AI is going to change our physical world
The Waymo Driver is in control at all times
Bond — which is a San Francisco-based VC firm with a cool website — just published this 340-page report on Artificial Intelligence. One of the authors of the report is Mary Meeker. She has been called the "Queen of the Internet" thanks to a 20-year run of presentations about the state of the internet, and her perceived ability to identity new trends early. So people are paying attention to this report. Her last one was in 2019 and I mentioned her 2018 report on this blog, here.
At this point, it's boring to say that AI is ushering in "unprecedented" global change. Everyone sends around snippets from ChatGPT. I incorporate some sort of AI-powered tool all the time in my daily workflow. And we've started using it on our development projects to help with tedious things like design coordination. Eventually we'll probably stop calling it out as "AI" and just refer to it as the things that computers and the internet can do.
But I think it's valuable to point out that this has been a really long time coming. The report talks about an "AI winter" from 1967 to 1996. That's a long time to stay motivated and interested in something that doesn't seem to be gaining traction. And it's a reminder that crypto is still early. Even though I also use blockchains every day and I've already transitioned (or am transitioning) a lot of my online life, including this blog.
Of particular relevance to this community is probably the fact that AI is also going to have a meaningful impact on our built environment. One of the sections in the report is called "Physical World AI," and it talks about how quickly data centers are now being built (compared to housing) and how Waymo (using AI) has taken something like 27% of the ride share market in San Francisco in the span of just 20 months.
This transportation product is now scaling, and cities have always responded and remade themselves according to new mobility innovations. This time won't be any different.
Cover photo by Annie Spratt on Unsplash
I like thinking about new things, and so I like this recent post by Vitalik (the Ethereum crypto guy) talking about what he calls "the tree ring model of culture and politics." The basic insight of the model is the following:
How a culture treats new things is a product of the attitudes and incentives prevalent in that culture at that particular time.
How a culture treats old things is primarily driven by status quo bias.
To explain why the world seems to work like this, he uses the analogy of tree rings, which are also called annual rings or growth rings. Trees grow in diameter each year and the result is a set of successive rings.
Importantly, each tree ring is a result of the conditions that the tree experienced during its growing season. A wide ring typically suggests a favorable growing season and a narrow ring suggests a stressful growing season.
Once the growing season is over, the ring becomes set, which is why dendrochronology is a thing, and why tree rings can be used to tell us about what happened in the past.
The parallel with culture and politics is that it's far easier to shape new things during their initial growth cycle, then to try and do it later. Because once the growth cycle is over and it becomes an old thing, attitudes are then guided by the status quo. They become set.
To quote Vitalik: "What is easier is to invent new patterns of behavior that outcompete the old, and work to maximize the chance that we get good norms around those." This makes a lot of sense to me and it's a reminder to stay open to new things.
Cover photo by Aleksandar Radovanovic on Unsplash
Back when Canadians used to travel to the US, it was common for a situation like this to arise: "Hey, I'll send you money. Do you have Venmo?" And then, as a Canadian, you'd say, "sorry, we don't have Venmo in Canada. We use our own proprietary system called Interac e-Transfer. Do you have PayPal? I think I still have an account. Let's try." Once this exchange was over, both parties would then sit there and wonder why the hell it's still so expensive and awkward to move money around.
As another example, take global remittances. These are payments sent by a person back to their country of origin, usually to a family member. And in 2024, it was estimated that some $905 billion was sent around the world for this reason, with about $685 billion of it being sent to low and middle-income countries. But it was also estimated that the average cost of doing this was around 6.62%, which is double the UN's target of 3%.
For anyone who has used crypto before, this feels painfully archaic. Sending a wire transfer can cost over $50 and it can take time to clear, assuming that you got in before the bank's cut-off time. Sending things via a blockchain is cheap (it's pennies now) and it happens instantly and securely — 24 hours a day, 365 days a year. This was always one of the promises of crypto, but now we're seeing it play out very clearly with stablecoins. Here's an example.
3,785
Stablecoins are a type of cryptocurrency that have their value pegged to another asset, such as gold or a fiat currency. And at the time of writing this post, something like 99% of stablecoins are pegged to the US dollar. The benefits of this are twofold. Firstly, it creates price stability. You're effectively holding US dollars. But now you have a US dollar on a blockchain (or a tokenized US dollar), meaning you can do crypto things with it, like send it around the world instantly and for free.
The other benefit of this is that it can serve as a hedge against a problematic local currency. Would you rather hold the Argentine Peso or the US dollar? The use cases are powerful. So it's not surprising that, by some estimates, a quarter of all global remittances now involve some form of cryptocurrency. Argentina also happens to be the leading crypto market in Latin America. Between July 2023 and June 2024, the country recorded about $91 billion in crypto transactions.
It's fascinating to think about how all of this will reshape the global financial landscape. Already stablecoin transactions are threatening Visa in terms of overall transactions. All someone needs is a mobile phone and a crypto wallet. And by the way, as soon as you link a wallet to a human, you can also quickly determine how much money they've been sending/receiving, figure out tax liabilities, and so on.
Also noteworthy is the fact that the (vast?) majority of stablecoin transactions settle on Ethereum. It is the substrate powering this market, as well as many others. I don't know what that exactly means for Ethereum as a crypto asset. But I do believe it means something meaningful. And in this instance, it stems from a fairly simple want: "I would like to send you money cheaply and securely, and I don't want inflation to then kill my purchasing power."
Cover photo by Alistair MacRobert on Unsplash