When the truth depends on your POV
In this issue: Elon tweeting, crypto freefalling, Bitcoin consuming, Google chatting
Google shows off its new AI language tool & so much more
Google has just wrapped up their annual developer conference, called I/O.
This is where they showcase their latest innovations and developments to the world. The star of the show was their new natural language processing tool that uses artificial intelligence trained on actual dialogue.
Called LaMDA, the new AI language tool is different to what went before.
The AI in LaMDA can pick up conversational nuances that are unique to an open-ended conversation (a bit like auto correct can anticipate the word you want from just the first few letters).
Google have built the tool to create a chatbot conversation experience that appears to be more human than computer. To demonstrate LaMDA in action, they got it to pretend to be Pluto. 🤔
In an unscripted conversation, Pluto (played by LaMDA) was asked what they wanted people to know about them.
Pluto answered: “I wish people knew that I am not just a random ice ball. I am actually a beautiful planet.”
(Although technically speaking, I think LaMDA should have said dwarf planet, but that’s splitting hairs!)
Other notable announcements include;
On Google Search
option to erase your last 15 minute of Google queries so that nobody can see what you were just looking for?
ability to upload close-pics of your skin and Google’s AI dermatologist will figure out what that mole is
For Google Photos
password protect sensitive photos in a locked folder
machine learning will “join” 2 similar photos together to create an animated picture 👇👇👇👇
World’s 1st Commercial-Grade Quantum Computing
Google are investing billions in developing a commercial-grade quantum computer by 2029 (a subject we covered back in March in this WiserIn5! special).
Watch the keynote presentation in its entirety to get a feel for the direction of travel and innovation at Google (aka Alphabet Inc).
CryptoCorner
Reality of sentiment driven cryptocurrencies hits home this week
Bitcoin and the crypto market has been in free fall this week. After hitting a high of $65k a month ago, the price of Bitcoin dropped to $30k this week, before rallying back to c$40k as I put this newsletter to bed.
It’s not just Bitcoin, all the major cryptos are down over the past 7 days. Ethereum has dropped -25%, Binance -30%, Cardano -5% and Polkadot -26%.
Intriguingly, Dogecoin has held up pretty well. Which is not bad considering it was created as a joke coin and still has no utility. It has as much value as a casino chip.
Whilst the majority of headlines have focused on the fall in prices this week, the real question, IMHO, is how did they get so high in the first place.
We seem so far removed from “fundamentals” that the whole crypto market is based on “sentiment”. Which is great…until the mood changes.
So, what triggered the bad mood this week?
For many, the finger of blame was pointed at China after Reuters reported a Bitcoin clampdown.
However my sources in China tell me that this report is misleading. The article misrepresented the statements of 3 trade bodies as though they are from the Chinese government themselves.
So, if not China, who do we point the finger at? Who else, but Elon!
The catalyst for the sell-off was a (simple) tweet by Elon Musk on 12th May. That is all it took for the sentiment to shift from Buy to Sell.
And remember, it was a (simple) tweet from Elon in February that accelerated an already overheated bull market for crypto, leading to Bitcoin’s all time high of $65k.
Why did Elon’s Tweet trigger the markets?
First, it was an about turn in being able to buy, then not being able to buy a Tesla with Bitcoin. All in the space of 8 weeks. This weakened confidence (sentiment) in Bitcoin.
Make your mind up Elon!
Second, Elon cited the reason as the “rapidly increasing use of fossil fuels” and concerns over CO2 emissions from Bitcoin mining.
As an aside, Elon also heads up SpaceX. I found this geeky analysis that calculated each SpaceX rocket launch produced the equivalent of 395 transatlantic flights worth of CO2 emissions.
Double standards from the Doge Father?
The reference to “fossil fuels” was noteworthy because the high power consumption demands from Bitcoin Mining is a subject that has been largely overlooked and ignored just about everyone else in the past (some might say that the 29,643% lifetime ROI for Bitcoin has something to do with that, but I couldn’t possibly comment! ).
Note: if you’re wondering why it matters, electricity accounts for approximately 40% of the cost for Bitcoin mining operations.
The bottom line is that the high prices for crypto are held up by sentiment. Not by the utility that each cryptocurrency represents.
This is why we will continue to see high levels of price volatility in the crypto market.
Now, by complete coincidence, the next Reader Question happens to be about this very subject….queue next article. 👇
Reader Question
The reader question this week comes from Patrick in Hampshire, UK. He asked us: “I read that Bitcoin mining uses the same amount of electricity as The Netherlands. Is this true and what is the real impact of Bitcoin on the environment? And, as the number of new cryptocurrencies keeps on rising, aren’t we just creating a problem for tomorrow?”.
Understanding the cost of Bitcoin mining
To get to the bottom of this, I went digging for data. And what I found is that there are two very different perspectives on this matter.
Quelle surprise! (written in a French accent).
But first, it is worth noting that energy consumption is not the same as carbon emissions. Simply comparing the energy of a small country with the consumption of Bitcoin mining makes a great headline but is misleading to the story.
In the Red Corner
The data points the finger at China, where 79% of global Bitcoin mining occurs.
This report in Nature Communications has a detailed analysis of the largely fossil fuelled, energy hungry Bitcoin mining operations in China (a nation that generated half the world’s coal powered energy in 2020).
It concludes that Bitcoin mining in China alone could soon generate as much carbon emissions as some European countries.
In the Digiconomist, which is believed to be the source for Elon’s about turn tweet, they maintain the Bitcoin Energy Consumption Index.
The Digiconomost provides a breakdown of the environmental impact of mining for Bitcoin compared to traditional payment systems and even mining for gold.
Bitcoin is often referred too as a digital version of gold. According to Digiconomist, on a like for like equivalent basis, Bitcoin mining produces 10x more CO2 than mining for gold.
In the Blue Corner
Cathie Wood’s Ark Invest argue that “concerns around Bitcoin’s energy consumption are misguided. Contrary to consensus thinking, we believe the impact of bitcoin mining could become a net positive to the environment.”
The point that Ark make is that it is the very high demand from Bitcoin that is driving the innovation into renewable energy sources.
Such as hydro electricity.
According to this report about Bitcoin energy use in Harvard Business Review, “in the wet season in Sichuan and Yunnan, enormous quantities of renewable hydro energy are wasted every year. In these areas, production capacity massively outpaces local demand, and battery technology is far from advanced enough to make it worthwhile to store and transport energy from these rural regions into the urban centers that need it”.
In this Dec 2019 report, it was estimated that 73% of Bitcoin’s energy consumption was from carbon neutral hydro power, the predominant source of electricity in major mining hubs in Southwest China and Scandinavia.
Last year, this University of Cambridge report suggested that the true figure was half that at 39% (which is still twice the rate of renewable energy of the whole of the USA).
I’ll leave it for you to make up your mind whose corner you’re in!
In the meantime, let’s ask ourselves….how does the State of New York use 25% more electricity than the whole of Norway?
Snippets of Insight and Information
Apple declare “significant malware” on Mac
Apple made the surprising admission this week in the Apple v Epic Games court case over the App Store fees (see this issue of Wiser!). Despite having used the “security of Mac over PCs” as a key marketing tool, Apple announced that they identify new malware every week. (Watch this classic Apple ad from a decade ago.)
In defending the 30% App Store fees, Apple’s argument is that they have a built a safe and secure environment for developers. And their point is that even Apple are vulnerable to attack. So, any reduction in the fees would lead to a weakening of this safety net. Source: CNET (or listen to an audio version here)
p.s. star witness Apple CEO, Tim Cook will take the stand later today as this 3 week trial comes to a close.
$2.8m highest bid so far for 10 min space flight
Jeff Bezos is the founder of Amazon and the world’s richest man. He is also the founder of space flight company Blue Origin. To promote their space tourism service, Blue Origin are selling a 10 min space flight through a Live auction on 12th June.
In the run up to the Live event, unsealed bidding is taking place and the highest bid is currently $2.8m.
This 10 minute journey into space will launch a month later on July 12 from the desert in Texas. It’ll involve an exhilarating ride aboard Blue Origin’s New Shepard rocket to the Kármán line 62 miles above Earth, the point generally considered the edge of space. Source: Blue Origin
Deepfake tech making dubbed shows look better
In the subtitle v dubbed debate, it seems that dubbed movies are winning. Netflix found that viewers are more likely to watch a dubbed version of a movie even though they say they prefer subtitles when asked which they prefer (nowt as funny as folk!).
London-based AI startup Flawless says its deepfake tech can make dubbed films look more natural. Although not 100% perfect, the deepfake tech corrects the mouth movements of the actor to the dubbed audio. Source: The Hustle
Do you know what a “Super App” is?
The concept of a "super app" is not widely understood. Unless you live in China, where the entire population use WeChat and Alipay for everything. Imagine taking the 20 or 30 things you do the most on your phone, and putting them all into a single app. It would be like opening WhatsApp and using it to send money, buy groceries, book a haircut, check share prices and get the latest weather forecast. As well as speak to your friends!
In this article, Fintech expert (and my friend) Efi lists 6 of the best “super apps” outside of China. Source: Efi Pylarinou
This Robot Builder won't keep stopping for a cuppa!
Meet HRP-5P, the robotic labourer. Built by Kawada Robotics and Japan’s National Institute of Advanced Industrial Science and Technology, the Robot Builder has head-mounted sensors and motorised, flexible joints.
This allows the humanoid robot to pick up and position wall panels weighing up to 11kg, before screwing them in place. Source: Wired
Computer chips have a unique atomic fingerprint that could prevent cybercrime
Billions of “identical” computer chips are manufactured each year. However, they are so small that built in methods of identification is luxury they can’t afford. That’s why we have layers of software and biometrics to confirm our identity and protect us from bad people.
But it seems that each individual chip has microscopic variations in the way the atoms arrange themselves within each transistor. Now, London based Crypto Quantique (cool name!) have developed a solution.
Using a technique called "quantum tunnelling", they can identify these atomic variations to create a unique “atomic fingerprint”.
This means that your phone or computer can be identified as your phone or computer by the chips within it, removing the sole reliance on hackable passwords or deep faked biometrics. Source: Sifted
Read, Watch, Listen
Read
I don’t usually blow my own trumpet, but this week’s Read is all about Me! Me! Me!
Insly, the insurance software vendor, asked me 5 questions about the future of insurance. This is what I had to say. Source: Insly
Watch
It you’re an Apple aficionado like me, you’ll love History of the iMac. This short video charts the evolution from the G3 to today’s M1. Source: Apple Explained
Listen
Are You A Robot? is a twice weekly podcast exploring the big ethical issues that stem from the use of AI and related technologies. Source: AreYouARobot?
Ways that you can support us
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Thanks for reading…till next week, Rick
Remember: Insight and Information gives you Leverage!
Actually the real question regarding consumption is how the country of Norway consumes 75% as much electricity as the State of New York despite a population only 28% of the size.