Why Solving Climate Change Should Create The First Trillionaire

Disruptive innovation transforms an inequality economy into a fairly global network

‘It’s the dumbest experiment in human history’ — Elon Musk about fossil fuel industry (Business Insider)

Some of the guys who have more than $1,000,000,000 have understood that money is not an end. It’s a means to an end. (I know. Too many zeros. We’re not used to it.)

Chamath Palihapitiya, Social Capital’s CEO, reached at an early age a respectful fortune. As he turned his wealth into one billion dollars, it was like having a billion solutions to share with the world. Nothing more, nothing less.

The mindset of this new generation of billionaires makes us hope for the future of money. And when I mention the future of money, I refer inadvertently to the future of humankind.

Solving global warming, chronic diseases, and social inequality, is a Herculean effort.

Yet, Elon Musk is well ahead of everyone. He’s about to disrupt the entire auto and energy industries. His primary focus is solving one of the biggest problems of humanity.

Climate change.

Every Saint Has a Past, and Every Sinner Has a Future

You can always see a billionaire as the root of all evil.

As much as we want to think otherwise, they have more power than ordinary people, for good and bad.

Yet, as a learn-a-holic, I’m always digesting information. I love to investigate what Tesla, Amazon, Apple, and Google, are working on. I ask myself all the time:

What’s going to be the next big thing?

Deep Mind, a company that joined forces with Google, has a project called AlphaFold. They are using AI for scientific discovery.

Our system, AlphaFold — described in peer-reviewed papers now published in Nature and PROTEINS — is the culmination of several years of work and builds on decades of prior research using large genomic datasets to predict protein structure. The 3D models of proteins that AlphaFold generates are far more accurate than any that have come before — marking significant progress on one of the core challenges in biology.- deepming.com

This research is available on Github for anyone interested in learning more or replicating their results. They’re excited by the fact that this work has already inspired others.

Now you ask: why the hell is Google investing in biotech?

Here’s what they say,

Figuring out what shapes proteins fold into is known as the “protein folding problem,” and has stood as a grand challenge in biology for the past 50 years. This breakthrough demonstrates the impact AI can have on scientific discovery and its potential to dramatically accelerate progress in some of the most fundamental fields that explain and shape our world.

Deep Mind is owned by Google, which represents Alphabet, the big company. In one of last year’s quarter, Alphabet had revenue of $46.17 billion.

What should they do with all this money, rather than fix the world’s significant challenges? What should some big tech company do with such an amount of money? Acquire everybody else? What would be the point?

I’ve read Warren Buffett’s biography. Almost 1,000 pages about an extraordinary investor. He provided generations of investors with timeless value investing.

I know it’s unfair to compare Buffett with Elon Musk. But let us do this exercise.

Warren Buffett builds from scratch a company- Berkshire Hathaway. It’s the 8th most valuable company of the S&P500 with a market cap of 451.2 billion dollars.

Berkshire Hathaway is a holding company for the various investments Warren Buffett has made over the years. Among its many holdings are insurance businesses such as GEICO, large energy, and utility businesses. Also a major railroad, consumer brands such as ice cream store Dairy Queen.

One of the last investments Buffett did was buying Apple shares.

Let’s see about Elon Musk. Elon is an industrial designer and engineer. He is the founder of SpaceX, CEO and product architect of Tesla, founder of The Boring Company, co-founder of Neuralink, and co-founder of OpenAI.

In 2006, he helped create SolarCity, a solar energy services company (now a subsidiary of Tesla).

Tesla has a market cap of 834.172 billion dollars. It surpassed Facebook as the fifth most valuable U.S. company. It now just trails Apple, Microsoft, Amazon, and Alphabet.

President-elect Joe Biden is aiming to create 1 million new jobs in the domestic auto industry. Expanding electric vehicle charging infrastructure across the U.S. And ramping up solar energy and other renewables here as part of his clean energy plan.

Elon is dematerializing two industries at once. The auto and energy industries are changing over the coming decades. You had Facebook dematerializing the entire social network. Google dematerializing all video and library networks. Amazon dematerializing all front stores.

All these industries flowed into the digital world. And those who were the innovators, are now the most powerful CEOs on the planet.

So, what does Warren Buffett and Elon Musk have in common?

Not much.

And that’s where the significant change is.

These new generations of billionaires have a different motto.

50 years ago, we were in a completely different era. Growth was the motto. Every company, every fund, every government, they were all focused on growth. And Buffett mastered like nobody else.

But why do you want growth if the principles of humankind are falling apart?

Central banks, major commercial banks, and politics are all in an unprecedented web of corruption. Global warming is decimating entire ancestral forests all over the world. The air quality in the world’s largest cities is creating generations of sick children.

In this landscape of doomsday, these billionaires have to look out for our survival as human beings. Their kids’ future is in jeopardy.

So, what’s the point of growth if it’s not to fix our planet and our daily problems?

These are serious matters. It’s not okay to think fossil fuels are good for humans. They are not. The oil industry is destroying our planet. Look above all the noise, and you’ll find documentaries reporting what’s going on.

So, yes, Elon is trying to change the world for the better. With electric cars, solar panels, and superchargers. He will change a lot of things for the better. Planet earth will appreciate it.

And most valuable than that is the legacy Musk is building. New kids want to be like him. They will want to fix the planet too. And that’s a good thing.

In Bitcoin We Trust

Another radical transformation is going to happen in the monetary system. A lot of things have been said about cryptocurrencies and Bitcoin. But it seems hedge funds and major companies are realizing that BTC can be a refugee to fight inflation.

In a very enticing way, Michael Saylor, the CEO of Micro-strategy, fired up a dozen interviews. He explains why his company invested 1.3 billion dollars in Bitcoin.

Saylor responded to a tweeter where Elon Musk asked him if it’s safe to buy BTC. Michael Saylor said he would have the pleasure to explain Elon in private. From rocket science to rocket science.

Paypal and Square are heavily investing in Bitcoin. And make it available on their platforms.

Comparing Buffett with Musk is unfair. What about comparing JackDorsey’s Square with Jack Mallers’s Strike?

A new generation of young entrepreneurs is playing the game in another dimension.

Described by Jack Mallers as a “Bitcoin neo-bank,” Strike leverages the Bitcoin network. It’s scaling the Lightning Network technology. Strike plans on providing banking services in up to 200 countries.

Strike enters the global remittances business with the hope of not only disrupting the incumbents but bringing free and instant international transfers with physicality.- Joe Rodgers in Nasdaq.com

Bitcoin is a new technology, and some 26-year old kid is already disrupting it to another level. Jack Mallers is a knowledgeable young adult. His explanations about fiat currency and all the central bank intermediation web made him a person to follow.

Preston Pysh and Jack Mallers had a fascinating podcast interview where Jack really nails it.

Jack Mallers explains money history in an obvious way,

For almost 50 years, most international transfers have been processed by the Society for Worldwide Interbank Financial Telecommunication, also known as SWIFT. SWIFT simply provides a network that enables parties worldwide to send and receive information about financial transactions. In 2019, more than 11,000 financial institutions sent over 30,000,000 payments per day via the SWIFT network. Today, over 50% of existing international transfers are done via the SWIFT network. However, 50+ years after its inception, SWIFT remains one of the more expensive ways to transfer funds internationally, and settlement times still range from days to weeks.

If you read Mallers’ last article, you’ll understand how money works. But also, what are the present money constraints.

Elon Musk is trying to fix the world’s dependence on fossil fuels. Jack Mallers is striving to provide free and instant international transfers in up to 200 countries.

The same motivation. The same mindset to change the world for the better. The same motto.

The Free Economy Is Not The Enemy But The Friend Of Social Capital

Eight and a half years ago, we started Social Capital to tackle challenging problems like cancer, space exploration, and climate change at a time when few investors were doing so. While many investors fawned over social networks, photo-sharing apps, and other consumer-oriented investments, we invested in healthcare, education, and frontier technology businesses like space exploration and artificial intelligence.- socialcapital.com

If you click on the Social Capital website and run it to the About Page, you’ll read,

Once we have conviction about a solution, we will then execute — by building, buying, or investing in whatever it takes to solve the problem we identified.

As I’ve mentioned earlier, Chamath Paliyapitia is the Social Capital’s CEO. Another disruptive mind. He has been quite often on CNBC, having several opportunities to share his vision about this new era.

“Something like bitcoin is really important because it is not correlated to the rest of the market.”

“Betting against entrepreneurs who are changing the world has never been a profitable endeavor.”

“None of us are going to fix governance; it may just be beyond repair. But you can fix capitalism. And the reason you can fix capitalism — It is inherently numerical, and as a result, it is inherently objective. It can be done objectively.”

“Today, we live in a world where it is easy to confuse truth and popularity. And you can use the money to amplify whatever you believe and get people to believe what is popular is now truthful. And what is not popular may not be truthful.”

“I want children who can make eye contact. I want children who know how to resolve conflicts with their peers. I want children who understand the dynamics of interpersonal relationships that are physical and tactile. I do not want children that only know how to interface with the world through a screen.”

Chamath ignited Silicon Valley’s obsession with an unusual financial mechanism to take companies public. Venture capitalist Bill Gurley recently said: “Chamath — he’s figured out the process for crushing it as a SPAC sponsor, and I think a lot of the others are just sitting still and don’t know what he knows.”

SPAC is the acronym for a special-purpose acquisition company. Anxious venture capitalists are willing to offload their portfolios onto the public market. And devoted companies see it as a path to becoming publicly traded stock.

A traditional IPO takes 10, 11, 12 years before going public, and they consume enormous amounts of capital. Chamath went to banks and says. “But if you are a high-growth company focused on future profits rather than current profits — this is a big limitation of a traditional IPO process because you can’t talk about the future.”

The core reason is simple: regulatory arbitrage. In a traditional IPO, you can’t offer detailed projections about your expected future financial performance. You’d take a legal risk if you went on CNBC and made all sorts of predictions about the company’s future financial performance.

SPACs have more freedom to pitch their growth stories. If you’re a company that’s losing money, a SPAC gives you the chance to project a more profitable future.

For the overall system, it’s a way to boost new companies into future profits. Yet, every cash-hungry company is doing it. And as 1999 taught us, we should be cautious about expecting future earnings in every tech company we find.

Chamath Palihapitiya doesn’t care about what chronic pessimists think.

Like Elon Musk or the young Jack Mallers, Chamath wants a better world. They don’t give a damn about money. They don’t need the money. They accept it because it’s the only instrument they have to create a better world. Less polluted, more egalitarian, less racist, and less xenophobic planet.

They’re fighting for freedom through money.

Money should be a means to an end.

Final Thoughts

I hope the next trillionaire will be someone who can fix our planet. As Chamath Paliyapitia said, we should expect money flowing to climate change entrepreneurs’ hands.

We should embrace a technological and deflationary economy. Money printing is not the solution.

Money should be a means to an end. Money should be solving our problems. And it isn’t.

I’m going to finish with a scenario Jeff Booth imagined in his fabulous book “The Price of Tomorrow”:

What if the natural order of things was permitted?

What if, instead of trying to stop deflation at all costs, we embrace it?

As technology spreads, deflation happens at the rate it should. Deflation becomes something celebrated because it means that we are getting more for less. We allow ourselves to accept abundance. Along that continuum, as technology removes jobs and fewer overall jobs are needed, prices will keep falling, allowing those who lose jobs a way to share in the benefit of technology abundance without massive transfers of wealth. If technology-driven price declines continue to the point of something becomes free, we let that happen, too. People will no longer have to be on an endless treadmill to pay for things that are constantly rising in price. As hard as that might be for us to accept, because it is such a radical change to the way things are today, it seems to me that it is the only real choice we have.

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