Client Portals

Week 34: Numbers Don’t Lie, You Now Own An NFT, Robots4 min read

Aug 25, 2021 - Max Osbon ( 6 mins to read)

Briefing: Vaclav Smil’s latest book, “Number Don’t Lie,” is a treasure trove of interesting data and stories. | Visa’s $150,000 Crypto-Punk NFT purchase this week is a sign of forward-thinking leadership. It also wasn’t really that costly for the $500B market cap company. | General-purpose robots may be here sooner than you think; Hyundai and Tesla are the first leaders to step up.

Insights from Vaclav Smil

I recently finished Vaclav Smil’s latest book, “Numbers Don’t Lie.” Smil is one of Bill Gates’ favorite authors, especially when it comes to big macro societal topics like energy and vaccinations. Here are some takeaways:

  • Megacities: In 1900, only 5% of the world’s population lived in cities. By 1950 it was 30%. In 2007 it passed 50%. Cities create countless synergies, investment opportunities, superior education and rewarding careers. In 1950 there were only 2 megacities in the world: Tokyo and New York City. Today 60% of the megacities are in Asia. You can expect more megacities to pop up in the East and not the West.
  • India will soon supplant China as the most populous country. No later than 2025 and perhaps as early as 2023. Short-term demographics are easy to predict and difficult to change.
  • Vaccinations: It costs more to treat a sick person than to prevent a sickness via a vaccine. The initial cost of vaccinating every infant at birth against polio, diphtheria, tetanus, and so on is 40x less than the future cost of care if they were to get sick. Vaccinations are an excellent return on investment.
  • We’re stuck with diesel fuel for now. The largest international diesel-powered container ship can transport up to 23,756 containers over 21,000 km. The largest lithium-ion-powered container ship can transport 120 containers over 55 km. Diesel is nearly 200x more efficient from a weight perspective. Batteries have a serious energy density problem. Using lithium-ion batteries on our largest container ships would take up more than 40% of the cargo space. That would crush profit margins and then some. We need to see a 10x increase in the energy density of batteries before they become the standard.
  • Longevity: Japan has the highest life expectancy in the world. Japan also has the lowest obesity rate globally at 4%, while the US is 36% (!!!). Vaclav and others estimate that the low-calorie diet of <2,700 kCal/day is really all there is to Japan’s longevity secret. The US diet is between 3,600 and 4000 kCal/day.
  • Save the planet through reducing consumption: 30% of all food globally is wasted. We can benefit greatly by investing in food waste reduction. 50% of residential energy consumption goes towards heating. We can dramatically reduce energy consumption at scale by investing in better insulation like triple-pane windows for all housing in cold areas, for example.


Visa Purchased an NFT

Visa announced this week they purchased a crypto punk NFT for $150,000, and they wrote a blog post about it. Visa is a $500B market cap company with $20B in cash, so this transaction isn’t even a rounding error for them. It’s a great marketing campaign, though. What is most important here is Visa’s willingness to test and stay on top of emergent trends. Visa is a top 15 holding of the S&P, meaning a significant number of Americans now own a tiny fraction of this crypto punk NFT.

Blockchain technology is a rich territory to explore. It’s not all about the price of bitcoin or the stunningly high returns of most of the crypto assets to date. A willingness to explore and test in the crypto space is a healthy sign of leadership for Visa. It’s getting tough not to write about crypto each week, considering it iterates quickly (because it’s software) and has an ever-expanding number of passionate participants. If you want to read more about NFTs, we turned our weekly article into an NFT back in February.

Robots

Tesla had their AI Day last week and made headlines for introducing their conceptual Tesla Bot. Elon’s logic was that an autonomous car is essentially already a robot. Eventually, the wheels can be replaced with arms and legs. He also said he would like to see it weigh 125lbs. A Tesla battery weighs 1500lbs. For the Tesla Bot to operate on batteries, we will need to see that 10x increase in lithium-ion energy density mentioned above.

Boston Dynamics, which produces the Atlas robot that can do parkour and backflips, is owned by South Korean auto manufacturer Hyundai. Atlas weighs about 200 lbs and is battery-powered but almost certainly lasts less than 90 minutes. It takes a lot of capital, vision and talent to tackle the challenges needed to create these humanoid robots. When we solve the battery storage challenges, you can bet we will start using these general-purpose robots in many areas that require repetitive or unsafe work. Consider that it may be a reality sooner than you might think.

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