- A hotly anticipated IPO just got more exciting…
- The quantum computing space is making big progress…
- Another leap for this AR innovator…
Short for Metaverse.
Facebook wants it all.
Rather than coming up with a clever and innocuous name like Google did when it rebranded to Alphabet, Facebook is attempting to take over an entire domain.
By doing so, Facebook is trying to claim all of the real estate and be the singular destination – as if there will only be one metaverse.
And while Facebook/Meta has a seemingly unlimited amount of cash to throw at building its own metaverse… it won’t work. There simply won’t be just one metaverse.
Where Facebook/Meta is getting it wrong is that it is applying the same kind of “Web 2.0” logic. This “old school” thinking goes along the lines of… Build the best social media platform (Facebook), best search engine (Google), or best bulletin board (Twitter), and they will all come to use it. Users will provide their data, and the platforms will monetize and control 100% of the revenues and profits.
Web 3.0 doesn’t work like that.
Web 3.0 is far more focused on building an ecosystem that has built-in monetary incentives for everyone. Social media will soon enable consumers who create content and share data to also share in advertising revenues. The same will happen with browsers and search engines – a perfect example is Brave with its native token, the BAT. And Twitter is in the early stages of enabling payments on its own platform using digital currencies.
And the most successful metaverses will not only incorporate monetary incentives but also be economies in their own right. They are worlds within which we will be able to engage in productive activity. Activity that can actually result in income for those who add value to the metaverse.
We’re already seeing this kind of “play-to-earn” model being massively successful in NFT/blockchain-based games. You’ll read about another exciting development in this space in tomorrow’s Bleeding Edge.
But while the perception of activity in a metaverse might seem like play, it will soon be “work” for millions. Entrepreneurs, creators, and businesspeople will soon be manning digital storefronts in metaverses engaged in commerce as their “real job.”
I know that can be hard to imagine, but it’s happening right now. Facebook couldn’t ignore this shifting of the sands right under its feet. It recognized that an industry shift into metaverses – one with built-in economic incentives – is an existential threat to its own business.
So it’s going all in. Facebook/Meta is claiming to spend $10 billion this year alone on this project. More will follow next year.
Its strategy will be to build the most beautiful metaverse with the widest-ranging features to transition as many of its billions of users over as quickly as possible… before they migrate to other worlds. It reckons that if it can do so, it just might be able to keep all of the economic incentives for itself. After all, why mess with the business model when it appears to be working just fine?
I understand its motivation, but it is very short-sighted.
The adoption of new platforms with meaningful incentives is happening at rates that we have never seen before. There are almost too many well-funded projects to name.
Facebook will benefit for years and continue to mine its users’ data across its social media properties. But the Web 3.0 industry is not going to let Meta become “the metaverse.” Just as we play, work, and get entertained at many different places, the same will be true with the third generation of the internet. The difference is, we’ll earn currency as we do it.
And here at Brownstone Research, we’re not just going to watch it unfold. We’re also going to provide the capital to make it happen… More on that in the coming weeks…
3.1 million websites will accept crypto payments…
Payment processor Stripe is the latest to announce its aggressive move into digital assets. And its entrance means sweeping change is coming for daily commerce.
Stripe is a juggernaut in online payments with 3.1 million active websites using its service. This represents over 15% market share among payment processors and translated to $7.4 billion in revenue last year. Stripe has become an absolute powerhouse in payments during the last few years.
Stripe is so pervasive thanks to its API (application programming interface). This allows e-commerce companies to easily add the payment solution to their websites.
Its simple integration has translated to 90% of Americans having used Stripe. That makes it a technology solution that nearly everybody uses, even if most don’t realize it. In fact, if you ever see a user experience like this when checking out at an e-commerce site, you’ll know it’s powered by Stripe:
Stripe Powers Online Checkouts
Over the past decade, Stripe has realized one of the fastest rates of market adoptions I have seen in my career. The seamless technology – which is used hundreds of millions of times a day – has resulted in a private company rumored to be valued at $152 billion.
Stripe is easily considered one of the most hotly anticipated initial public offerings (IPOs) to come. And due to its size, it is unlikely to get acquired beforehand.
That is assuming a company like Amazon does not come in and make an offer. And if it did, the move would certainly raise anti-trust issues with regulators due to its payment system being used across so many countries.
This is why Stripe’s move into crypto is such a big deal…
Stripe’s technology is an enabler. It lets any website receive payment online. And Stripe can upgrade its service overnight to give its users access to new features.
This is why its entrance into crypto is so significant. Once Stripe develops the solution, it will enable 3.1 million websites to accept crypto overnight. Normal people who would not be able to easily transact in crypto will now be able to.
What’s more, Stripe will not focus its efforts solely on bitcoin or a stablecoin. Stripe’s scope is much broader – it aims to support a variety of digital assets.
This will help bridge traditional finance to the crypto payment world. The moment Stripe turns on this feature, we will realize sweeping changes in terms of how we conduct business and transact. This is such an exciting moment for the industry.
And it’s another sign of the potential in the blockchain space… which is why I’m so glad to be bringing these kinds of investments to my readers now in Unchained Profits. If any readers are interested in finding out more, you can go right here for the details.
A quantum computing breakthrough…
The quantum computing industry just witnessed a breakthrough from IonQ, a company spun out of the University of Maryland. We’ve mentioned this name several times before in The Bleeding Edge.
In a recent paper published in the scientific journal Nature, IonQ unveiled its major breakthrough in error correction.
As a reminder, quantum computing represents the future of computing – a literal quantum leap in computing power.
If we think about normal computing, each transistor has two states: 0 and 1. The manipulation of these two states is what makes computers work. Well, quantum particles are similar, except they have many states. This enables quantum computers to tackle complex problems that classical computers aren’t well suited for – such as predicting the weather.
Now, when it comes to these systems, the slightest deviation in the operating conditions of the quantum computer can result in errors. This means vibrations, humidity, or temperature can affect the quantum computer’s output. The slightest imperfections can cause errors in calculations.
Any noise can alter the particles’ state. It is incredible to think about, but it goes to show how precise these quantum computers need to be.
This high sensitivity to the operating environment makes error correction one of the biggest challenges of quantum computing. If you reduce the errors, you improve the accuracy of what is being computed. This is called fidelity.
And this is why IonQ’s breakthrough was so significant. In the paper, the team reduced the overall errors in its system through a process of encoding “trapped ion” quantum bits (qubits). The research demonstrated that it could dramatically reduce the errors in the system and make its trapped ion quantum computer more fault-tolerant by combining a series of trapped ion qubits and managing it with its new error-correcting software.
The trapped ion approach to quantum computing is known for having higher fidelity than other approaches. But the trade-off for the higher fidelity is that trapped ion quantum computing is not as fast as another approach called superconducting quantum computing, which is about 500 times faster. But it’s still very exciting to see progress being made to reduce errors.
Quantum computers are already working and in production. The race right now is to improve fidelity and make these quantum computers more fault-tolerant. This is the most critical path toward a universal fault-tolerant quantum computer.
This is why I’m getting my subscribers into my favorite play on the quantum computing trend right now. I recently unveiled one of the most promising investment opportunities I see in this space to my Exponential Tech Investor subscribers. [Paid-up subscribers can find the issue here.]
If any new readers would like to join us, you can click here to learn more about the research service. Then be sure to check out our October issue for all the details on my quantum computing recommendation.
The Magic Leap pivot…
Magic Leap has been at the forefront of augmented reality technology for years now, but then it fell from grace and has been going through a painful restructuring.
In 2019, Magic Leap was screaming ahead with multibillion-dollar valuations. Its Series D brought in $280 million, resulting in an impressive valuation of $6.7 billion. It had just released its Magic Leap One Headset – glasses with built-in augmented reality.
Here’s a picture of me testing them out in the AT&T store in Manhattan.
Jeff Tests Out Magic Leap
The glasses were extraordinary. It was as if a hole in the wall opened up in front of me. Graphics appeared right before my eyes.
If you ever have a chance to try out a pair, it’s worth doing. You will literally see the future.
But then Magic Leap stumbled. Its much-anticipated consumer version of its technology experienced delays, and it appeared the company was struggling to get the price point down to a level that would result in mass consumer adoption.
Then the company replaced its CEO and eliminated more than 1,000 jobs, and the new CEO shifted the company’s strategy to an enterprise-focused model. The early efforts have not been successful. Magic Leap lost out to Microsoft on a $480 million contract with the U.S. Army to build AR headsets.
The company was close to shutting its doors.
Now it looks like Magic Leap has been thrown a lifeline. Magic Leap announced it just raised $500 million… at a much-smaller $2 billion valuation. That means that anyone who invested from 2016 onward lost more than half of their investment.
Basically, the company is having to recapitalize at a much lower valuation. It is a devastating blow to the previous investors. And is likely why Magic Leap did not disclose the list of its most recent round of investors.
I’m curious to hear who stepped up to fund the company. Are these new investors trying to get in at a lower valuation, or are these existing investors desperately trying to get their money out by saving the company in hopes of an acquisition? These are tough decisions to make for investors.
But this raise is something worth watching. It will give the company the capital that it needs to launch its next-generation AR glasses.
Here is a glimpse of the newest product.
Magic Leap Two
It has a wider field of vision. And the lenses can dim if the user enters a bright room or sunny place. This helps make the images clear even if it is a bright environment.
The glasses are also not as big and bulky as the last version. They still do require a tether (cable) to a computing device.
Magic Leap’s focus on enterprise is interesting, as most of the industry is racing ahead toward consumer-grade products. And what I experienced with the technology was very suitable and compelling for consumers. It feels to me that the company has some incredible technology, but it is refocusing on a much smaller market. That’s not the DNA of the company.
I believe that given the new CEO’s enterprise background, the goal is to win a few enterprise deals and try to position the company for a sale.
While this might be a decent outcome for many of the investors, I would hate to see this great technology get lost within a large enterprise player. It really needs a major consumer electronics player to step in and commercialize this technology at scale.
This technology is awesome. It is consumer-grade, immersive, and interactive. The glasses are extremely responsive. It is why I’m excited to see Magic Leap reveal its next-generation headsets, which are expected to be released in early 2022.
And whether we as consumers ever get a chance to enjoy Magic Leap’s tech will depend heavily on whoever acquires the company. There are some amazing links between this technology and what is being built out right now in metaverses that would be such a great fit…
I just hope the tech doesn’t go to waste. Enterprise focus or not, I’ll be keeping a close eye on Magic Leap.
Editor, The Bleeding Edge
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