#1 NFTs, Tesla's Humanoid, Cleantech 2.0
A few interesting stories or subjects and a little bit of opinion about each. Disagree with me in the comments.
NFTs
Prices for NFTs, or at least the ones with any amount of hype, are through the roof. It’s clearly a mixture of real demand, wash trading, and money laundering, amongst other things. In any case, assuming no foul play, the sale of the certificate of ownership of a jpeg called Chromie Squiggle #3784 (try downloading it for free) for Ξ750 ($2.4m at the time) feels a bit like speculation.
The case for NFTs is that they are able to assign ownership of things in a decentralized way. This is supposedly useful in a metaverse where you are free to jump between providers and take your possessions with you - say you own a nice jacket in Facebook’s world and you want to wear it to play Fornite, without anyone saying no or going out of business and it disappearing with them. However, the great thing about most virtual goods, especially virtual clothing for your avatar, is that the marginal cost of production is zero. Why are you paying anything at all beyond a small amount to the original designer or an amount according to its utility (a weapon in a game for example)? It feels like an attempt to apply real-world scarcity to virtual world abundance - a war already fought by The Pirate Bay and won by Spotify.
I remain long Ethereum.
Tesla’s Humanoid Robot
Tesla/Elon Musk is an absolute master of marketing, PR, government subsidy, and designing mid-to-high-end electric cars people want, amongst many other things. Tesla is not a master of humanoid robots.
I would like to think I have a balanced opinion of Tesla. In 2015 I stock-pitched TSLA in an investment banking interview and now cringe at how much of a fanboy I must have appeared. Perhaps fair enough, though, as the price of a share has since increased by 14 times.
However, from 2021 onwards, it feels like a company built on hype, and the humanoid robot is from a familiar playbook. Take Hyperloop, for example. Billed as a futuristic mode of inter-city travel, a few years later, a $50m tunnel between two ends of a convention center with cars in it. Nevertheless, CNBC gave it some free PR in what felt like a comedy sketch.
Step 1, Announce some futuristic new project that exists only as a twinkle in Elon’s eye. Step 2, wait a couple of years so people mostly forget about it. Step 3, deliver a half-assed prototype and call it good.
There’s no doubt Tesla can hire the best talent in the world, and spend some serious cash on r&d, but I won’t be surprised when the delayed result is somewhat incremental in nature, rather than the touted threat to the human race. It won’t matter though, as Tesla’s share price approaches $10,000 and I still won’t be able to afford a Model 3.
Cleantech 2.0 - massive factories
In retrospect, the bursting of the cleantech bubble of the 00s seems kinda obvious. In 2008, over $4b made its way from investors to cleantech projects. The idea was that with enough money, you could do anything, as long you could shovel cash onto the bonfire at great enough speed, economic and scientific reality be damned.
Unfortunately, as projects began to run past the 5-8 year window in which venture capitalists expect returns, appetite for cash immolation waned. The global financial crisis, perhaps mercifully, sped up the demise of the first cleantech wave. The ‘build a factory and see what happens’ approach didn’t work.
And yet, here we are again. But what if this time it really is different? Tesla broke the mold, survived cleantech 1.0, and made electric cars important - now they are selling 300k cars a year and pioneering gigafactories. Renewable electricity production, the business of the particularly ill-fated cleantech 1.0 company Solyndra, now accounts for over 40% of all electricity produced in the UK. It’s also now widely understood that unless we get to work, the world is soon going to be simultaneously underwater and on fire.
We need to think big and be daring to solve this problem, and I’m inclined to be optimistic about our ability, as a species, to engineer our way out of trouble. However, let’s not repeat the mistake of thinking big bags of cash alone will be sufficient. Political & economic realities must be firmly bent in the direction of progress. Scientific frontiers should be respected whilst you work to extend them.