- China’s digital currency is a geopolitical power play…
- Democratizing AI with this new learning method…
- We’ll be rooting for this COVID-19 therapy…
Dear Reader,
I want to thank those of you who were among the more than 25,000 people who took the time to join me for my “Beyond Exponential” event last night.
Traveling across the American heartland, I saw evidence that we are at the very beginning of the next major exponential growth story in technology.
All across the Midwest, I was able to experience this technology for myself. I hope the footage from my travels that we aired last night made the potential of this story clear.
And as I demonstrated last night, I believe that savvy tech investors who are aware of this story can build a million-dollar tech portfolio from scratch with just a handful of stocks. We are in for an exciting ride these next few years.
For anyone interested but unable to attend my presentation last night, the replay will be available to readers of The Bleeding Edge for just a few more days at no cost. You can find it right here. Please make sure you don’t miss out.
And thank you again for taking the time to read and enjoy The Bleeding Edge.
Let’s turn to today’s topics…
Testing for China’s CBDC is picking up…
We talked about the central bank digital currency (CBDC) that Russia is working on for the first time yesterday.
Today, we have a big update regarding China’s own CBDC – it has been spotted out in the field.
The People’s Bank of China (PBC) held a lottery for citizens who wanted to be the first to test the CBDC in the city of Shenzhen. Two million people applied.
Of those, 50,000 citizens each received roughly $30 worth of DCEPs, which is China’s new digital currency – digital currency electronic payments (DCEPs).
In total, the PBC distributed 10 million DCEPs. With each DCEP pegged one-to-one with the renminbi, this first test batch was worth about $1.5 million.
To access their DCEPs, these citizens simply download a digital wallet on their smartphones from a state-run application. Then they can spend the money as they please.
The government and state-selected banking and industry partners had been testing DCEPs for almost a year. And this is the first time that the new digital currency has been pushed out to experiment with citizens.
We know that China has been testing its digital currency with leading Chinese companies like Alibaba and Baidu as well as within its own banking sector for the last year or so.
Now it’s putting the CBDC into people’s hands to see how it does out in the wild. China will test the app, see how the downloads work, and analyze the spending patterns. This is the last step before a wider launch.
And we now have additional details on the CBDC itself.
It is a form of blockchain technology with asymmetric cryptography. That means DCEPs come with a pair of public/private keys to identify ownership. This is the same as most decentralized cryptocurrencies like bitcoin.
However, the blockchain is not distributed or transparent. Nobody can see what transactions are happening except those who are granted access by the Chinese government.
And, of course, there is no anonymity. The central government can see how many DCEPs everyone has. It can track and tax the transactions that people make with the currency. Big Brother sees all.
That said, the CBDC does employ what the People’s Bank of China is calling “controlled anonymity.” The blockchain was designed so that two parties can send each other money without anyone else, other than the Chinese government, knowing about it. This is a big deal.
If we think about our global financial system today, governments and banks can track all the transactions flowing through the system.
This makes it difficult for illicit activity to take place through the financial system. That’s why the preferred medium of exchange for illegal deals is cash, which is very inconvenient.
However, within China’s CBDC system, illicit transactions that have the blessing of the government could occur without anyone else knowing about them…
With this system, China can shield its activity from the rest of the world if it chooses to do so. It could engage in questionable geopolitical deals designed to increase its power on the global level, and there’s nothing other nations could do to stop it. In fact, other nations would not realize that something happened until after the fact.
Make no mistake about it – this is a geopolitical power play. China is positioning itself to be a global power within a radically different financial system.
I am very curious to see how many other countries follow suit, or if a blockchain-enabled ledger evolves as a record of cross-border transactions. Blockchain project Ripple is certainly trying to position itself to fill that role.
A revolutionary breakthrough is happening in AI right now…
An interesting research paper on artificial intelligence (AI) out of the University of Waterloo in Ontario, Canada, just caught my eye. The paper covers something called “less than one”-shot learning (LO-shot learning). This is bleeding-edge tech…
When I look back to last year, the mainstream thinking in the artificial intelligence community was that we needed massive data sets to train AIs. The theory was that the more data and computational power applied to training, the smarter and more functional the AI would be.
In that world, only large corporations and governments would have the resources to develop and train AIs.
Over the course of this year, we have learned that we can train functional AIs on much smaller data sets. This is largely thanks to the application-specific semiconductors that have been designed especially for AI and machine learning.
These semiconductors’ power algorithms can infer from smaller data sets, making the AI just as “smart” as an AI trained on a massive data set.
Now, with LO-shot learning, it appears we can train AIs on tiny datasets. This is something that none of the experts thought was possible. In fact, many still don’t.
Yet the LO-shot learning paper outlined a training method that creates a small collage of images strategically designed to facilitate faster learning for an AI.
This is something that can be done without much computing power, and it has already proven to be effective. It is nowhere near perfect yet, but it is showing promise.
This method will certainly be a keen area of research throughout 2021. It may be a major part of the AI community’s focus next year. LO-shot learning could completely democratize access to AI.
In a world where the costs of computational power and training sets are dropping to near zero, that would mean that any one person or company will be able to innovate and deploy AI technology. There would be no constraints other than knowledge.
This would drive unbelievable innovation within a very short time frame and further accelerate the adoption of AI at a global scale.
So this is certainly one of the most important developments in the field. It’s not an exaggeration to say that LO-shot learning will be a revolutionary breakthrough if it can be perfected.
A major biotech development that no one is talking about…
While the world has been distracted by everything going on with COVID-19, something extraordinary happened. A therapy was just approved for Ebola.
And nobody noticed.
The Food and Drug Administration (FDA) just approved an antibody cocktail developed by Regeneron called Inmazeb. It is approved to treat Ebola in both adults and children.
This is certainly great news, and there are wider implications here.
Inmazeb is made of a combination of three monoclonal antibodies. This is the exact same approach that Regeneron is using to develop its COVID-19 therapy.
So we know the mix of specific antibodies works for Ebola. And we have good reason to believe it works for COVID-19 as well.
Readers may remember that President Trump just took a COVID-19 treatment and bounced back in less than three days. Well, that was Regeneron’s antibody cocktail designed for COVID-19. It is just anecdotal, but the therapy is showing great promise.
I am expecting that it will receive FDA approval for emergency use authorization (EUA) in the next several weeks and, eventually, a full FDA approval for COVID-19.
It is worth noting that Ebola is a far more dangerous virus than COVID-19.
Ebola’s mortality rate is well above 50%. And in some places like Liberia, the mortality rate was as high as 80%.
Compare that to COVID-19, where we now know that the global infection fatality rate (IFR) is between 0.15–0.20% for all age groups and 0.03–0.04% for those less than 70 years old.
Yes, this means for those younger than 70, the IFR is less than it is for influenza.
So this is a great development. As I’ve said before, approved therapies and vaccines for COVID-19 will go a long way toward helping us get back to “normal.”
Their sheer existence, not their actual use, will help stop the insanity of how so many countries have reacted to this pandemic.
What’s more, this is a validated approach for future coronaviruses as well. COVID-19 wasn’t the first, and it won’t be the last. We now know that antibody therapies work well on this type of virus.
In fact, I found out recently that I still have antibodies in my system from the SARS outbreak in 2003. I was living in Tokyo at the time and traveling to Hong Kong monthly. I was there at the very height of the panic, a moment I remember clearly.
I didn’t even know I had SARS, but recent antibody testing results revealed that I still carry antibody immunity to that virus. I was clearly asymptomatic at the time.
So it’s clear now that antibody therapies are a great approach. The right antibodies can create immunity for years, if not decades.
We’ll be cheering for Regeneron’s COVID-19 therapy in the coming months.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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