLED’ displays, which is the latest example of Apple embracing a new kind of display technology.
Know Thy Enemy
In a stunning, 9-minute YouTube address below, Russian opposition leader Alexei Navalny’s widow, Yulia, accused President Vladimir Putin’s regime of poisoning her husband with the nerve agent Novichok while he was in a Russian prison in a remote Arctic penal colony in Siberia, known as the ‘Polar Wolf.’
Meanwhile, back in Moscow, Boris Nadezhdin, an anti-war candidate, has been barred from running against Putin in the 2024 Russian presidential election. The Central Election Committee (CEC) of Russia stated that Mr. Nadezhdin had only collected 95,587, just shy of 5,000 less than the 100,000 benchmarks required. 🤔
Recent reports from Microsoft and OpenAI have revealed that nation-state actors, including those associated with Russia, China, North Korea, and Iran, are experimenting with artificial intelligence (AI) and large language models (LLMs) to enhance their cyber attack capabilities. Read the top 10 findings from this report here.
Chaos & Complexity
Former Home Depot and Chrysler CEO Bob Nardelli is warning that the US economy is not on a fast track to recovery as higher inflation and more mass layoffs loom over markets. ‘If you look at chips, they’ve laid off almost 40,000 people. We’re seeing a tremendous shift in employment out there.’ A Challenger, Gray & Christmas report found that companies planned 82,307 job cuts in January, a substantial 136% increase from the previous month and down about 20% from the same time one year ago. The price of everyday goods, including gasoline, groceries, and rent, rose 0.3% in January from the previous month, more than expected.
What the Math Says
A new annual government poll that tracks how people in the US spend their time shows that from 2003 to 2022, US men reduced their average face-to-face socializing time by 30%, with unmarried Americans experiencing a decline of 35%, and teenagers in-person socializing dropped an astounding 45%. Read below to learn why this anti-social trend is at the center of our national depression epidemic.
Pura Vida (pure life)
Your love hormone—called oxytocin—is released into the bloodstream when we enjoy intimacy with others, hug our pets, listen to music, and give birth, and the benefits are extraordinary, says the good Doctor Frank Lipman, MD. The benefits of oxytocin include improving depression and anxiety, enhancing trust and social bonding, and sexual and gut health.
A new study by researchers at the University of Limerick in Ireland and Iowa State University confirms the benefits that impact resistance exercise training can be a critical behavioral treatment approach for anxiety and depression.
Current Wisdom
"I discovered in my research that nearly every war that has started in the past 50 years has been a result of media lies. And the media could have stopped it if they had searched deep enough— if they hadn't reprinted government propaganda. What does that mean? Basically, populations don't like wars, and populations have to be fooled into wars. Populations don't willingly and with open eyes go into a war. So if we have a good and equitable media environment, we will have a peaceful environment."
—Julian Assange, Australian editor, publisher, and the founder of WikiLeaks.
