Public Blockchain Pretenders; Tigercub Roboadvisor Roaring; Effortless AI World Building (via Autonomous ?NEXT)

Hi fellow futurists -- here are our top 3 favorite thoughts.

The Blockchain Pretenders.  

Welcome to the first rumblings of Crypto Eighteen. We are calling it that to make the whole year more valuable! Apparently this is a tactic that works -- by our count, some 31 public companies have already jumped on the crypto bandwagon by either adding Blockchain to their name or putting out a press release announcing a pivot to Blockchain technologies (including our favorite, Long Island Iced Tea becoming Long Blockchain Corp). If history is a guide we’ll see 100+ instances of this in 2018 – an academic study found that in the Dot Com bubble the instances of name gaming went from 13 in 1998 to 126 in 1999.

The DotCom name game dropped to 36 in 2000, and from late 2000 through 2001 the trend completely reversed with 57 companies deleting DotCom from their names. Oops! But let’s be honest: No one likes to talk about hangovers in the middle of a party. Turning to performance, the median stock in our Blockchain sample is up 265% in 2017. This puts the Dot Com name game to shame, where stocks with name changes only went up 118%. Paltry compared to the rise of Bitcoin, but what isn't. And if you haven’t started hating yourself for not being a Blockchain millionaire yet, let us just point out that these "Blockchain" companies have a combined market cap of $22bn.

Without further ado, here's the sample: The Crypto Company (CRCW), Natural Resources Holding Ltd (NRHYY), Global Blockchain Technologies Corp (BLKCF), Intercontinental Technology (RCGR), LongFin Corp (LFIN), UBI BlockChain Internet (UBIA), Riot Blockchain (RIOT), MGT Capital Investments (MGTI), DNA Dynamics (DNAD), Online Blockchain PLC (OBC-GB), Digital Power Corp (DPW), Nodechain Inc (VPTK), Siebert Financial Corp (SIEB), Xunlei Ltd (XNET), Seven Stars Cloud Group (SSC), Overstock.com (OSTK), US Global Investors (GROW), BIG Blockchain Intelligence Group (BIGG), Net Element (NETE), Gain Capital (GAIN), Nxt-ID (NXTD), NQ Mobile (NQ), Long Island Iced Tea (LTEA), Hive Blockchain Technologie (HIVE), 360 Blockchain Inc (BKLLF), Social Reality Inc (SRAX), On Track Innovations (OTIV), Future FinTech Group (FTFT), Chanticlear Holdings (BURG), Marathon Patent Group (MARA), Blockchain Group (364-HK)

We don't recommend anything about these companies, other than noting that they exist, are doing this, and are gaming the pinballing valuation mechanics between the public, private and crypto markets. Speaking of, did you say Uber's price collapsed by $30 billion?

Source: Autonomous Research

Tiger Robo Roaring 

Hmm. So one of the most cut throat hedge funds, Tiger Global Management, just led a $75 million round in #2 American roboadvisor Wealthfront. There is some irony about an alpha-chasing investment product manufacturer putting in a growth stage check into a passive-ETF asset allocator that targets techy Millennials. Is Wealthfront the ultimate tiger cub? Is this the death knell of equity alpha? Or maybe just another example of an asset manager investing in a distribution play to the consumer, like BlackRock and FutureAdvisor, Wisdom Tree and AdvisorEngine, or Jemstep and Invesco? Regardless, we wanted to kick the tires around what this $75 million check could mean to the $9 billion RIA. 

Raising money signals multiple things. First, it signals the need to raise capital. This can be driven either by a large cash burn, or the desire to scale quickly to take over a market, or both. In the case of B2C digital wealth, we know that there are no winner take all dynamics for the first wave of roboadvisors by watching the AUM trajectories of the companies in the space. For asset allocators, AUM growth is linear, not exponential. Acorns, Stash, Robinhood, Coinbase are different. Perhaps Wealthfront can tap into their customer acquisition dynamics and product set to open new options (i.e., add crypto like Revolut and some money movement AI). Or perhaps $25 billion in assets is breakeven, and the venture play is for a much longer time horizon, like 10 years from today. 

Second, raising money signals the company’s skills at raising money. This can be dependent on product traction, the impression of equity scarcity, and personal networks. In this regard, we do think that Wealthfront has a powerful hand. Living at the heart of the Valley and being run by a well respected venture capitalist implies continued access to capital given sufficient company progress. But, in the global landscape, capital is cheap. If Softbank can write $100 billion of venture checks into American fintech, capital access can't be the determining long-term winning factor. So how is Wealthfront going to do against Betterment? Check out the customer demand below and let us know what you think!

Source: Google Trends

Effortless AI World Building. 

We are tempted to write more about Crypto, and forks in particular, but let's bump that to next week. Instead, some light reading about virtual spaces and using artificial intelligence to build a completely new reality. No big.

We were awestruck by two projects. The first allows sketches of objects to become rendered images using generative neural networks. We've shared similar versions of this idea -- from Google's open source library of 3D rendered models to 3D gestures that map onto a space of virtual objects -- but this particular application shows how simple it is to go from concept to realistic (ish) environment. Yes, it's still ugly and messy, but for how long?  

The second project does an even more impressive trick. It takes the visual environments rendered in the 3D bubbles (or "360 video") of Google Maps and generates background sound for the environment. Note that this isn't the actual recorded sound, but a neural network hallucinated auditory experience that is correlated to the image mathematically. Listen to the video for full effect.

The melding of physical and digital spaces requires steps like this to become scalable and repeatable. We believe that once this type of technology is polished around the edges, augmented reality experiences and commerce will become profound.

Source: Prosthetic Knowledge, Anastasis Germanidis, Cristóbal Valenzuela, Qosmo

Thanks for reading!

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