- Microsoft Windows’ days could be numbered…
- This new blockchain player offers customizable privacy…
- The record industry’s greatest enemy wants to become friends…
Things have changed…
For the better part of two years, markets have enjoyed a nearly uninterrupted bull run.
From the fear-driven pandemic lows set in March 2020, all three of the major American indices roughly doubled by the end of 2021. Companies went public at absurd valuations.
And thanks to services like Robinhood, a new generation of young investors entered equity and crypto markets.
I predicted this during the depths of the fear-induced selling in early 2020. I encouraged my readers not to sell, and I even recommended several great companies while most investors were headed for the exit. It was a controversial decision, but it was absolutely the right call.
In December of 2020, one reader wrote to me and said:
I thought I was going to have a heart attack watching my sometimes daily balance drop $10,000.00. I am telling you this because you are the one who has helped me gain back my money and now I am at the highest I have ever been.
– Denise S.
I was thrilled that my research helped guide readers through a turbulent time in the market.
And here we are once more. Markets are volatile. Inflation is at a 40-year high. Energy prices are reaching record levels. And of all things, sadly, we have a war in Eastern Europe.
Many readers are probably feeling like Denise right now, watching their portfolio balance fall seemingly every day. We’re all experiencing the same thing. Times like these are trying. They make us second guess ourselves and wonder when things will turn around.
For starters, it’s important we know that things will absolutely get better. But as I mentioned, this is a very different environment that we’re in. And the way that we, as investors, approach this market must change as well.
For two years, some very strange things happened. Companies traded at valuations that made no sense. “Meme stonks” spiked seemingly out of nowhere. And many believed that equity and cryptocurrency markets could “only go up.”
I was so alarmed at this trend that I prepared a presentation in the late summer of 2020. I predicted a “second wave” of stock market selling. And I profiled several “toxic” stocks to avoid at all costs. And the peak-to-trough losses for some of those companies are truly staggering:
Zoom Video Communications (ZM): -83%
Fastly (FSLY): -89%
Rivian Automotive (RIVN): -79%
Snowflake (SNOW): -58%
Coupa Software (COUP): -75%
I don’t share this to scare us or to rub salt in any wounds. But it’s important we understand that things have changed. Valuations matter. Picking great – not just “trendy” – investments matters.
And while volatility like we are seeing today is uncomfortable, it also presents opportunities…
Environments like this can be perfect for short-term trading strategies. Ideally, we want to utilize a rules-based trading strategy that removes all emotions from our decisions. That’s precisely what I have created… Actually, it’s something even bigger.
For the first time in Brownstone Research history, we will be entering the fast-paced world of active trading. Specifically, we will be entering the explosive market of cryptocurrency trading.
For five years, I have been secretly developing a bleeding-edge artificial intelligence (AI). This isn’t marketing hyperbole.
It’s a real AI that runs on massively powerful computing systems every day. It is a neural network designed to do one thing: spot trades on the verge of an explosive, short-term move higher.
We may be wondering. Why deploy a neural network for active trading? And why now?
For one thing, this neural network will allow us to “cut through the noise” of market activity. There is simply too much data in digital asset markets for any human to make sense of.
But there is a certain “magic” to neural networks. They can discern order from chaos. A well-designed neural network can spot patterns that the smartest humans, or teams, simply cannot see.
For another, this neural network is always learning and improving. With markets changing every day, it’s imperative we have a system that can adjust to new information. And unlike human beings, an AI never makes an emotional decision. It relies on hard data.
And finally, I have designed this neural network to protect investor capital. That means the neural network will alert us to when a trade has turned against us and will signal that we exit our position to protect our investment.
Things have changed. As investors, we must change as well. I’d like to show all readers what I’ve created, and why this machine will lead us to another profitable year with some of the most explosive investments in history.
To get the full story and witness the full unveiling, please go right here to reserve your spot for a special investing summit tomorrow evening.
This AI company could make Microsoft obsolete…
A new artificial intelligence company just formed, and it could be an absolute game changer. It may literally transform how we interact with computers.
The company is Inflection AI. And it sports a superstar team.
Billionaire entrepreneur Reid Hoffman founded Inflection AI. This is the first company Hoffman has started since he sold LinkedIn to Microsoft for $26.2 billion in 2016.
And Hoffman is teaming up with DeepMind cofounder Mustafa Suleyman and one of his key researchers, Karén Simonyan.
As regular readers know, DeepMind has been making breakthroughs left and right. And Suleyman worked on some of the company’s biggest accomplishments. He had a major hand in both AlphaZero and AlphaFold.
AlphaZero was an AI that learned how to play chess, shogi, and Chinese Go… and it ended up beating human grandmasters in each game.
AlphaZero’s mastery of Go was especially impressive. The game is so complex that it is impossible to map out every potential move. So, the AI had to master pattern recognition to “think” like a human… at a level far above the grand master of the game.
And AlphaFold is arguably one of the biggest scientific developments of the century. AlphaFold can accurately predict the folding of a protein based solely on its amino acid sequence.
In simplest terms, protein folding determines if a pharmaceutical will be able to bind to a protein and be effective. And AlphaFold demonstrated the ability to be 95% accurate with its protein folding predictions.
So Suleyman is quite accomplished in the field of AI. And he’s now bringing that expertise to a brand new startup.
Inflection AI is thinking big.
The company envisions a world in which speech, not keyboards, controls computers. And the team plans to build an entirely new operating system to make that a reality.
To me, this could blow the doors off an entire industry. This is an AI-based operating system that could make keyboards obsolete and potentially even remove the need for an operating system like Microsoft Windows. Software intelligence like this could be the beginning of completely rearchitecting our computer software systems.
I’ll paint the picture with an example…
Many of us pay our bills online each month.
We use our mouse to open our computer’s web browser. Then we type in the company’s website using our keyboard. Once on the main site, we type in our username and password and click “Sign In.” Then we navigate to the payment portal and input our information to pay the bill.
What if we could simply issue a command to the computer and have it handle everything for us? “Pay my mortgage bill using my primary bank account.” Done.
And let’s take this a step further.
Right now, we need to install software to do specific tasks. And this requires us to know what software we need for each task.
What if we could tell our computer exactly what we want to accomplish, and have it figure out the best approach? That would open the door to applications that we haven’t even thought of yet.
So Inflection AI could usher in the next generation of computing. It’s a world where humans control computers by talking to an AI directly. The keyboard and mouse would disappear very quickly.
Of course, this vision is only possible with advanced AI that can understand human speech and act accordingly. That’s the key.
So this is an incredibly exciting project. We’ll be watching Inflection AI very closely going forward. Let’s add this one to our early stage watchlist.
A new competitor to Ethereum…
A new company called Espresso Systems is making waves in the blockchain industry and creating some excitement.
This is a company with major ambitions. The goal is to build a blockchain that features both privacy and low-cost transactions. These are two areas that popular blockchain Ethereum has struggled with.
Stanford’s cryptography lab spun out Espresso. And Espresso just raised $32 million in an early stage funding round. Among the backers were Greylock Partners, Electric Capital, Coinbase Ventures, and venture capital (VC) giant Sequoia Capital.
These are some heavy hitters in the space. And their backing speaks to Espresso’s vision.
Espresso is building a layer-one blockchain. As the name implies, a layer-one blockchain is a foundational blockchain upon which many applications are built. And as we would expect, there aren’t too many of these.
Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) are examples of widely deployed layer-one blockchains operating today.
Layer-two blockchains then tie into these primary networks to increase scalability and add features.
As Unchained Profits subscribers know well, most of the action is in the layer-two realm right now. That’s largely because it’s easier to find a niche in that space. It’s much harder to compete with the layer-one giants.
So Espresso is certainly swinging for the fences here. And the team is taking a smart approach.
Ethereum has seen an explosion of transactions on its blockchain with the rise of non-fungible tokens (NFTs) over the last 18 months or so. This has driven up transaction fees substantially.
As I write, the average Ethereum transaction costs over $8.50 to complete. And that’s down from over $50 back in January.
This makes smaller transactions less viable. Who wants to buy a $10 NFT using ETH if it’s going to cost an extra $8.50 to do so? That’s the equivalent of an 85% transaction fee.
Espresso seeks to solve this problem. Its blockchain will utilize a custom “proof of stake” model that will keep transaction costs low, even at high volumes.
In addition, Espresso will use unique smart contract technology that allows users to set the privacy level of every transaction they make.
Transactions can be fully public. They can be completely private. And users can make transactions visible to designated parties but private to everybody else.
This kind of flexibility has not been possible before. And there are all kinds of applications here.
For example, there’s a big push right now to move real estate transactions onto a blockchain. This would make the process of buying real estate uniform across jurisdictions, and it would cut down on fees tremendously.
Well, all real estate deeds must be a matter of public record. If someone sold a property on the Espresso blockchain, they would need to designate that transaction as public.
On the other hand, other kinds of business dealings between two parties should not be disclosed to the public. On Espresso, those transactions could be private.
Think about scenarios where you have three or more parties involved in a contract. The general contractor model is a good example of this. Consumers hire general contractors to complete a job, and the general contractors then hire sub-contractors to do specific tasks.
With that arrangement, each party needs to see the transactions made between the other parties. That’s how they ensure that everything is done according to the contract.
This is a perfect use case for Espresso’s third privacy option. Transactions can be public to the designated parties, but they would remain private to everybody else.
So I see this as a great concept. The ability to toggle transaction privacy is a great feature that would benefit many different applications.
And get this – Espresso is building this smart contract technology to be compatible with Ethereum. That will make it easy for Ethereum users to move transactions over to the Espresso blockchain at will.
Talk about a shrewd move. This puts Espresso in a position to immediately compete with Ethereum for market share.
We need to keep a close eye on Espresso Systems going forward. This project could take the blockchain industry by storm later this year.
And if any readers are interested in learning more about my Unchained Profits research service, you can go right here to get the latest.
LimeWire is back from the dead…
We’ll wrap up today with a fun story. LimeWire is back.
For unfamiliar readers, LimeWire was one of the original peer-to-peer file-sharing platforms two decades ago. These platforms allowed users to share songs with each other for free. And it was as easy as searching for a song and pressing download. That had never been possible before.
The original file-sharing platform was Napster. It had a great run from 1999 to 2001. But then it lost a copyright lawsuit that the Recording Industry Association of America (RIAA) brought against it, and it had to shut down.
LimeWire launched in 2000, and it worked much like Napster. In fact, many Napster users migrated over to LimeWire when Napster shut down.
LimeWire managed to operate for nearly a decade after Napster’s fall. But in 2010, LimeWire lost copyright lawsuits to both the RIAA and several record companies.
Humorously, the RIAA initially claimed $72 trillion in damages. At the time, that was a greater sum than the entire world’s gross domestic product (GDP), which hit $66 trillion in 2010.
In the end, LimeWire settled the lawsuits for $105 million and went defunct that same year. I doubt anybody thought much about LimeWire afterward. Most assumed the brand was dead.
Just last year, two brothers from Austria quietly bought the rights for LimeWire. And they just announced plans to relaunch LimeWire as a marketplace for music-related NFTs.
What a play.
The platform will host songs, merchandise, music-related artwork, and possibly even concert packages – all in the form of NFTs.
And in something of an ironic twist, LimeWire is looking to partner with music brands and artists to create these NFTs. The record industry’s greatest enemy wants to become friends.
As for the marketplace itself, LimeWire is building a platform that will transact directly in U.S. dollars. This will open the door to wider adoption because it eliminates the need to transact in digital assets. That’s something many consumers still aren’t comfortable with.
LimeWire is also partnering with a company called Wyre to provide NFT custody services. That means consumers can buy and hold their NFTs right on the platform. They won’t need to worry about moving anything to a secure wallet.
I see this as an exciting development.
As we know, the NFT space is experiencing explosive growth right now. There’s a land grab of sorts happening as companies jockey for position in the industry.
I’ve shared some great opportunities in this trend here.
In this environment, having an established and recognizable brand like LimeWire is very important. I think there’s a good chance LimeWire could become one of the top NFT marketplaces out there.
Editor, The Bleeding Edge
P.S. Don’t forget to register for my “Perceptron” reveal tomorrow evening. The event goes live at 8 p.m. ET. Just go here for more information. Remember, I’ll be sharing a free actionable trade with everyone who shows up.
I’ll see you there.
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