Vegas picks Zuck over Elon, China leads gov't crypto race, Google Marxism, AI meets Tinder, billionaire bets for Prez, Sheryl leaves Zuck in the metaverse, and other precious nuggets...
The Bitcoin founders did it, and China's doing it. Where is the USD global digital currency?
Bonfire of the Vanities redux
The Wall Street money-changing honchos embedded at the US Treasury are in full-on passive-aggressive mode. They are trying to hold onto their money and power with the edge of their fingernails. These fine folks have spent their whole careers standing in the middle of transactions, paying themselves usurious fees 10x+ the annual salaries of the CEOs they represent to make a few investor calls. The biggest business in the world today is the $7 trillion a day currency trading, one dominated by the eleven largest banks.
Bitcoin, CBCDs, and the blockchain are the biggest threats to money institutions. Hence the slow-walking on a US central bank digital currency (CBDC). But it's a lost cause. The decentralization movement driving Web3 innovation will drive the broker-dealer business into extinction. Rather than champion innovation efficiency and broader distribution of wealth, the US government is conspicuously absent from the cryptocurrency table to our peril. The Chinese Communist Party’s e-CNY and crypto wallet is now the leading digital token issued by a global central bank on the planet.
In this thought piece, we propose two initiatives to strengthen and restore faith in the US dollar, successfully compete with the yuan, and allow us to live more simply and privately:
Begin replacing physical currency by minting digital US dollars that any person with a crypto wallet can instantly buy, trade for, sell, or privately own and store.
Return the US dollar to the gold-backed currency standard to remain competitive with Bitcoin and other government-issued and private-market cryptocurrencies.
None of the current Presidential candidates support these two initiatives. Only Bobby Kennedy, Jr. supports returning to a precious medal-based USD.
George Gilder’s current wisdom on Google Marxism and why we have nothing to fear about AI and this utopian fantasy
“Google epitomizes the Web2 cloud computing era. From the day Sergey Brin and Larry Page came up with the PageRank search engine algorithm, they went on to help establish data warehousing, machine learning, and AI, and, by applying their information science knowledge to genetic codes and DNA, Google also reached into regenerative science and medicine.
The problem is the Google system of the world has no ground state. That is why blockchain and related cryptographic discoveries and distributed storage represent the roots of a new economy and world system that will replace the cloud computing paradigm Google helped build.
Karl Marx’s great error was his belief that all the great inventions during the industrial revolution, the steam engine, the dark Satanic mills, the loom, and other developments of his era represented a final eschaton. Discovering the means of producing wealth was over, and the future focused on the ‘fair’ distribution of wealth. Google is making the same error.
Google Marxism says that gene learning, AI, robotics, nanotechnology, and cloud computing are the ultimate thing, the great 'Singularity,' as their director of technology, Ray Kurzweil, calls it. Google aims to build the ultimate machine mind that eclipses human minds and allows us all to retire to beaches while Sergey and Larry fly off to nearby planets with Elon Musk in a winner-take-all universe!
I agree with VR inventor Jaron Lanier that AI makes you dumb. It's a symbol-based system that can't think. It can shuffle symbols at gigahertz speed, but ultimately the map is not the territory, and you always need an interpretant between the two. AI helps human brains, but you still need human minds to interpret the map. One human mind, which would take a zettabyte to map, is far more complex than the connectome of the entire global Internet. And the human mind only operates on 12 to 14 watts of power, and the Internet takes gigawatts, maybe all the way to terawatts of power.
AI is not a threat. It is one more great leap in innovation. AI makes people more productive and, thus, more employable. It is not something to fear.
—George Gilder, economist, futurist, and author, Life After Capitalism, 2023; Life After Google, 2018; and Wealth & Poverty, 1980.
Did you know?
(Overheard on the streets of the global Silicon Valley—Got any hot tips?)
The Billionaire Boys Club
Zuck is running as a -160 favorite, with Musk at +140 odds. Elon says his 'fight' against Zuck will be live-streamed on X, with all proceeds going to a charity for veterans. The proposed location is the UFC Apex in Nevada, but the date of the match has yet to be set. Zuck and Elon are training for their caged bout.
Not so awesome. Zuck revealed on social media that he built an octagon to train for his super fight in his backyard, to the dismay of his better half, Dr. Priscilla Chan. He shared his WhatsApp message text with the good Doctor.
Zuck may be the killer in the cage, but his 'Twitter killer' Threads struggles to retain active daily users whose numbers plunged a staggering 81% to 8M. Threads was the fastest-growing app ever after its July launch but has struggled to keep momentum and lags way behind Twitter's 100M daily users.
VC Whispers
Peter Thiel's Founders Fund led a $280 million investment round in Neuralink at a $5 billion valuation. The startup, often the fodder for conspiracy theorists, was cofounded by Elon Musk and is developing brain computer-interface technology that can be implanted in the human body.
Steve Jobs' son Reed Jobs, 31, starts Yosemite VC fund to invest in new cancer treatments inspired by his father’s early death from pancreatic cancer in 2011. 'I had never wanted to be a VC, but when you’re incubating something, you can make a tremendous difference in scientific focus,’ he says.
Venture capital is suffering even as the US stock market is surging. Investors are becoming cynical about startups and the venture capital firms that fund them. Overall, VC funds raised $28 billion in the first half of 2023 compared to $158 billion and $168 billion raised in 2021 and 2022.
AI on the March
Match Group, owner of dating apps Tinder, Hinge, and OkCupid, will offer an 'AI-enabled photo selection tool' to automatically select your five best photos for your dating profile. The move is reportedly designed to appeal to the platforms' younger generations of users like Gen Z.
‘Mind-reading’ AI. Researchers from Google and Osaka University have developed a tool called Brain2Music, which analyzes brain imaging data from people listening to music and produces AI-created songs that match the genre, rhythm, mood, and instrumentation subjects were listening to.
During Apple’s upbeat quarterly earnings announcement, CEO Tim Cook reaffirmed that AI and ML are ‘core to virtually every product we build," Mr. Cook also reported, ‘We've been doing research across a wide range of AI technologies, including generative AI for years.’
A recent Pew Research Center survey finds that many US workers in AI-exposed industries do not feel their jobs are at risk, and AI is more likely to help than hurt them. For instance, 32% of IT workers say AI will help more than hurt them, compared with 11% who say it will hurt more than it helps.
Going Green
Electro-desalination membrane manufacturer, Membrion raised $12.5M in a series B round that included Samsung Ventures and Lam Research's venture group, Lam Capital. Membrion manufactures ceramic desalination membranes that can recover up to 98% of water in the harshest conditions.
Ethereum infrastructure company Flashbots raised approximately $60 million at a $1 billion valuation led by crypto-focused VC Paradigm. The company's decentralized platform for maximal extractable value (MEV) helps network operators extract profit by previewing blockchain transactions.
Follow the Crypto
PayPal became the first major US financial company to launch stablecoin tied to the US dollar. PayPal USD is issued on Ethereum by Paxos Trust Co. Customers who purchase PayPal USD will be able to transfer the stablecoin between ‘compatible external wallets’ and PayPal.
The US Department of Justice is considering fraud charges against crypto exchange Binance but worries an indictment might cause a run on the exchange similar to FTX and cause another crypto panic. Other options, such as fines and deferred or non-prosecution agreements, are being considered.
Presidential candidates are a no-go on CBDCs. RFK, Jr. opposes central bank digital currencies (CBDCs) because they are ‘instruments of control and oppression, and are certain to be abused.’ Gov. DeSantis says US CBDCs ‘will not see the light of day if he gets elected.’
Meanwhile, China's digital yuan transactions hit 1.8 trillion yuan ($250 billion) by the end of June 2023, reported their central bank governor Yi Gang, marking a jump from over 100 billion yuan as of August last year. These numbers solidify China's position as the leader in CBDCs.
Into the Metaverse
Disney metaverse chief Mike White who was charged with Disney’s Web3 efforts in February 2022, says Sayonara. Disney closed its Metaverse division in March as part of efforts to reduce headcount. The unit aimed to find ways to tell more immersive stories using Disney’s extensive film and TV libraries.
Lean in and lean out. Zuck's No. 2 for 14 years, Sheryl Sandberg, 'was just done' with the Karate Kid after he decided to pivot away from FB's social media franchise and toward the metaverse. Zuck poured billions of dollars (13.7B in 2022 alone) into the metaverse with little to show,
What the Math Says
Uber’s loathed ‘surge pricing’ even gave its CEO, Dara Khosrowshahi, sticker shock. Wired editor-at-large Steven Levy took a 3-mile Uber from downtown Manhattan to the West Side and paid $51.69 for the trip. ‘Oh, my God. Wow!’ said Mr. Khosrowshahi when Mr. Levy showed him the receipt.
A father-of-three lost his life savings, home, and wife after he was 'fattened up' with a fake relationship and then 'butchered' by fraudulent investment advice. A record $2.57 billion was lost to cryptocurrency 'pig butchering' in 2021, says the FBI, three times the amount stolen in 2021.
The amount of office space in the US is declining for the first time in history. Less than 5 million sq. ft. of new office space has been constructed in the US this year, while 14.7 million sq. ft. have been removed to make way for other types of buildings. The era for large office spaces is officially over.
Know Thy Enemy
CCP is accused of 'hostile activity' in the US after the bust of an illegally run Chinese 'bioweapons' lab in California genetically engineering mice and experimenting with HIV, herpes, and malaria. FBI Director Christopher Wray has confirmed a lab in Wuhan, China, likely leaked the COVID pandemic.
AI helps President Xi prepare China for ‘extreme’ scenarios. Chinese scientists have demonstrated AI-powered drones and hypersonic missiles with unparalleled accuracy and range that can also anticipate conditions such as weather or enemy fire and adjust their trajectory in mid-flight.
Kyiv had planned to remote-pilot a drone to deliver a strike on a Russian navy ship at a Black Sea base in occupied Crimea, but Elon Musk wasn’t up for it. He denied the Ukrainian military use of SpaceX’s Starlink terminals, maintaining the satellite network must only be used for 'peaceful' purposes.
Entrepreneurial Huddle
IPO is not the end-all. From 2022, 59% of the IPOs between 1975 and 2018 had negative returns over the first three years; 37% were down 50% or more. Their average three-year return was 17.1 percentage points lower than the overall US stock market return.
Prince Harry’s first foray into Cali-style startups as ‘chief impact officer’ of BetterUp, an OnlyFans for ‘life coaches’ once valued at $4.7B, laid off 16% of its staff this week. BetterUp’s value plummeted below $1B, and aggrieved employees say ‘Harry’s juice wasn’t worth the squeeze’ (i.e., 7-figure salary).
Straight outta Silicon Valley
Zoom’s boss Eric Yuan wants everyone within 50 miles of the company in the office at least two days a week. The Silicon Valley-based company saw its shares skyrocket 6x in 2020 during the pandemic, only to plummet to $100 billion by the end of 2021. Only 2 percent of Zoom’s employees work on-site.
Is the loss of Steve Jobs's innovation instincts finally catching up with Apple? Apple's market cap plunged $140B and 'lost its title as the only $3 trillion company in the world in a day after the company warned of iPhone sales slowdown, as Samsung and up-and-coming rivals grab market share.
Apple pins its hopes on the iPhone 15 Pro intro next month to get back on the cool track. The new device will feature an all-screen design that Apple has been working on for years, significant camera upgrades, the powerful A16 chip, a transition to USB-C, and titanium edges.
Google unloaded 90% of its shares in the trading app Robinhood, a stake worth $419M in August 2021. Robinhood, known for its commission-free trades and easy-to-use interface yet to regain its footing after a big boost during the pandemic. Alphabet also trimmed its positions in Duolingo and 23andMe.
Chaos and Complexity
A study found that half (49.3%) of all TikTok videos are negative ageist stereotypes about baby boomers insinuating that Gen Z and millennials can’t relate to their elders. ‘Boomer-blaming’ includes suggesting older people wrecked the economy and the environment and treat young people poorly.
Touché! Gen Z fears becoming ‘the next cringe generation’ after Gen Alpha (born in the 2010s) post memes, making them feel old and out of touch. Gen Z finds the YouTube animated series Skibidi Toilet featuring toilet-like creatures taking the world, the most disturbing and indicting of their generation.
Revive Thyself! (or not)
Five minutes of sweaty household chores can reduce the risk of specific cancers by as much as a third. An Australian study tracked the movement data from over 22,000 "non-exercisers" wearable devices for 7 years. It's called vigorous intermittent lifestyle physical activity (VILPA). Get on it!
Boozing women on the rise. A new study analyzed 606,000 deaths linked to alcohol between 1999 and 2020. While men historically have been more than twice as likely to die because of alcohol, the study showed men’s mortality rate increased by 12.5%, while the female rate spiked by 14.7%.
Facial analyst claims humans are 'becoming LESS attractive' with every new generation, thanks to modern diets, sleeping patterns, pollutants, and orofacial habits. There is now a greater inequality in ‘the attractives’ vs. ‘the unattractives’ [sic].
Worth noting: ‘Everyone looks better on a film camera compared to an iPhone; it brings out the features and makes a face look more defined,' says the same analyst.
Flashback Interview
Sequoia Capital’s Michael Moritz on the way up 30 years ago today
Mr. Moritz joined Sequoia in 1986 after a career in journalism. In 1993, he was still hitting his VC stride, and before he went on to seed-fund Yahoo!, Paypal, Google, YouTube, Zappos, and a dozen other mega-hits.
By Anthony Perkins
November 1993 issue of Red Herring
Perkins: When you look across the venture capital landscape, what are Sequoia Capital's competitive advantages?
Moritz: We have a very tight focus on making sure there is a sizable market opportunity in front of us before we make an investment. We are much more focused on the market growth potential and the ability of a company to reach a market successfully and profitably. As a firm and individually, we have also demonstrated the ability to get companies off the ground with a small amount of fuel. We like to start wicked infernos with a single match rather than two million gallons of kerosene. This is clearly a differentiated way of getting a company put together. This approach has terrific benefits for the people who start the companies and for all of our limited partners. You might say that we have a morbid fascination with our ROI, as opposed to the amount of dollars we put to work. And this is a very, very, very different message than you get from a lot of other venture firms.
Perkins: Our observation is that there is a relationship between the amount of equity capital a technology company requires to get off the ground and the prospects for the company's success. Basically, the more money a company needs, the less likely it will be successful. Would you agree?
Moritz: Yes, I think that's true. There are few exceptions where we have felt or were convinced by others that there was a real need to spend money because everyone was afraid that if the company's product didn't quickly make it to market, its window of opportunity would evaporate. That would be about the only way we could get coaxed into investing more rather than less money into a company. We are big believers in the notion that lesser is better. This approach forces companies to be more disciplined -- they are hungrier, and they worry about how they spend pennies. Frugality is a real virtue. And that attitude starts around here. We save paper clips.