Dear Reader,
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology. Today, I’ll do my best to answer them.
If you have a question you’d like answered next week, be sure you submit it right here.
And before turning to today’s questions, I’d like to thank readers once more for attending my “Washington D.C.’s Mandated Money” event this past Wednesday evening.
“Mandated” profits may sound too good to be true. However, these deals are offering as much as $2,300 up-front. That’s a built-in gain right there.
And over the long term, these deals can result in profits up to six figures. That’s because they enable us to invest in exciting companies while they’re still private.
I know we’ve all been feeling the pain as markets have sagged in recent weeks… yet that’s why these investments are perfect for our present moment.
And it’s why I am determined to share exactly how they work with my readers this week.
If anyone wasn’t able to attend on Wednesday, please check out the replay right here.
Let’s begin with a question on Tesla’s self-driving cars…
Hello, Jeff, et al. I have a question about Tesla’s “accidents” reported in the news this past week.
The report I heard was that Tesla’s vehicles have had multiple accidents that involve running into parked vehicles on the side of the road due to some type of emergency. I don’t remember how many Tesla vehicle accidents were reported, but there were “several.”
The news report didn’t go into a lot of detail, and I expected to hear more about it through additional reporting. However, I haven’t heard a peep about it since. So I have a few questions.
First, have you heard anything about this? If so, do you know how serious these accidents/reports are? And lastly, how do you see this affecting not only the company as a whole but also its stock price?
I am a Brownstone Unlimited member and love being involved with all your products. Thanks so much for everything you do for us!
– Roger R.
Hi, Roger, and thanks for being an Unlimited member and sending in your question. This topic requires some nuance…
Last June, the National Highway Traffic Safety Administration (NHTSA) announced that it would require car companies to begin reporting crashes involving autonomous vehicles (AVs) and advanced driver-assistance systems (ADAS).
That’s the reason for the reporting you recently saw. The NHTSA recently released its first reports explaining the data it has received on accidents and crashes involving these cars.
Big picture, these reports will be a good thing. They’ll provide clear data for us to evaluate the safety of these self-driving and ADAS cars… and ensure transparency in the industry.
Yet we also need to take them with a grain of salt at present. The NHTSA itself has said we don’t yet have the context needed to identify trends. And it cautioned that this incomplete data shouldn’t be used to draw conclusions about safety.
For example, the report shares that 70% of crashes occurred in Tesla vehicles. Out of 392 crashes, Teslas topped the list with 273 accidents.
On the face of it, this sounds terrible. But this data doesn’t account for how many vehicles are on the road with this technology, the distance traveled, or the time of use.
Tesla, in this case, almost certainly has the most self-driving cars on the road of any of the reporting companies. Roughly 830,000 Teslas offer ADAS or full self-driving (FSD) capabilities. Compare this to GM’s 34,000 cars.
So it’s completely normal for Tesla to report a higher rate of accidents with so many more cars on the road.
What will be more informative is how this data evolves over time. That will give us the needed context to understand how the safety of these cars improves and which car manufacturers produce the best vehicles with these systems.
Ultimately, I would be shocked if Tesla doesn’t come out on top. Its FSD technology is the most advanced technology currently in use in production vehicles, and it has billions of miles of roadway experience.
With every day that passes, Tesla’s AI supercomputer, the Dojo, ingests more data with which it continuously trains and improves its autonomous driving software. And then Tesla pushes out updates to the software over the air to its customers’ cars to be upgraded.
No other technology company comes close to what Tesla is doing right now. Because it has such a lead in electric vehicles enabled with autonomous driving software, no other company has access to the data set that Tesla has either.
There is also one final nuance that is worth considering…
We’re at an awkward time right now in the industry. We’re not quite at the stage where we have fully autonomous software that would allow us to lay back and take a nap while we travel to our destination. Yet the technology at times feels good enough to do so.
Consumers who use Tesla’s FSD capabilities are always instructed to stay alert and be ready to take over the car… But there are always those who get complacent and overconfident in the software. I’m not surprised that with so many FSD vehicles on the road, there are a few fender benders.
Tesla is first and foremost one of the world’s leading artificial intelligence companies. It just happens to be that its AI runs on cars and trucks.
This is an incredible competitive advantage compared to not just any automotive manufacturer, but also to other technology companies.
This will be a big year for Tesla. It’s taking its AI and adapting it for the purpose of making an “intelligent” bi-pedal robot that can be used in both residential and commercial settings.
I believe Musk and his team are really going to catch the market off guard by demonstrating some incredible robotic technology powered by AI, and yet again defining an entirely new industry.
I remain very bullish on Tesla, but I must caution subscribers on the valuation. Even with the current market correction, Tesla is richly valued.
And we’re still in a very uncertain and volatile market with the actions of the Federal Reserve and the suggestions that there will be a “second” pandemic. There are certainly some strange things afoot.
These are not normal market conditions, so I would caution against richly valued companies right now.
With all that said, investors might have an opportunity to purchase Tesla again at an attractive valuation due to all this market volatility. If given a chance, this would be a company to hold for the long term.
Next, a reader wants to know more about non-fungible tokens (NFTs) and the “greater fool theory”…
Hi Jeff,
Could you please explain to us all why Bill Gates is wrong regarding the “greater fool theory?”
At this time, NFTs can be stolen as even the link of the image that is registered might point to nowhere if the underlying image is changed on the server (what can stop that?).
Once NFTs have uses beyond imagery, then, of course, there can be real value. At this point, NFTs appear to have the same value as paintings. They have no intrinsic worth. Just like a Rembrandt painting has no intrinsic worth *except* what the “people” ascribe to it.
– Gordon E.
Hi, Gordon – thanks for sharing your question. I’m sure you’re not the only one wondering about this, so I’m happy that you asked. And the NFT market is also not immune to the current volatility in the digital asset markets.
For anyone who missed it, Bill Gates criticized NFTs at a recent conference, claiming they are based on the “greater fool theory.” In essence, this theory holds that as long as there’s someone out there willing to pay more for something than you did, you can still make money even in a bubble.
Gates, of course, has been a longtime crypto skeptic, so it’s no surprise to hear these comments, especially as the prices of NFTs have dropped from their highs alongside cryptocurrencies.
And on the surface, his take may sound like a compelling argument. Certainly, there’s an element of truth to this in regard to NFTs that are purely digital art. Aesthetic value is in the eye of the beholder, whether it’s a Bored Ape or a Rembrandt.
You are correct, NFTs can be stolen, just like a Rembrandt can be stolen. However, almost always, any stolen NFT is the result of the NFT holder not securely managing their asset (the NFT).
Holders of NFTs that decide to self-custody their NFTs really should understand what they are doing in order to keep them safe. Otherwise, they should use a reputable platform that will custody their NFTs for them.
Yet I’ve long argued that there is already much more to NFTs than the media gives credence to. Art is just one aspect of these digital assets.
For one, NFTs offer a way to prove ownership. In the case of art, NFTs can enable artists to automatically receive royalties every time their work is sold (or resold). In that way, great work is rewarded and can generate more income for the artist.
Additionally, we’re increasingly seeing NFTs represent physical assets or provide real-world benefits. We’ve written about this “digi-fizzy” trend many times in The Bleeding Edge.
This can look like a band’s new album release being linked to an NFT, as well as special VIP fan perks for NFT holders. Or it can appear as luxury brands like Gucci and Prada using NFTs to sell limited-edition merchandise like sneakers or handbags.
NFTs also enable the play-to-earn trend, where NFT games pay out incentives for players as well. And back in February, a real estate startup even used an NFT to sell a house in Florida at auction.
As we can see, NFTs already have a wide variety of use cases… There’s not just one kind of NFT out there. And the services and products they provide are real sources of intrinsic value.
These aren’t theoretical use cases… they have already happened. They haven’t hit the mass market yet, but over the next few years they will become very common.
And while there’s been similar skepticism about metaverses, NFTs will play a critical role as these virtual worlds gain traction. They will enable us to transact and own virtual property in these worlds with ease. That will provide a whole new use case for the technology.
So regardless of what Gates claims, I’d say all that puts us beyond needing a “greater fool” to make NFTs worth something.
And one final point… Bill Gates became one of the wealthiest people in the world entirely based on Web 2 technology. And most of his wealth is still tied up in Microsoft.
We should remember that blockchain technology and Web 3 represent a threat to Microsoft and therefore the majority of his net worth. Is it such a surprise that he is making an effort to downplay and even disparage these technologies?
Let’s conclude with a comment about a recent development in nuclear fusion…
Mr. Brown, I enjoyed your recent article concerning Moore’s law and the quelling of skepticism towards future advancements in technology.
Since your article also mentions Avalanche Energy and its ion trap fusion reactor, I would like to add that it is not really theoretical but can be scaled. Theoretical would be the quantum placement/displacement trap as a power source for igniting a new era in space travel and exploration.
A fusion reaction of this kind has been postulated by a few for the inner workings of black holes and would take both energy production and Moore’s law to its utmost conclusion. Since the mathematical constant pi allows for this action to exist, I often wonder who is currently working on such a project.
Keep enticing people to learn and grow while hopefully gaining financial stability.
– Jane S.
Hi, Jane, and thanks for being a reader and sending in such great comments. It’s always a pleasure to share exciting developments with readers.
The journey to nuclear fusion is a topic I’ve been heavily researching. I believe that we have finally reached a point where this incredible technology hits an inflection point. The point where we flip from theoretical technology to commercially scalable technology (to your point).
As a reminder for readers, Avalanche Energy just came out of stealth mode. It is using an “orbiting ion trap” to produce a nuclear fusion reaction.
This differs from the traditional tokamak designs that use large, heavy magnets to contain the plasma of the fusion reaction.
A Tokamak Reactor
Source: MIT
Avalanche’s device, the Orbitron, on the other hand, traps an ion in its chamber under incredibly high voltage. Then it fires other ions into the trapped one. The high-voltage conditions cause the ions to collapse into one another and fuse. The fusion then releases an enormous amount of energy.
And even more exciting, this reactor design is not just a compact fusion reactor. It is a super compact reactor. So compact in fact, we could theoretically hold it in our hands (it would be quite heavy, though):
The Orbitron’s Size
Source: Avalanche Energy
These reactors are roughly the size of a microwave… which means they could be easily transported around the country.
We could use these in neighborhoods. They could power ships, trains, trucks, or even planes. And they could contribute to off-the-grid power generation where needed.
Not only will they be scalable, but they will be the ultimate example of being able to have a completely decentralized form of power generation.
And once a nuclear reactor can generate more energy than it needs to operate, the world will change. We will have 100% clean, limitless, and effectively “free” energy in our grasp.
I’ll continue to update readers as this and other projects get us ever closer to that future.
That’s all we have time for this week. If you have a question for a future mailbag, you can send it to me right here.
Have a good weekend.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
