I know you’re likely eager to read today’s issue of The Bleeding Edge, so I’ll make this brief…
Today is your last chance to view my free investing presentation, the Early Stage Tech Summit. During this presentation, I outline four bleeding-edge technologies that will change the world in the next five years. And I even give the name of my favorite early stage private tech company.
If you’ve been putting off viewing the presentation, then this is your last chance. My publisher plans to take the presentation off-line at midnight tonight. So watch it right here before then.
Now, on to The Bleeding Edge…
This is Facebook’s big day. The company announced its cryptocurrency project today (Project Libra). The project’s official partners were revealed ahead of time… And that gives us some insight on what to expect from “FacebookCoin.”
Remember, Facebook created a foundation of companies to operate its blockchain network. And each company put up $10 million for the privilege. The list of those companies was disclosed.
On the list are traditional payment companies Mastercard, Visa, Stripe, and PayPal. Top digital asset exchanges Coinbase and Xapo appeared as well.
This tells us that FacebookCoin, or “Libra,” will bridge the gap between fiat and crypto. Large digital asset exchanges like Coinbase and Xapo will likely provide liquidity and support for Facebook’s stablecoin, which is expected to be linked to a basket of fiat currencies.
Uber and Lyft are also on the list. That tells us they foresee a day when consumers pay for rides with Libra.
eBay and South American e-commerce site MercadoLibre are on the list as well. This suggests that Facebook foresees Libra being used for e-commerce in the U.S. and the developing world.
Given that Libra will be a stablecoin, it will have low volatility… which will be attractive in countries without a stable currency, like Venezuela and Argentina.
That means Libra could be used for payments and as a store of value in certain markets.
With Facebook’s global user base of 2.38 billion, it won’t take long for the coin to gain adoption. It also is a major threat to competing stablecoins in the market like Tether. Facebook will likely overtake Tether from the day that the platform is launched.
But I do need to point out one company that’s absent from Facebook’s master list…
Amazon.
And readers who have been with me for a while know why… I believe Amazon is working on its own cryptocurrency and digital asset exchange.
Amazon has “only” 300 million users worldwide. But nearly half of all e-commerce sales in the U.S. occur on its platform. And more than 40% of U.S. customers buy from Amazon at least once per month. That gives Amazon the reach it needs to compete with Libra.
And with $233 billion in annual revenues, Amazon could add $4.7 billion to its bottom line simply by avoiding the fees associated with the legacy payment system.
So get ready. Facebook’s digital currency might be one of the first company-backed cryptocurrencies, but it won’t be the last…
More to follow this week on this project as I digest the announcement.
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On June 5, two researchers at the United Nations (UN) released a paper about how they used AI to create fake UN speeches.
To do this, they downloaded open-source artificial intelligence (AI) software for free. Then they fed the AI text from past UN General Assembly speeches.
The cost? $7.80 in cloud computing resources.
Thirteen hours later, the AI was spitting out speeches like a UN politician. It was talking about things like refugees and nuclear disarmament.
The speeches were realistic… But they were all fake.
The researchers stopped there. But if they had bad intentions, the next step would be to clone a politician’s voice and then create an animated talking head of that person giving the fake speech.
The result? Chaos.
Simply put, the dark side of AI is something we must deal with today… not several years from now.
I can tell you this: The company that develops an AI that can recognize content produced by other AIs – in other words, the ability to recognize fake news – will make billions of dollars.
This is one of the biggest business opportunities out there today. We need an AI that can tell us when content is fake and a technology platform that we can trust to tell us what is confirmed as real… or not.
And just to be clear, Facebook, Twitter, and Google are not those trustworthy platforms. But for anyone with the time and interest, such a business is your ticket to billionaire status.
Word is out that Apple is angling to acquire Intel’s German wireless modem unit. This comes a few months after Apple came to an agreement over licensing terms with Qualcomm. The agreement included Apple agreeing to use Qualcomm’s modems. The agreement was for six years. We covered that back in April.
By the way, the modem is what connects a smartphone to the wireless network. Without it, smartphones don’t work. This has been Qualcomm’s key product for decades.
What’s interesting here is that Apple was using Intel’s modems in its recent generation of iPhones up until the Qualcomm deal in April. Apple was Intel’s largest customer.
But with the Qualcomm deal, Apple stopped buying Intel’s modems. That crushed Intel’s modem business.
Now, Apple wants to come back and buy Intel’s modem division for pennies on the dollar. Quite a shrewd strategy. Intel originally acquired its modem unit from German semiconductor company Infineon for $1.4 billion.
Since then, it has invested billions in research and development so that it could serve Apple. The ironic part is that Apple will probably pick up the assets for less than what Intel originally paid.
I am also hearing that Apple is hiring a lot of engineers in San Diego. These are ex-Qualcomm guys. Apparently, Apple plans to create a wireless modem division in San Diego, hiring 1,200 people in the process.
Altogether, this tells us that Apple plans to develop its own wireless modems. In about six years, Apple will use its own modems in all Apple products. And that will allow it to cut Qualcomm out of the picture.
So for investors, here’s the rub…
Qualcomm makes fantastic wireless technology, but its licensing model is going to change.
Qualcomm is in court for anticompetitive business practices, and it will eventually be forced to drop its current business model of charging a percentage of the average selling price of any phone, whether or not the phone has a Qualcomm chip inside.
This will have a dramatic reduction in Qualcomm’s licensing revenues. And the world’s largest smartphone manufacturers are moving away from using Qualcomm’s wireless modems. The incentive to do so is the desire to not be locked in by a single vendor and, of course, save costs by doing so.
Qualcomm’s anticompetitive business practices have severely backfired on the company. This will ultimately lead to a decline in business. This is not a company I can recommend today.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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.
