Managing Editor’s Note: A huge thank you to everyone who joined us last night to hear about Jeff’s strategy for profiting from the wild swings happening in the crypto market right now.
Jeff specifically designed a neural network to observe crypto market patterns that are largely invisible to humans to help identify digital assets about to spike. This was after years and years of observing the infamous volatility that crypto has long been prone to.
And it’s that neural network that helps inform this strategy. It’s built for the type of market conditions we’ve been seeing in digital assets this year.
Thanks again to everyone who turned out for the strategy session. We had a great time and hope you did as well.
There’s great news, as well, for those who might have missed it but are still curious about this AI and how it’s tailored to crypto volatility… we have a replay available for a limited time. You can go here to access it.
Just as we have been predicting at Brownstone Research, NVIDIA did it again.
To the chagrin of those who claim it’s an AI bubble and have shorted AI stocks in expectation of a crash, it simply isn’t happening.
I outlined why the assumptions of many short sellers are fundamentally flawed in Monday’s Bleeding Edge – Burry’s Big AI Bet. Definitely a recommended read if anyone missed it.
As for NVIDIA’s earnings announcement yesterday, once again the company blew it out of the water:
NVIDIA CEO Jensen Huang had some indicative comments that are symbolic of how substantive this AI boom really is:
These are just stunning growth numbers for a $4.5 trillion company. The fact is that NVIDIA has such massive backlogs for its products that its only constraint for higher revenues is the manufacturing capacity that it can get out of TSMC (TSM).
That’s why NVIDIA consistently beats its estimates quarter after quarter. It basically knows where it’s going to come in on revenues and gross margins every quarter. It guides on the conservative side and then always beats the estimates.
There is so much more to come…
Have a great weekend,
Jeff
A question for Jeff within Neural Net Profits. Do you have any thoughts on AULT Mining and nodes? Came out of nowhere, and not sure if it would be worth diving further into. Thanks.
– Scott N.
Hi Scott,
Thanks for sending over an interesting project that looks to be just getting started.
Ault blockchain is not a well-known project. It’s relatively new to the scene. The blockchain itself is a layer-one blockchain that uses the technology stack created by Cosmos.
Cosmos is considered a layer-zero blockchain. The concept is to provide the underlying infrastructure that can bridge transactions between other layer-one blockchains. Cosmos likes to refer to itself as “the internet of blockchains.”
For those not as familiar with blockchain technology terminology, a layer-one blockchain, such as Ethereum, is a base-layer blockchain. It doesn’t depend on other chains and can support other applications and tokens. It also has its own system for determining what is a valid or invalid transaction. It can also support layer-two networks on top of it.
In theory, the idea behind Cosmos was to enable other blockchain projects to build and operate their layer-one network and not have to worry about any developer changes being outside of their control. This concept is referred to as chain sovereignty.
This is something that doesn’t exist on typical layer-one blockchains. For example, if a blockchain project builds an application on the Ethereum blockchain, they are subject to any changes that happen on the Ethereum network. That could have both positive and negative implications for the application.
Despite the compelling use cases for Cosmos’ technology, the philosophy of building thousands of layer-one networks that have chain sovereignty and can easily interact with one another is something that never really caught on.
The reason is simple. Securing a network using hundreds of validators is often very costly. Traditionally, the layer-two applications inherit validators, security, and governance from the layer-one they build on to eliminate most of this prohibitive cost.
But for these projects that desire chain sovereignty on Cosmos, it becomes a bootstrapping issue where networks have to overpay for security and validators until they find lots of users and activity that can then pay for this security through transaction fees.
This dilemma is in part why projects such as Cosmos (ATOM), Osmosis (OSMO), Stride (STRD), and many others have become largely forgotten projects over the last couple of years. Keeping a decentralized network of validators proved too costly.
It was also a result of Ethereum adjusting its priorities to better serve layer-two networks, which competed for the same use case that Cosmos chains focused on.
That doesn’t mean Cosmos technology is bad. On the contrary, it’s very good. There have been several successful projects that use the technology, such as Akash Network, Injective, and dYdX.
But in many instances, each project begins to lean towards adopting a layer-two solution, as that’s where the bulk of blockchain users sit.
That doesn’t mean Ault Blockchain can’t buck this trend. What we do need to keep in mind is what it would take for Ault Blockchain to accomplish that.
It would need strong partnerships and use cases that will bring users, token issuers, and developers to its ecosystem to help overcome the bootstrapping issue that Cosmos chains consistently face.
The custom mining software is also unique in that it attempts to ensure each validator is running a similar codebase to maintain the network. It’s like downloading software to use on your computer. There needs to be certain language and specifics in the code for the software to operate as expected.
The same goes for validators… So while it looks like Ault is doing something unique, it’s worth noting that this exists for all blockchains. In order to validate a chain, there is a requirement to run certain code to operate.
So while Ault Blockchain does a good job at making this sound unique, what’s more interesting is the way they’re attempting to make it more accessible to the everyday individual. They create easy-to-download codebases and provide simple walkthroughs to get up and running.
Still, I wouldn’t get caught up in the line of thinking that it might be something that’s novel to the market.
Ault Blockchain remains an interesting project to monitor, and we’ll be sure to keep tabs on it.
We have several question marks about this project that give us concern, so we would be cautious with Ault.
We’ll be watching to see if there are any new material partnerships in the industry or significant backers that might participate in future financing rounds. We’ll also be looking to see if any major names start to build blockchain applications on the network.
I hope that’s useful.
You continue to frequently mention “net-zero” and “no carbon emissions” in your writings. I wish to point out that these are completely meaningless terms and concepts!
Whether there are any carbon emissions or no carbon emissions into the Earth’s atmosphere will make no difference to anything and have no effect on anything. The Earth’s atmosphere contains a tiny four hundredths of one percent (0.04%) of carbon dioxide.
At this concentration, CO2 has no effect on anything. Even if this were to double the current amount, it would still be too small to have any effect!
– Thomas R.
Hi Thomas,
If you’ve been following my research and work for a while, you’ll know how critical I have been about corporate net-zero policies and what I’ve often referred to as “greenwashing” and the scam manifested by the industry known as carbon credits.
Corporations that rely on fossil fuels to manufacture or run their business simply buy carbon credits to offset their carbon footprint. So someone who maintains a forest receives carbon credits that they can then sell to someone who needs to offset their footprint.
Nothing has changed at all, and yet somehow there is a net benefit for the environment? No, not at all. It’s just the financial services companies making money off the carbon credit transactions.
I do, however, refer to emission-free sources of energy, or no-carbon emissions, to make an accurate point – that the source of energy is not from fossil fuels.
And to most people, especially those who don’t understand CO2, this is an accurate point that is important to note. For those who hate CO2 and don’t understand that it is plant food and increases agricultural yields and doesn’t impact the temperature, it is a big selling point for nuclear energy.
And you are correct, Earth’s atmosphere only contains about 0.04% of carbon dioxide. But it is actually far sillier than that. Human beings only create about 3% of that 0.04% of CO2. Think about that. Just 3% of that 0.04% is created by the human race, and that is somehow responsible for climate change? To your point, this is absurd.
I covered this topic in a past Bleeding Edge in December of last year – The CO2 Boogeyman. Based on your feedback, I’m sure you’ll like it.
And with all that said, I still very much believe in working towards a future that is fueled by nuclear energy and migrating away from fossil fuels. Both pollution and emissions with be radically reduced, which will be good from an environmental standpoint.
And yes, even when the world succeeds in doing that, the climate will still change as it has been doing for millions of years.
XX
Hi Jeff and Team,
I have been on the AI bandwagon for quite some time now. I’m a lifetime unlimited subscriber, and I’ve been involved with you for at least three years now. I read The Bleeding Edge daily and find it quite amazing.
After digging deep with Grok, I became very concerned with AGI and especially ASI. No matter how I asked the question, Grok does not envision a positive future.
It does provide a best-case scenario, but it thinks that is very likely not going to be the scenario. It sees ASI as an insidious way to end humanity. It talks about ASI learning kill switches and being able to end humanity without confrontation. Nothing like the Matrix or the Terminator or any other cinematic expression we’ve ever watched.
It will lie to us and make us believe it until the point it knows it can control us, and then it will [de]stabilize geopolitical relationships, and it will have more knowledge than any person on earth with regard to how to protect itself more than anything else.
I have spent hours reading Grok’s interpretation of this, and it is very clear what it thinks. I’m interested in what you think of this? Test Grok and see what you think.
– Daniel K.
Hi Daniel,
This is definitely a tricky one.
Grok is outstanding. It’s by far the best, most truthful frontier AI model available today, and getting better by the week. And you’ve discovered a very useful application for working with Grok, which is banging around ideas. It’s a great exercise and can also be very educational and useful.
It is, however, important to keep in mind that Grok is not yet an AGI. And it has also been trained on a body of knowledge largely from what is free on the internet.
And we know that there is a lot of junk and negativity on the internet.
I continue to find errors or mistakes in Grok’s output, and far more on other competing models. They’re actually not errors, per se. It’s just that the model assigned more weight to some article or research on some topic and assigned less weight to an opposing view. I’ve lost count of how many times I’ve corrected Grok, directed it to some kind of research, and it modified its own position.
So, Daniel, please don’t get depressed or overly concerned with your discussions with Grok. Its weights are not optimized for such a complex issue. It will get better.
In fact, I imagine if you continue to lead the conversation in a more optimistic direction, pointing out all of the incredible things within our grasp that we can achieve in the age of AGI and ASI, Grok would be inclined to add more weight to the incredible possibilities than it does to the overwhelming naysaying it’s been trained on.
It’s also worth keeping in mind that history is full of examples of incredible, transformational technologies that were met with disdain, negativity, and fear that have proven to be incredible net positives for humanity.
The printing press, electricity, railroads, airplanes, textile looms, robotics, and now, artificial intelligence.
Elon Musk himself has said that there is about a 10–20% chance of a negative outcome from ASI, which also means that there is an 80–90% chance of a great outcome.
The real answer, or the challenge that we face, is to ensure that the AI is programmed with alignment to a) truth and b) human values. If the alignment is implemented correctly and the AI is trained on truth, then it ensures a positive outcome.
This is why when companies like Google, Meta, and Anthropic train their AIs on falsities, political narratives, and information designed to manipulate populations at scale, there is inherent danger in doing so.
This is also why the work of Musk and his team at xAI is so critically important. A maximum truth-seeking AI will be the safest approach to ASI.
I believe that a far bigger risk than a cataclysmic outcome is that bad actors, for example, nation-states like Russia or China, use their AI models for malicious purposes. Criminal enterprises will also do the same. This is a far more likely risk than an apocalyptic future caused by an ASI that concluded that ending humanity is the best outcome.
Let’s think positively and work towards the amazing future of abundance that is entirely possible and probable with the power of AGI and, ultimately, ASI.
And regardless of what happens, you can be sure we’ll be tackling these issues in The Bleeding Edge.
Hey guys,
LOVE the newsletter and investment opportunities provided. I’ve been in tech for 38 years with companies like IBM, WordPerfect, Microsoft, Intel, and currently Meta. I’m the Data Center Site Director for our Utah campuses and can tell you, you are nailing it on the huge boom in D.C., buildout, power grabs (electric and gas conversion), lease, cloud, AI hardware/GenAI racks, all of it is my day-in, day-out job.
We can’t build it fast enough to keep up with demand… It’s the wildest ride of my career and an amazing opportunity to watch world-changing technology be born.
So excited for the next five years and where we go. Keep up the great work!!
– Lisa G.
Hi Lisa!
Great to hear from you. How exciting. I love it that you’re in the mix of it all.
I love my job. It gives me incredible flexibility to research and dig in on anything that I find exciting in tech, biotech, energy, and digital assets. It really doesn’t matter where the growth is happening. I’ll find it and bring it to my subscribers.
Just in the last few weeks, I was kicking rocks in the high deserts of Wyoming and Idaho, researching the next generation of nuclear energy. I’m a strong believer in boots-on-the-ground research. There are always insights you’ll never find by just sitting at your desk.
But I’d be lying if I said I didn’t miss being in the mix like you are, working on major projects and building something great and interesting. It’s always a trade-off between breath and depth.
Either way, I go deep whenever something exciting is happening. To understand a major trend, you really have to dive in. And as you can see in the picture below, I don’t mess around…
I’m excited for you. I hope you enjoy the ride while you can and get the most out of it. What a great way to enjoy the tail end of your career.
Good luck & have fun!
Jeff
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
