??#88: Fight For Freedom

Hey, it’s Marc ??

Today we will cover crypto, macro & AI:

• Crypto: Telegram CEO arrested, faces 20 years. Sony launches new blockchain. Tether’s new stablecoin. State Street partners with Taurus.
• AI: X releases Grok 2. Salesforce releases new AI agents.

Let’s dive in ??

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?? Our Top Reads

• The rise and fall of crypto narratives. By Farhad F. Link
• Public blockchains and social consensus. By Michael Nadeau. Link
• Good Things Take Time. By Gaby Goldberg. Link
• This is the beginning of the end of the generative AI boom. By Brian Merchant. Link
• Google Has Finally Dethroned ChatGPT. By Ignacio de Gregorio. Link
• ...

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?? Crypto & Macro

Durov's Legal Loops

Telegram's CEO Pavel Durov was arrested in France over concerns about insufficient moderation on the platform.

What you need to know:

• The arrest is tied to accusations of fraud, drug trafficking, organized crime, terrorism promotion, and cyberbullying due to Telegram's lack of moderation.
• Telegram defended its practices, stating it complies with EU laws and shouldn't be held responsible for user abuses.
• The arrest sparked backlash, with critics claiming it threatens free speech.

Why it matters: The arrest underscores the difficulty of balancing platform independence with global legal and political pressures. It also highlights the ongoing tension between tech companies' commitment to privacy and the need for law enforcement access to combat criminal activity.

Zooming in: Durov was arrested at Le Bourget airport near Paris on August 24, 2024. French authorities extended his detention beyond the initial 48 hours as part of an ongoing investigation.

• TON coin powering The Open Network (hence TON) blockchain has dropped 20% on the news.
• TON is tightly integrated into Telegram Messenger with 900M+ users.
• Durov, who holds French citizenship, could face up to 20 years in prison if convicted.

Between the lines: Russian ex-president Dmitry Medvedev says Durov miscalculated by expecting to avoid cooperation with security services, underscoring the struggle between platform independence and legal pressures.

Russian officials see ulterior motives, accusing France of attempting to gain access to Telegram's user data. Durov's complex relationship with Russia further complicates the matter. Despite his self-imposed exile and claims of neutrality, some Russian officials see him as a tool for Western influence.

What are they saying:

“I have read false information here regarding France following the arrest of Paul Durov.

??Read our Telegram deep dive here.

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Sony’s Blockchain

Sony Group, in collaboration with Startale Labs, is launching an Ethereum Layer-2 blockchain called Soneium.

What you should know:

• Compatibility: Accessible through applications compatible with Soneium’s network, supporting Web3 games, NFT marketplaces, and entertainment services integrating Sony’s extensive ecosystem.
• Integration with Sony IP: Leverage Sony Group’s businesses and intellectual properties to develop new services.
• Web3 Solutions: Provide comprehensive Web3 solutions, from infrastructure to application layers with public availability.
• Partnership: Built on Optimism's OP Stack, Soneium is building its ecosystem in collaboration with big projects including Chainlink, The Graph, Alchemy and The Graph.

Why it matters: Sony, a major player in entertainment and electronics, venturing into blockchain could be a significant step towards broader adoption of Web3 technologies. Soneium is still in its early stages and its full potential is yet to be realized.

Zooming in: Sony’s patent applications of last year show a growing interest in gaming and digital assets and making them compatible across devices:

• "Automated tracking of earned in-game actions for granting an NFT backed digital asset" –?22.06.2023. Link
• “Tracking and processing history data of a NFT-based digital asset” –?08.06.2023. Link
• “NFT framework for transferring and using digital assets between game platforms” –?16.03.2023. Link
• “In-game asset tracking using NFTs that track impressions across multiple platforms” –?09.02.2023. Link

?? Read our full analysis of over 3000+ NFT related patent applications from major brands.

By the numbers:

• As of August 2024, Sony's total revenue for the trailing twelve months (TTM) is $87.21B.
• PlayStation Network: As of September 2023, the service had over 110Mmonthly active users.
• Music streaming: As of August 2024, Spotify reported that Sony Music Group's premium subscribers reached 23.6M.

The big picture: Sony's established presence in gaming provides a strong foundation for its upcoming blockchain initiative. The company's brand recognition, loyal fanbase, technical expertise, and existing infrastructure can be leveraged to create compelling blockchain-based gaming experiences that resonate with players and drive the adoption of Web3 technology in the gaming industry.

Devil’s Advocate: Sony’s venture into web3 is nothing unique and hence receiving criticism. With so many blockchains (and layer 2s!) already fighting for users and developers, launching a new one is hard.

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More Crypto Highlights:

• State Street has partnered with Taurus to enhance its digital asset services, adding tokenization and digital custody to its offerings for institutional investors. The collaboration aims to streamline the issuance and management of digital assets. Link
• Tether is launching a UAE Dirham-pegged stablecoin in partnership with Phoenix Group and Green Acorn Investments, aiming to leverage blockchain for seamless transactions and support the UAE's growing digital economy. The stablecoin will be fully backed by UAE reserves and is designed to facilitate international trade and remittances. Link
• ...

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???Regulation Highlights

• India is set to regulate cryptocurrency, with a public consultation paper from the Department of Economic Affairs expected by September or October 2024 to gather input from stakeholders. The move aims to create informed and effective regulations for digital currencies. Link
• ...

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??Artificial Intelligence

Grok-2 Released

• Grok-2 and Grok-2 mini are now available in beta on the ?? platform. Grok-2 offers advanced chat, coding, and reasoning capabilities, while Grok-2 mini provides a balanced, efficient option.
• Recently, the xAI team announced major improvements to Grok 2 mini, doubling its speed and slightly enhancing its accuracy after rewriting the inference stack using SGLang.

Why it’s important: Released in August 2024, Grok-2 ranked among the top 2models, receiving good traction on X. With this new improvement, the accuracy improved making Grok-2 mini twice as fast as before. xAI's rapid growth has stunned the AI community, going from launch to a top-ranked LLM in just 18 months.

However, just after the release, Grok-2 beta was under fire for generating misleading, violent, and copyright-infringing images, sparking criticism for its lack of safeguards.

• This includes hyper-realistic depictions of political figures and other sensitive subjects, raising concerns about the platform's impact on public discourse ahead of the upcoming election.
• While other leaders from companies like Google, Microsoft, and Meta apologized when their model-generated images raised concerns, Elon Musk has defended the AI, despite growing concerns and potential lawsuits.

The powerful capabilities of Grok 2 highlight the urgent need for comprehensive AI regulation to ensure responsible development and deployment, prevent harm, and protect individuals and society.

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More AI Highlights:

• China showcased its ambitions in humanoid robotics at the 2024 World Robot Conference, with local companies unveiling 27 new models in hopes of replicating the nation's success in smartphones and electric vehicles. Despite growing interest, challenges like high costs and data limitations remain obstacles to widespread adoption. Link
• Salesforce is launching two AI sales agents, Einstein SDR and Einstein Sales Coach, to automate lead engagement and sales training. These tools, available in October, aim to help sales teams focus on higher-value deals by offloading routine tasks and improving seller skills. Link
• ...

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That’s all for now, folks.

The next edition on gaming will follow tomorrow.

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Talk soon,

– Marc & Team

CEO, FiftyOne Ventures

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