Dear Reader,
As readers know, one area of focus for us here at Brownstone Research is the mass adoption of electric vehicles, with a strong preference for those that are fueled by electricity that comes from clean energy sources (not carbon-based fuels).
My self-described “future of transportation” investment theme is one of my favorite areas of research. It’s one that encompasses trains, planes, automobiles, and even spacecraft.
And it’s one that will unfold over years and touch nearly every aspect of our lives, whether we see it or not. And, of course, there will be incredibly exciting investment opportunities along the way.
My readers are well-positioned for this trend with large- and small-capitalization investments in The Near Future Report and Exponential Tech Investor. And I recently uncovered something that could be a perfect complement to our strategy…
Tomorrow evening, my friend and colleague Dave Forest is hosting his EV Superboom Summit. I respect Dave and his work a lot.
His work is complementary to mine. And like me, he sees enormous potential in the electric vehicle (EV) space. In fact, Dave has done a ton of research on “battery metals” that will be used to build vehicle batteries, as well as the other assets needed to build EVs.
This happens to be one of the most popular questions we receive from readers… How should we gain exposure to critical metals powering the EV trend? Dave has the answer to these questions…
I’d highly encourage interested readers to attend this event. To register for your free spot, simply go right here to sign up.
Blockchain project Helium just raised $200 million in its Series D funding round. The company is now valued at $1.4 billion.
And, most importantly, this gives it the cash it needs to make its vision of a blockchain-powered, crowdsourced, fifth-generation (5G) wireless network a reality.
As a reminder, Helium is a unique blockchain-enabled tech company that has developed the software to enable crowdsourced wireless networks. Helium partnered up with another entity called “FreedomFi,” as well as a handful of manufacturing partners, to build the small wireless cells and gateways needed to run a wireless network.
We can think of these devices as small cell towers. They’re roughly the size of a hardback book and can be set up wherever there is an electrical outlet.
But here’s the key – Helium and FreedomFi aren’t going to set up and manage these devices. Instead, they are only responsible for the blockchain-based software that stitches the network together and provides unique economic incentives to get the infrastructure in place.
As for the physical infrastructure, Helium incentivizes regular people to run their own cells. Anyone can buy the hardware and connect it to the network – right from their own homes. They then receive compensation in the form of Helium’s HNT token.
As I write, one HNT is worth $24.43. And it’s completely fungible. Holders can convert HNT into Ethereum (ETH) at will. And they can sell the ETH for U.S. dollars should they choose.
By design, this will be a fully decentralized network. Helium is leveraging the power of the crowd to compete directly with AT&T, Verizon, and T-Mobile here in the U.S.
The company has already succeeded with its first project – a crowdsourced wireless network for internet-of-things (IoT) devices, such as small sensors producing relatively small amounts of data. There are now more than half a million of these Helium IoT hotspots deployed and running live.
The next step is for Helium and FreedomFi to enable a 5G network with similar coverage levels as the major carriers, with the same kind of crowd-based economic incentives that made the IoT network such a success.
Without economic incentives, it would never happen. But with them in place, the more people who run the Helium-enabled FreedomFi cells, the bigger the network will be. The larger the network, the more network participants… And with more network participants, the value of HNT will increase.
Moving from a narrowband IoT network to a crowdsourced 5G wireless network is a major jump. That’s what this $200 million raise is all about.
It’s the fuel that will enable Helium to scale up its technology to support such a major project and put the right kind of partnerships in place for launch.
This is going to be a fun project to follow.
As the hardware becomes available, those who are interested will be able to participate in “building” the network.
And as coverage improves, this has the potential to become a far more affordable service offering compared to the outrageous prices that most of us pay for wireless service every month.
Clearview AI’s business plan just leaked… and this story is much bigger – and more disconcerting – than we originally thought.
For the sake of new readers, Clearview AI is a company that popped up on my radar back in January 2020. At the time, I referred to the company as the early stage startup that may kill privacy forever.
That’s because Clearview AI built its entire business around “scraping” pictures from publicly available resources on the internet. It used bots to collect images of people from all over the world – without their consent.
Clearview scraped more than 10 billion pictures in total. Then the company applied its facial recognition technology to all of these pictures, and it associated a name with each face.
The result? The largest facial recognition database the world has ever seen.
The company then took its database and pitched it to law enforcement agencies. Clearview AI has now worked with over 1,800 different agencies, including the Federal Bureau of Investigation (FBI), the U.S. Department of Homeland Security, and several law enforcement authorities in Canada.
Well, the company isn’t anywhere near done with its mission…
Clearview AI is out canvassing to raise $50 million as we speak. And as luck would have it, the company’s investor presentation leaked out as reported by The Washington Post. It turns out this company’s ambitions are monumental.
Clearview AI’s goal – and the reason it is raising $50 million – is to 10X the size of its database. Clearview AI wants to scale from 10 billion to 100 billion pictures of individuals.
For context, that’s equal to about 14 photos of every human being on the planet.
Of course, we know there are still some people out there who don’t use a smartphone, social media, or the internet. So, in practice, Clearview AI won’t capture everyone.
But for those of us who are “out there” in the modern world, we’re stuffed – we will be captured whether we like it or not… How creepy is that?
As we discussed last month, this raises major concerns around civil rights and privacy. And it introduces a new risk to society.
What happens if the facial recognition tech gets it wrong and somebody is falsely arrested? After all, this has happened before in the past, just not at this kind of scale.
And Clearview AI is also in discussions with private companies who are thinking to use the database for biometric authentication. It’s still creepy, but it has some interesting applications. I can see how the private sector could adopt this technology at scale.
For example, Clearview AI’s database could empower retailers with Amazon-like “grab and go” tech, but without the big up-front investment. I’ll explain with an example…
Imagine walking up to the checkout counter at our favorite store. The camera overhead identifies us and notifies the system.
This prompts the cashier to address us by name and ask if we would like the store to simply charge the same credit card we used last time. If we say yes, we can simply take our items and walk out. Easy as that.
Another good example is in the ride-hailing space. Clearview AI’s tech would allow Uber and Lyft drivers to confirm that the person who gets in their car is the owner of the account that requested the ride.
Or imagine going to a major event like a concert or a sporting event. Cameras could simply use your face as your “ticket” to get into the stadium. Facial recognition would link the face to a name and directly to a ticket that would have been purchased in advance. We wouldn’t even have to take our phone out of our pocket.
So a host of private commerce applications could adopt this tech very quickly. Like it or not, facial recognition is coming.
If Clearview has its way, its database will be largely complete before the year is out. And if it’s successful in signing up a few enterprise customers, we may even see the consumer-facing applications hit the market by the end of 2022.
Despite the recent market pullback, the digital asset space is still red-hot.
Venture capital (VC) stalwart Sequoia Capital just announced plans to launch a $600 million fund. And it’s going to focus entirely on cryptocurrencies.
This is huge.
Founded in 1972, Sequoia is a VC giant with $80 billion in assets under management (AUM). And the firm is time-tested. Its track record over the last 50 years is stellar… a rarity in the venture capital industry.
And here’s the thing…
This is the first time that Sequoia has ever launched a sector-specific fund. That’s telling. A historic VC firm that typically seeks diversification is going all-in on crypto.
The fund plans to invest in liquid cryptocurrencies that trade on top-tier digital exchanges. What’s more, Sequoia is interested in staking. Staking is a way for digital asset investors to earn interest on their holdings.
We can think of this like depositing money into a savings account or certificate of deposit (CD). Our funds provide the bank liquidity. And in return, it pays us interest.
There’s a key difference, however. The yield on bank savings accounts and CDs is currently dismal. As I write, the best CDs yield less than 1%. And the best savings accounts are paying less than 0.7%. These returns don’t come close to keeping up with inflation.
Meanwhile, staking provides a healthy return on investment. Coinbase estimates its users can yield nine to 12% on staking Ethereum (ETH). And staking smaller digital assets can be even more lucrative.
It took Sequoia a while to warm up to the digital asset industry, but last year was a big one for the firm. It took a large stake in an investment into a new fund run by hedge fund giant Citadel Securities focused on digital assets. And it was involved in the funding rounds for a couple of other large blockchain projects.
The reality is that Sequoia needed to step up and make a much larger play to be taken seriously in the blockchain industry. Otherwise, it would risk being left behind given the record levels of investment last year.
As we can see, 2021 was a record year for venture capitalists investing in blockchain technology. Over $25 billion poured into the space last year. That’s eight times more than 2020.
This shows us just how important digital assets are to the smart money. It’s one of the most dynamic sectors presenting some of the largest asymmetric investment return opportunities.
We’re seeing the validation of this asset class right before our eyes. Institutional investors can no longer afford to ignore this space.
I predict 2022 will at least match last year’s level of investment in this space. And we will see a lot of VC firms raise their own crypto-specific funds in the coming months.
That’s why I’ve continued to help my readers build their own stake in this space… If any new readers would like to learn about some of my top recommendations, please go right here for the latest.
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.
