On Bitcoin, Amazon, ICOs and More by FPM Team

  • Last week, Terry Duffy, CME Group Chairman and CEO said, “Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract … As the world's largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities."  CME also reported that "Cryptocurrency market capitalization has grown in recent years to $172 billion, with bitcoin representing more than 54 percent of that total, or $94 billion.  The bitcoin spot market has also grown to trade roughly $1.5 billion in notional value each day."
  • Also, various news sources reported that Amazon.com (through one of its subsidiaries) registered the internet domain names amazonethereum.com, amazoncryptocurrency.com, and amazoncryptocurrencies.com. 
  • Note: Amazon registered the domain name amazonbitcoin.com three years ago.
  • The article “Greater fool theory: The bitcoin bubble" (The Economist – Nov. 1) said, “There may be good reasons for buying bitcoin. But the dominant reason at the moment is that it is rising in price … 
  • "All this indicates that Bitcoin has reached a new phase. The stockmarket has been trading at high valuations, based on the long-term average of profits, for some time. But there is nothing like the same excitement about shares as there was in the dotcom bubble of 1999-2000. That excitement has shifted to the world of cryptocurrencies like Bitcoin and Ethereum. A recent column focused on the rise of initial coin offerings, a way for companies to raise cash without the need for a formal stockmarket listing—investors get tokens (electronic coins) in businesses that have not issued a full prospectus. These tokens do not normally give equity rights. Remarkably, as many as 600 ICOs are planned or have been launched."
  • Recently, Ethereum creator Vitalik Buterin discussed ICO’s and said, ”This, basically, is tokens 1.0. There are some good ideas, there are a lot of very bad ideas, and there’s a lot of very, very bad ideas, and quite a few scams as well. I expect that tokens 2.0 and the kinds of things that people will start building in 2018 and 2019 will generally be of substantially higher quality. Especially once we start seeing what the consequences of the first wave of tokens are in the medium-to-longer term … What is a good role for them and what is a role that doesn’t really make sense?"

OUR TAKE

  • Regarding the CME - While its action may increase the legitimacy of cryptocurrency, the introduction of bitcoin futures contracts will also attract a new class of speculators.
  • Regarding Amazon - It remains unclear what Amazon's intentions are for the domain names, but the firm has the  e-commerce presence and technical expertise to successfully introduce its own cryptocurrency.
  • Regarding the bitcoin bubble - Demand and innovation for cyrptocurrencies, smart contracts and other digital assets will continue to grow in the long term. However, the brisk short term upward price move in many cyrptocurrencies will likely falter in the short-term.
  • Regarding Vatalik on ICOs - As he points out that innovation is needed, current investors should understand that most (perhaps 90% or more) of ICO-driven projects will fail.

Notes from  “3rd Annual Innovations in Psychiatry and Behavioral Health: Virtual Reality and Behavior Change.” by FPM Team

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On Oct 6-7, we attended  “3rd Annual Innovations in Psychiatry and Behavioral Health: Virtual Reality and Behavior Change.” which was hosted at Stanford University School of Medicine.  The following are selected observations from the event.

"Keynote: Overview of Medical VR" by Walter Greenleaf, PhD research neuroscientist and medical product developer at Stanford University

  • Over 30 years of academic research and over 3000 studies demonstrate that VR can improve behaviors, attitudes, and health
  • Virtual environments are used clinically to treat several important mental and behavioral health problems in areas such as 1) drug and alcohol abuse, 2) schizophrenia, 3) post-traumatic stress disorder (PTSD), 4) generalized anxiety disorder, 5) depression, 6) ADHD, 7) anger management, 8) eating disorders/weigh management, 9) learning disabilities, 10) stress management and 11) grief counseling
  • Until now, VR technology was expensive, bulky and difficult to use.  Today, we have the advancements to bring VR to scale in heathcare.
  • After years of validations and use by early adopters - VR technology is poised to move to the mainstream.

"VR and Pain Management/Addiction" by David A. Thomas, PhD National Institute on Drug Abuse (NIDA) / National Institute of Health (NIH)

  • There is a huge need for new pain treatments
  • Deaths each year from a prescription opioid overdose exceeds deaths from cocaine and heroin overdoses combined. 
  • The last decade of research has established that VR, in a variety of situations, offers a safe and effective treatment of pain, without the possibility of drug addiction or many side effects common to opioids.
  • VR is proving itself as one viable option for reducing pain in suffering, and thus its development must be a priority.

VR and Anxiety with Painful Procedures in Children” by Anne Dubin, MD Professor of Pediatrics at Stanford, and Director of the Pediatric Arrhythmia Service at Lucile Packard Children’s Hospital at Stanford

  • There are over 450 research articles on the use of VR in pediatric care in areas such as 1) movement disorders including cerebral palsy, 2) weight loss, 3) autism and social interaction and 4) pain.
  • Special considerations for medical VR with children include: 1) children may be more vulnerable to VR experiences and may need some debriefing after use and 2) treating chronic illness can result in reduced social interaction - VR affords a unique opportunity for children to interact with others
  • There are no studies which have shown health issues with the use of VR in children.

Translating Technology into Clinical Care: Barriers to Widespread Adoption of VR in Mental Health Practice” by Matt Vogl, MPH Executive Director National Mental Health Innovation Center – University of Colorado.  

  • Landscape is primed for widespread VR adoption because 1) there are 30 years of research, 2) VR can treat many conditions, 3) equipment is improving and costs are dropping, and 4) there is significant investment in new applications.
  • Issues to address include 1) gaps in clinical research, 2) maturity of software, 3) fears of technology obsolescence, 4) lack of IT support, 5) confusion about the diversity of technology platforms and 6) uncertainty regarding FDA regulation and how will services be paid for.
  • Going forward, there is a need for: 1) stronger industry/academic partnerships, 2) larger clinical trials and 3) engaging more people in VR experiences.

OUR TAKE

  • There were many excellent presentation at the two day conferences (the comments above address several important themes). Alan Louie, MD, Kim Bullock, MD and others organizer provided a very informative event.
  • Medicine is one of many industries that will be reshaped by virtual/augmented/mixed reality technologies.
  • While VR equipment has improved and prices have dropped, the diversity of development platforms and the requirements to learn new development skills presents a short-term challenge for the industry.

Saving the Planet with Plants (investors include Branson, Gates, Nestlé and more) by FPM Team

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  • Last week, Beyond Meat, a producer of plant-based meat alternatives said its Beyond Burger was available in over 3,000 grocery stores in the U.S. and on Sept. 13, CEO Ethan Brown announced the company was working with Sysco “to bring The Beyond Burger to menus alongside beef at thousands of mainstream restaurants nationwide.”
  • Notes: 1) Investors include Bill Gates, Twitter co-founders Biz Stone and Evan Williams, Kleiner Perkins, former McDonald's CEO Don ThompsonHonest Tea founder Seth GoldmanHumane Society of the United States, and Tyson Foods 2) its products are distributed to Whole Foods MarketSafeway, burger chain BurgerFi, movie theater chain Alamo Drafthouse, on-campus at Yale University, Hong Kong’s vegan grocery chain Green Common and more. 
  • On Sep 7, 2017, Nestlé USA Chairman and CEO Paul Grimwood, said “In the United States, we’re experiencing a consumer shift toward plant-based proteins. In fact, as many as 50% of consumers now are seeking more plant-based foods in their diet and 40% are open to reducing their traditional meat consumption, One of Nestlé’s strategic priorities is to build out our portfolio of vegetarian and flexitarian choices in line with modern health trends. With unique and nutritious food for all times of the day, Sweet Earth gives Nestlé a leading position in this emerging space.” 
  • Note: The acquisition of Sweet Earth provides Nestlé access to a 48 plant-based product lines and a 40,000-square-foot facility in Moss Landing, CA. 
  • On August 24, 2017, Virgin Group Founder Richard Branson said in a blog post “There are many issues that impact upon climate change, but few as negatively as livestock. It’s estimated that livestock produces 18 per cent of all "man-made" greenhouse gas emissions – making it a bigger contributor to global warming and environmental degradation than all forms of transportation. Realizing the folly of the world’s conventional meat consumption, I was compelled to give up beef a few years ago. The main reason for my decision was rainforest degradation, and my eyes were also open to farming and slaughterhouse practises. I quickly found that I didn’t miss beef at all – there are so many alternatives that it didn’t really affect my meal habits ...  
  • "I’m thrilled to announce that I have invested in Memphis Meats. A clear leader in the clean meat space, Memphis Meats are developing a way to produce real meat from animal cells, without the need to feed, breed and slaughter actual animals"
  • Note: Other investors include DFJCargill and Bill Gates.
  • On May 25, 2017, Impossible Foods’ “2017 Sustainability Report” said, “Americans consume about 10 billion pounds of ground beef per year. The average American eats three hamburgers every week— nearly 50 billion burgers per year and about half of this is consumed in restaurants. In order to supply this much meat, around three quarters of all agricultural land in the U.S. is devoted to cattle and the crops they eat. Impossible Burger uses vastly less land, water, and energy than a burger made from cows.”
  • Notes: 1) The company recently opened a production facility in East Oakland, CA with the capacity to produce 1 million pounds of plant-based meat per month and 2) it investors include Google Ventures, Khosla VenturesViking Global InvestorsUBSHong Kong billionaire Li Ka-shing's Horizons Ventures and Bill Gates.

 

OUR TAKE: 

  • The potential for meat alternatives to address environmental issues while providing healthy alternativesseems like great news and could lead to a significant socio-economic mega-trends.
  • To expand the market opportunity, the pricing of alternatives will have to become more cost competitive with the traditional meat market - a dynamic which will likely be addressed as the industry scales up.
  • As the alternative food market grows, market participants will likely encounter intellectual property challenges and increased regulatory scrutiny.

Artificial Intelligence: Lethal, Biased, or Tool for Good? by FPM Team

  • Last week, Tesla’s Elon MuskAlphabet/Google’s Mustafa Suleyman and 114 other artificial intelligence experts at the International Joint Conference on Artificial Intelligence in Melbourne, Australia, signed a letter that said, "As companies building the technologies in Artificial Intelligence and Robotics that may be repurposed to develop autonomous weapons, we feel especially responsible in raising this alarm …
  • "Lethal autonomous weapons threaten to become the third revolution in warfare. Once developed, they will permit armed conflict to be fought at a scale greater than ever, and at timescales faster than humans can comprehend. These can be weapons of terror, weapons that despots and terrorists use against innocent populations, and weapons hacked to behave in undesirable ways … 
  • "We do not have long to act. Once this Pandora’s box is opened, it will be hard to close." 
  • Separately, a report by researchers at the University of Virginia and University of Washington said “As intelligence systems start playing important roles in our daily life, ethics in artificial intelligence research has attracted significant interest. It is known that big-data technologies sometimes inadvertently worsen discrimination due to implicit biases in data
  • "Such issues have been demonstrated in various learning systems, including online advertisement systemsword embedding modelsonline newsweb search, and credit score ... we show that given a gender biased [body of work], structured models such as conditional random fields, amplify the bias.
  • In a May 2017 TED talk, former World Chess Champion Garry Kasparov said, “Human plus machine isn't the future, it's the present."
  • "We don't get to choose when and where technological progress stops. We cannot slow down. In fact, we have to speed up. Our technology excels at removing difficulties and uncertainties from our lives, and so we must seek out ever more difficult, ever more uncertain challenges. Machines have calculations. We have understanding. Machines have instructions. We have purpose. Machines have objectivity. We have passion. We should not worry about what our machines can do today. Instead, we should worry about what they still cannot do today, because we will need the help of the new, intelligent machines to turn our grandest dreams into reality."

OUR TAKE

  • Regarding lethal AI - As  AI thought leaders seek to influence policymakers, it is likely than a substantive "call to action" will take place after Pandora's box is opened.
  • Regarding biased AI - As biases in systems design are increasingly identified, AI development efforts will have to avoid design flaws that could bias diverse groups and individuals.
  • Regarding Kasparov's comments - He makes many good points related to AI trends and potential benefits as the AI market evolves.

eSports at the Olympics and more by FPM Team

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  • Last week, Tony Estanguet, co-president of the Paris 2024 Olympic bid committee said “We have to look at [eSports] because we can’t say, ‘It’s not us. It’s not about Olympics … The youth, yes they are interested in eSport and this kind of thing. Let’s look at it. Let’s meet them. Let’s try if we can find some bridges … There is some time to look at it, to interact, to engage … We will spend some time after (the IOC meeting in September) Lima to engage with new people and stakeholders. The IOC will have the last … say, if they want eSports on the program. Let’s discuss among ourselves.”
  • Separately, Telemundo broadcast all 16 hours of the FIFA Interactive World Cup (an annual video gaming competition organized by FIFA and EA Sports) and Peter Blacker, Executive Vice President of digital media and emerging business for NBCUniversal Telemundo Enterprises said “Esports gives us an opportunity to connect with the Hispanic, multicultural gaming audience … Esports consumers tend to be more millennial, and Hispanics are the most engaged in that group … Our heritage as part of NBCU means we’re the Hispanic home of the Olympics, which have been a great place for us to shine a light on athletes and their journeys, we’re going to do that in the eSports area as well.”
  • Also, market research firm Nielson announced a new eSports business unit and said, “eSports has experienced massive global growth over the past few years with major investment from blue chip sponsors, game publishers and media companies, as well as sports leagues and teams. The eSports fan base is also rapidly expanding with nearly one in three fans beginning to follow eSports just within the past year.”  (Note: Advisory board members include ESLESPNFacebookFIFA, Major League Gaming/Activision BlizzardNBA 2K LeagueThe Next LevelSony PlayStationTurnerTwitchTwitterUnilever and Google YouTube.)

OUR TAKE

  • Given that Olympic viewership has been declining, introducing activities such as eSports may help reverse this trend.
  • While eSports is still at a relatively early stage of development, this market will continue to expand and attract many new participants.
  • Advances in geo-spatial technologies (such augmented/virtual reality, sensors, motion capture, robotics/drones, etc.) will result in the introduction of new types of sports competition and reshape both traditional and eSports activities as well.