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.
It’s always great to end the week on good news, and that’s exactly what we’re going to do.
Economists were flummoxed yet again by fantastic unemployment numbers in the U.S. The U.S. jobs market added 1.4 million jobs in August, and the unemployment rate fell to 8.4%. Economists’ expectations were around 9.8% – that’s another massive miss.
I’m glad they were wrong… again.
And while the mass media is doing its best to position these numbers as negative, 1.4 million new jobs and a drop to 8.4% unemployment is pretty incredible considering the U.S. economy was on a complete lockdown just three months ago.
We are witnessing an incredible recovery right now that is clearly indicative of the underlying strength of the U.S. economy.
It would be incredible, but the U.S. does have a shot at recovering to a 5% unemployment rate by the end of the year. For those of us who care about our financial future and our investment opportunities, this would be fantastic news.
And it would also set us up for a fantastic 2021, which I am predicting will happen.
Fall is finally almost here. I hope that my readers in the U.S. have a fantastic Labor Day weekend. For those outside of the U.S., we hope you can enjoy some spectacular weather.
And my thoughts are with my friends in Australia and New Zealand. They’re being subjected to draconian police state measures and the seeming loss of free speech for absolutely no reason whatsoever. If you are Down Under or on the North or South Island, I’d love to hear from you.
Let’s begin with a question on whether quantum computing poses risks for our money…
I have recently become a member and am reading voraciously. I recently read the mailbag edition regarding Archer Materials Limited (AXE). First, I am NOT a tech guy, so my understanding of computers is very basic.
However, I have read some [research] regarding quantum computing and all the exciting things it can provide. It does scare me somewhat in its abilities. So I have some questions regarding quantum computing and how it relates to finances.
How do we make money from it and its future companies? But more importantly, is there danger from [quantum computing’s] superior speeds and processing power with regards to having safe digital currency, since the world is essentially digital now?
Are offline digital wallets the only way to be truly safe?
– Troy R.
Hello, Troy, and thanks for being a subscriber. You’ve chosen a great time to begin investing in technology… and quantum computing is just one area where we’re seeing huge advances.
To get new readers up to speed, almost a year ago, I told subscribers that the age of quantum supremacy had arrived. That’s the point at which a quantum computer can outperform the most powerful classical supercomputer on earth.
Google ran tests on its 53-qubit quantum computer. Researchers gave the quantum computer a task that would take one of the world’s most powerful supercomputers, Summit, 10,000 years to complete.
The quantum computer solved it in 200 seconds…
That was a historical moment. Quantum supremacy will change everything.
For starters, we need to rethink everything we think we know about cybersecurity.
For several decades, 256-bit encryption was considered “military-grade.” It has been impossible to crack with classical computing systems.
And that encryption is used by governments, militaries, corporations, blockchains, and e-commerce websites. Once quantum computing can crack 256-bit encryption, everything is potentially compromised.
Fortunately, the industry has been expecting and planning for this eventuality. Back in 2016, the National Institute of Standards and Technology (NIST), a branch of the U.S. Department of Commerce, launched a competition for the development of quantum-proof cryptography. The target completion date was 2022.
Sixty-nine different cybersecurity teams entered the competition. NIST went through each team’s proposed system and narrowed the field down to 15 teams.
That means the race for quantum-proof cryptography is heating up.
And here’s what has me excited about all this…
The entire world’s cryptographic systems will need to be upgraded very quickly. That will require massive amounts of spending on cybersecurity. As a result, the best cybersecurity firms are staring at a windfall to the tune of hundreds of billions of dollars.
This will be the most meaningful technological upgrade in the cybersecurity industry in decades.
I’ll know which cybersecurity firms are best positioned for this massive shift within the next couple of years. I’ll closely watch where the key teams working on these new standards for quantum-proof cryptography go.
Some will establish new cybersecurity firms, and others will join established tech companies looking to be well-positioned for this massive shift.
And that means the investment opportunities for us will be incredible. Readers of my Near Future Report and Exponential Tech Investor services will be the first to hear about them.
In fact, our next issue of The Near Future Report includes a company that has already gained a strategic foothold in the realm of quantum computing. Subscribers can keep an eye out for that issue on Monday evening.
And if anyone is not yet a member, go right here to find out how to join.
Next, a reader wants to know more about the future of biotech…
Hi there! I’m brand new, and I’m already enjoying your newsletter. Thank you for doing what you do!
Reading your input on this topic, what immediately came to mind is Big Pharma and how they and their greed ALWAYS get in the way of anything being affordable! It’s absolutely horrible, the despicable and shameless way their focus is on making money for themselves and investors rather than what is actually good and right for people. I’m a huge non-pharm person. I choose healthy eating and good herbs that work for me.
That being said, I’m interested in your thoughts on that, as well as how this new biotech would change the medical profession. It sounds like it would mean the need for fewer doctors and a big shift into biotech positions, right?
I think this technology is amazing and am curious about it myself. I work for a health insurance company, so this would be a huge win for us and our customers, and yes, it could mean lower premiums!
– Danielle W.
Hi, Danielle! Welcome, and thanks for writing in.
I’m really happy to hear that you are taking responsibility for your own health. While some of our health conditions may be predetermined by a genetic mutation, most are caused by environmental conditions. In other words, what we eat and drink, how much, and our overall fitness levels.
I’m so glad you asked about this. It’s a real hot topic for me. The health care industry represents one of the largest areas for improvement in all of high tech and biotechnology. The inefficiencies are systemic, and they come at the cost and suffering of patients around the world.
Your question about Big Pharma is actually a tricky one. Let’s take 2018, for example.
The pharmaceutical industry invested $102 billion in research and development (R&D) that year. That’s an incredible number for a single industry.
And the industry does that knowing it can take more than 10 years to bring a single new medicine to market. Worse yet, only 12% of new molecular compounds receive approval from the Food and Drug Administration (FDA).
Would we like to invest in a business like that? Invest billions in R&D, wait 10 years or more, and only have a 12% chance of getting FDA approval? Tough business.
My point is that the only way pharmaceutical companies can survive is by generating profits from the small number of drugs that do get FDA approval and are proven to be effective. If these companies weren’t willing to invest at these odds and bring new drugs to the market, many more millions would die and suffer unnecessarily.
Now, to your point, these companies are not perfect. I particularly don’t like the practice of selling a drug in one market for a fraction of the price at which it is available in the U.S. Or for that matter, restricting the importation of drugs from a neighboring country like Canada to access better prices.
I also don’t like the weakness in the pharmaceutical industry’s supply chain, which is way too dependent upon Chinese manufacturing. The Western world has learned the hard way how severe this problem is during this pandemic. This needs to be remedied.
We also need to recognize that the problem isn’t just with pharmaceutical companies. A recent study in the U.S. determined that 320 hospitals mark up medicine prices more than 1,000%!
When I read the report, I was beside myself. Clearly, this practice is a problem for both insurance companies and patients.
The whole industry needs a complete reset.
The trend toward preventative medicine is going to help accelerate that reset. We now can sequence our genome and proactively identify current and future health conditions, some of which we can take tangible steps to address. This in itself will help reduce the overall costs for hospitalizations and other medical expenses.
Genetic editing is going to help us cure mutations that would ultimately lead to years of suffering and even death. This too will help reduce costs.
And artificial intelligence and machine learning are already helping the biotechnology industry accelerate drug development faster than we’ve ever seen before. This will result in therapies that are optimized from the start, with higher efficacy and shorter times to FDA approval.
It won’t be just one thing. All of these things are happening at the same time, and we’ll see even more positive developments this decade. We have a lot to look forward to.
My best advice now is to eat right, stay healthy, be proactive about your health, and exercise regularly to stay strong.
Let’s conclude with a question about data mining…
Hi, Jeff. Thanks so much for the scary words on data mining off of free phone apps. So, a silly question. Do I need to be actively using the app to have my info mined, or can info be mined by simply having the app on my phone? Maybe it’s time for me to travel light with the phone apps! Thanks for all the education; I’m learning so much.
– Bernie T.
Hi, Bernie. Thanks for your question – it’s not silly at all. And my research wasn’t meant to scare anyone. I simply want to educate and inform so that we all can be aware and make informed decisions.
As we discussed recently in The Bleeding Edge, we need to be mindful of what apps we download on our phones and other devices. If the app is free, the first thing we should ask is, “What’s the business model?”
Some apps, like Fortnite and other games, can be downloaded for free, but then users can make in-game purchases to advance more quickly. That’s a valid business model that doesn’t require the company to harvest and sell our data to make money.
But many “free” apps don’t have a clear mechanism for generating revenue. If that’s the case, we can bet the app is mining our data and selling it.
Regarding your question about this data mining, the bad news is that we often give these free apps permission to spy on us… even when the app isn’t in use.
Whenever we download an app, it will often ask us for permission to view our location, see our contacts, access our storage, or to use our camera and microphone. It’s easy to download an app and approve its permissions requests without thinking about what we’re handing over.
And I wouldn’t blame anyone for clicking on “Allow.” Who has time to read a 72-page legal document outlining what a user is consenting to with each and every application that we use?
Some of these permissions are necessary. After all, a map app for directions wouldn’t be very helpful if it couldn’t access your location. But we should always think critically about which permissions we’re allowing when we download something to our phones or other devices.
And even necessary permissions can still expose our data. Once that map app has permission to see your location, for instance, it can share that information with its developer… who can sell that data and let third parties track you.
As one specific example, whether you’re using an iPhone or an Android, Google Maps logs where you go, your route for getting there, and how long you stay at any particular location. And it does this even if you never open up the app.
I understand if readers find this unsettling. It certainly makes me very uncomfortable, which is why I try to avoid all Google products. Its business model is built on selling data to generate advertising revenues. It’s that simple. That isn’t Apple’s business model at all.
That’s why my strong recommendation is to look for premium alternatives to these apps. It is worth the time to search for trustworthy apps from reputable software developers and worth paying a premium for quality and security.
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 fantastic weekend! I hope the weather is nice wherever you are.
Regards,
Jeff Brown
Editor, The Bleeding Edge
Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com.
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.
