Hi, I’m Azeem Azhar. I convene Exponential View to help us understand how our societies and political economy will change under the force of rapidly accelerating technologies.
🎙This week on the podcast
On this week’s podcast, I spoke to Do Kwon, the co-founder and CEO of Terraform Labs, the company behind the Terra blockchain. Terra hosts stablecoins pegged to a number of currencies, and enables an entire financial ecosystem to operate around those stablecoins, from ultra high-yield savings accounts to synthetic asset trading. Do’s aims are pretty ambitious: he wants Terra to be the money of the future.
Today’s edition is supported by our knowledge partner, McKinsey & Company.
Cybercriminals are having a field day: a McKinsey survey found a near-sevenfold increase in spear-phishing attacks since the onset of the pandemic. This ongoing threat is proving increasingly challenging for organizations, but what does it mean for cybersecurity providers? A new article looks at the four remaining unsolved challenges in the new security landscape, and how addressing even one of these challenges can help providers gain a sustainable edge.
The near future
🗑️ Ending the Waste Age
We live in the Waste Age, argues Justin McGuirk, the curator of the Design Museum in a challenging essay.
Nature and waste have fused at both planetary and microbiological scales. Similarly, waste is not merely a byproduct of culture: it is culture. We have produced a culture of waste. To focus our gaze on waste is not an act of morbid negativity; it is an act of cultural realism.
Rather than an age of dematerialization, our current age is very tangible: seen in the waste we produce – as much as 12bn tons of plastic waste in landfills by 2050. (And, not to mention that hundreds of billions of tons of invisible CO2 we have put into our atmosphere.)
McGuirk argues that the discipline of design is finally turning its attention, not to persuade us to consume more and waste more, but to encourage products, of all types, that waste less and less.
🗺️ Metaverse 101
Virtual reality pioneer Tony Parisi published his metaverse manifesto back in October. It’s an excellent guide to understanding what that word means:
“[S]omeday, a global network of spatially organized, predominantly 3D content will be available to all without restriction, for use in all human endeavors — a new and profoundly transformational medium, enabled by major innovations in hardware, human-computer interface, network infrastructure, creator tools and digital economies.”
Parisi is mega-bullish on the concept of the metaverse. He gives seven rules that frame the metaverse (you can read them, and his manifesto, here). The rules, he says, “may not be embraced by all [... but] it doesn’t matter, for they describe an inevitability.”
One clue that Parisi might be right: the fight for metaverse talent is heating up (🔐). Microsoft’s augmented reality team has lost around 100 people in the past year, with many of those leaving to join Meta (formerly Facebook).
🍏 Apple’s media play
Apple spent just over $2bn on film and TV in 2021, according to Ampere Analysis estimates, considerably less than some streaming rivals. But redoubling its efforts in media might make more sense to Apple now than it has before. The company’s enormous scale means the cost of content represents a smaller proportion of revenues than it would have some years ago. Apple’s user base has grown too, and the company retains those users partly by locking them into the Apple ecosystem. If Apple TV+ helps retain more users – and represents a smaller proportion of Apple’s revenues than it would previously have done, to boot – greater investment in streaming starts to make more sense.
Binance’s big boss
Bloomberg has estimated the net worth of Binance founder and CEO Changpeng Zhao (A.K.A. CZ) for the first time: at around $94bn, Zhao slots in at 12th on the list of the world’s richest people. Not bad for “a former McDonald’s burger-flipper” (🔐). Binance is the largest cryptocurrency exchange in the world, with volumes five-times higher than Coinbase.
Elsewhere in cryptoland: Stablecoin issuer Tether froze three Ethereum addresses holding $160m worth of USDT stablecoins, and cryptocurrency exchange FTX launched a $2bn Web3 venture fund. Watch this space. See also: last week’s EV where I discuss rug pulls.
Sunday commentary: Future positive
Chatting with the team earlier this week, I argued that it was important for us to strike a tone that I described as “future positive” with our work this year. For years, this has been our implicit esprit de corps. Premium members of the EV community will have heard me quoting Gramsci’s “pessimism of the intellect and optimism of the will” in our discussions. To see opportunities critically, from different angles, understand what might get in the way, but also the belief that it is possible.
The other day I watched The Martian, the Matt Damon movie, and it reminded me of the theme of optimism (and pessimism). If you haven’t seen it (and if not why not?) then you know that at its core is a story about surviving on Mars for years after being accidentally left behind. The tone of the film is constant upbeat positivity, with the complete absence of self-pity or any hint of “woe is me”. Matt Damon just gets on with it, but his positivity also includes a complete absence of false bravado – he knows that there are scary moments ahead, but he doesn’t obsess about them, or his situation.
I find myself thinking that we should all try to be a little like Matt Damon in the movie (although I’m not sure most of us would end up as attractive!). As well as having an optimistic outlook, someone with this determination and positivity is incredibly hard to beat. The closest analogy I can think of is some research I saw some years ago about some soldiers who, despite being injured had incredibly high pain thresholds. They just got on with it and didn’t complain. Let me know if you know of any other research.
I’m not saying we all need to be as ridiculously positive as Matt Damon in the movie, but his determination is an example of optimism that can make a big difference, even if it sounds a little clichéd.
Now, dear reader, please pause there.
My theme this week was the reasonable importance of optimism. And penning it has given me an object lesson.
I wrote the first paragraph as a rough draft (up to “belief that it is possible”) and thought I would just throw this over to Jarvis.AI, a transformer-based writing assistant. Jarvis wrote the next four paragraphs (ending in “clichéd”). It also, helpfully, supplied three footnotes, which I excluded.
I’ve not edited a word of the text: Jarvis’ first draft is quite readable. Matt Damon in The Martian is an apposite but tacky analogy for pragmatic optimism. What surprised, head-exploded, me, is that Jarvis picked such a suitable example.
I don’t even have an emoji for what this piece of software has done. If such a pictogram existed, it would be the lovechild of 😃 and 🤯.
Let me get back on track. In their annual forecast of global risks, the World Economic Forum surveyed a load of the bigwigs in its network. More than 4 in 5 had a pessimistic outlook for the world.
This is miserable! I’m not going to argue that respondents don’t feel that way, nor am I suggesting that those feelings are legitimate. The risks report does some tough reading, around the growth of cyber attacks, the dramatic rise of displaced people (34m in 2020 up from 16m just five years ago, and a number sure to rise), and the growing urgency of climate change.
But I’m surprised with the 80% with a negative outlook on the world. There is always work that needs to be done. And one can accept that there is lots of work to do and still take a positive outlook. (No need to side with Pollyanna on this one.)
Rather, a more productive stance – especially if one is powerful and advantaged – is that of pragmatic optimism. Causes for concern are identified problems and themes, but they can be addressed by action. We can confront reality and also take action.
We live in a time where we have both the tools to help us and momentum in our favour. Renewables investor, Ramez Naam, published a presentation outlining meaningful progress in the $100 trillion journey to decarbonise the energy sector. (Or even this granular example, electric charging stations are on the cusp of becoming more profitable for oil supermajor BP than gasoline ones.) There are so many examples to pick up on.
It isn’t just in decarbonisation, consider the work of DeepMind in their annus mirabilis, or what we achieved with Covid vaccines: 27 approved vaccines in under two years, or the first xenotransplantation with a genetically-modified heart into a human patient who is expected to live (and accept the organ). Or the National Ignition Facility’s achievement a new milestone in fusion energy release from inertial confinement fusion. Or, back to the quotidien, how the e-bike market is forecast to grow at 11.6% per annum for the next decade (my bet is that it’ll grow faster than that, check with me in 2030.) I just got an AI system to write 230 perfectly decent words, albeit mostly about Matt Damon, for me!
The problem with pessimism is that, well, it brings everything to a standstill, we move into hibernation mode. The pessimist’s game can become a zero-sum game that takes us to the internecine, the outsider, walls rather than bridges. We ignore the good because the best isn’t available to us. Hard paths are not taken because we can’t see the reward. We focus on our current state of affairs (which might be distinctly awful) rather than on what we can do to get out of them. Capital dries up and with it investment and exploration.
I’ll wager that an outlook of pragmatic optimism unearths more problems, inequalities, injustices, risks, stresses and strains, than a pessimistic one. Such an approach need not be an uncritical techno-utopia, it can engender a thoughtful scepticism as well. (Read Elizabeth Renieris’s argument on why Web3 would benefit from such an approach.)
Exponential View will explore that positive future (the optimism of the well) with our cross-disciplinary, critical perspective (pessimism of the intellect).
Short morsels to appear smart while exercising the optimism muscle
😬 The US military is struggling to fight against swarms of cheap, hobbyist drones (🔐) in the battlefield. Solution: expensive lasers. See also, 🇺🇦 Ukraine suffered its worst cyberattack in 4 years, with over 70 government agencies down for several hours. I write about how to tackle this type of asymmetric escalation in chapter seven of my book.
⚡ ExxonMobil is buying a 49.9% stake in Biojet, a Norwegian company converting forestry and wood-based construction waste into biofuels. See also, Indian billionaire Mukesh Ambani’s conglomerate Reliance Industries is investing 6 trillion rupees - about $80.6 billion - into renewable energy, which could create a million jobs in western India.
💰💰 Paradigm, a four-year-old crypto investor, and Sequoia Capital buy a$1.2bn stake in Citadel Securities. The investment marks a departure from Sequoia’s usual tactics. The legendary VC group is better known for investing early in nimble tech companies (such as Google, Linkedin or Stripe). It’s new for Citadel, too. The financial services giant had never before received outside investment.
📗 Print books had a massive 2021, selling more than 825 million copies in the US, up 7.9%. Happy to do my bit!
😊 The NeurIPS 2021 NetHack Challenge dared teams to design and train an AI to solve a game of NetHack, one of the most difficult in the world. Despite no agents managing this feat, it’s worth noting that symbolic bots performed significantly better than their neural counterparts.
🥗 Take a microscopic look at the Apple Data Cable.
A little footnote about the idea of pragmatic optimism. It is often associated with Jim Collins, the management scholar, who termed it the Stockdale Paradox. The Stockdale in question was Jim Stockdale, the American naval aviator, who spent several years as a PoW in the Hanoi Hilton. Stockdale ended up as Ross Perot’s running mate in 1992 and is famous for this hilarious opening statement. That election was the first time I built a published infographic as we reported on the results in my student paper.
As a reminder, we are redesigning the department of decarbonisation. So while we have removed it from the Sunday newsletter, this is simply to allow us to tinker with it.
Thanks to EV members Gianni Giacomelli & Paola Bonomo who helped with this issue.
What you’re up to – notes from EV readers
Belated: Congratulations to Bryan Walsh for joining Vox as Editor of Future Perfect!
Aaron Frank explains metaverse in simple terms. Recommended.
Gianni Giacomelli breaks down the people-powered digital transformation.
Ken Pucker writes about the myth of “sustainable fashion”.
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