Five Minute Blockchain - No. 52
The weekly newsletter from the crossroads of trust, content & blockchain. This week we have a full-blown trainwreck in the middle of that crossroads.
Estimated reading time: 9 minutes 44 seconds
The newsletter is an initiative of TruBlo, an EU research project. We support 45 early-stage projects to research and create new solutions
"A platform that can mimic humans’ writing with no commitment to the truth is a gift for those who benefit from disinformation. We need to regulate its use now."
Emily Bell: A fake news frenzy: Why ChatGPT could be disastrous for truth in journalism
In the US, three banks defaulted in the past week. First Silvergate, then Silicon Valley Bank, and then - only since Friday - another bank called Signature was closed in New York. The reasons are different, though three have in common that creditors lost trust. It is bad enough for the US government to step in.
After receiving a recommendation from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, Treasury Secretary Yellen, after consultation with the President, approved actions to enable the FDIC to complete its resolutions of Silicon Valley Bank and Signature Bank in a manner that fully protects all depositors, both insured and uninsured. (Board of Governors of the Federal Reserve System)
The downfall of Silicon Valley Bank will have repercussions for venture capital and start-up financing, potentially around the world. If the bank behind many deals in this space suddenly fails, there is a need to investigate the causes.
The unraveling at Silicon Valley Bank will have far-reaching implications for U.S. venture-backed startups, half of which did business at the bank, and the broader tech ecosystem. (Crunchbase)
The lightning collapse of Silicon Valley Bank Friday raised the specter of a broad tech-industry crash for the first time since the dotcom bubble burst in 2000. That threat, which loomed all weekend as legions of the startups that made up the bank's clientele worried about meeting next week's payrolls, receded after the federal government intervened Sunday to backstop depositors' assets even over the $250,000 FDIC threshold. After a year of layoffs and market retreats, the run on the industry's own community bank put tech's new status as a troubled business in sharp relief. (Axios)
In the UK, HSBC bought the British subsidiary of Silicon Valley Bank for one British pound (New York Times, €)
Crypto platforms are also involved because some might have exposure to these failing banks. Circle and Coinbase published statements to assure clients can redeem their holdings this Monday.
The shutdown of Signature and the collapse of Silvergate leave many companies in the crypto industry without much access to the US banking system. (Web3 is going just great)
Board of Governors of the Federal Reserve System
Joint Statement by the Department of Treasury, Federal Reserve and FDIC
After each financial crisis (2003, 2008), one would think that there is a lesson learned about making a lot of money, fast. But there are repeating patterns, and of course, there is pressure on the next generation to make enough money somehow, usually to buy a flat or a house.
So, in South Korea, there is an early cycle of investing, which - as of now - is not very critical but could be the nucleus of another crisis and loss of trust in five to ten years:
"Young South Koreans are unusually keen to put their meagre savings to work—perhaps because the country’s lacklustre jobs market makes it hard for them to buy property or support a family. A survey in 2021 found that eight in ten people in their 20s and 30s invest in stocks, cryptocurrencies or other assets. And they start young; 7% of shareholders in Samsung Electronics, a tech manufacturer, are in their teens."
The Economist (€)
Meta is working on a text-based social network. Based on current information, the platform will use ActivityPub, a decentralised social networking protocol which powers Mastodon and other decentralised apps. The codename, for now, is P92, and the platform will be Instagram-branded. The current plan is to publish a minimum viable product with no clear release date.
Generative AI is so quickly evolving right now that it is challenging to keep track. However, here is a quick update on some of the most relevant stories this past week:
ChatGPT and Whiper are accessible via an API (OpenAI) at meager prices. (Nathan Labenz)
Antrophic, an AI company founded by ex-Open AI employees and funded with $124 million, is offering its language model to other companies. (TechCrunch)
Elon Musk is considering setting up a rival to OpenAI, despite being one of the co-founders. (The Information)
Generative AI helps developers to boost productivity (WSJ) (€)
Video: How Nvidia powers the AI revolution (CNBC)
A developer documented how is can run the LLaMA AI model on his laptop. LLaMA was developed by Meta for $13B and is considered competitive to GPT-3 from OpenAI. While it needs quite expensive hardward to run GPT-3 that is not the case for the Meta competitor. (Simon Willison)
Using LLaMA with M1 Mac (l1x/dev)
Dalai is a "dead simple way to run LLaMA on your computer (Cocktailpeanut.Github.io)
Neal Mohan, the new CEO of YouTube, released a statement saying that YouTube will introduce new AI-driven features for creators (YouTube Blog)
Since introducing Chat GPT to assist with search queries four weeks ago, Bing has experienced user growth. According to Microsoft, the search engine crossed the number of 100M DAUs (Daily Active Users), though the blog post did not specify the number before introducing new AI features.
"Of the millions of active users of the new Bing preview, it’s great to see that roughly one third are new to Bing. We see this appeal of the new Bing as a validation of our view that search is due for a reinvention and of the unique value proposition of combining Search + Answers + Chat + Creation in one experience."
For comparison: Google is still the market leader, with a market share in many countries in the 95% and above range. But Bing had already gained some market share in the past and will grab more. We are witnessing a new phase of the competition, not only for search but for the quality of answers and information retrieval. New generative AI is just the opening for intense competition in the search business. There is one particular sentence in the blog post from Microsoft clearly showing how this has energised the company:
This (the number of DAUs, sic) is a surprisingly notable figure, and yet we are fully aware we remain a small, low, single digit share player. That said, it feels good to be at the dance!
Launching in the coming months, “GrammarlyGO” is a generative AI product that is designed to “accelerate productivity where people write.”
Like ChatGPT, GrammarlyGO is able to create text based on a short prompt, though Grammarly’s special trick is that the content generated copies your usual writing style – after all, Grammarly already analyzes everything you write for typos, so there’s plenty of data to work with. Use cases for this that Grammarly points out includes writing email replies based on one-click prompts such as “I’m not interested.”
A newly released TikTok Filter called "Bold Glamour" will change your appearance from ordinary to model features. The generated visual looks highly realistic and works dynamically in a short video, and the superficial perfection draws considerable criticism. It is one thing to be confronted with beautiful people on magazine covers, even when you know all images are heavily worked on in Photoshop. But it is another escalation when new filters can make you a "beauty" with one click. According to at least one study, comparing machine-generated images and actual appearance leads to a desire for plastic surgery.
Claire, whose name has been changed to protect her privacy, has never known a life that doesn’t include a camera being pointed in her direction. The first time she went viral, she was a toddler. When the family’s channel started to rake in the views, Claire says both her parents left their jobs because the revenue from the YouTube channel was enough to support the family and to land them a nicer house and new car. “That’s not fair that I have to support everyone,” she said. “I try not to be resentful but I kind of [am].” Once, she told her dad she didn’t want to do YouTube videos anymore and he told her they would have to move out of their house and her parents would have to go back to work, leaving no money for “nice things.”
When the family is together, the YouTube channel is what they talk about. Claire says her father has told her he may be her father, but he’s also her boss. “It’s a lot of pressure,” she said. When Claire turns 18 and can move out on her own, she’s considering going no-contact with her parents.
From "Rest of World":
Unilingo, the dubbing provider for MrBeast and PewDiePie, is part of a new localisation strategy for some of YouTube's biggest stars.
YouTube dubbing is helping creators reach new audiences worldwide and monetise the same video in several languages.
Mathieu Michel, Belgian Minister digital Minister, talked to Coindesk, offering a blockchain solution for infrastructure and public services:
"After regulating cryptocurrencies, European politicians are contemplating the next step in the race to attract Web 3 business – and it might be a tailor-made blockchain that respects privacy, Belgium’s digital minister told CoinDesk in an exclusive interview. A new “Europeum” blockchain could be the vehicle to record property ownership, driving licenses or professional qualifications while sticking to the European Union’s high regulatory norms, Mathieu Michel said."
The financial services firm Circle confirmed Friday that $3.3 billion of its reserves were tied up at Silicon Valley Bank, resulting in the USDC stablecoin going below one US dollar.
"Stablecoins derive their value from those reserves; if one is worth more than $43 billion – as USDC was earlier on Friday – there should be roughly that much cash or cash-like fixed-income instruments stashed somewhere backing that up. USDC's market capitalization has now slumped below $40 billion."
Crypto was born in the aftermath of – and, to some, in response to – the 2008 crisis. Satoshi Nakamoto's Bitcoin paper debuted into a world where governments had just propped up the financial system by pouring money into it. Crypto lacks such a centralized authority. If SVB customers, including Circle and its USDC stablecoin, are forced to take a haircut on their money, the repercussions are unclear.
Crypto.com announced it could only provide euro-denominated banking last week. The exchange lost its ability to accept US-Dollar deposits due to problems with banking partners. Gemini denied that the relationship with JPMorgan had ended in a tweet.
PeopleDAO loses $120,000 after the payment spreadsheet is shared publicly (Web 2 is going just great)
Meta to end Canadians' access to news on Facebook and Instagram if Bill C-18 becomes law (The Globe and Mail)
WhatsApp has started a fight with the UK about encryption (Wired UK)
A conservative Catholic group in Colorado bought a mobile app tracking data worth millions of dollars to identify gay priests across the US. (PC Mag)
More than €1.4 billion was invested in European Tech this week (Tech. eu)
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