Silicon Valley Bank Crash, Become a Prompt Engineer, Web3 Gets a Vibe Shift, & More
FUTURE OF THE WORLD - Edition 26
Hi everyone,
As we were going to press (to use an old-world term), news dropped that Silicon Valley Bank, the 16th largest in the country, holding $210B in assets, had gone under.
We adjusted the edition to include some relevant information from leading sources and added a mindfulness exercise.
Hope you find it useful.
As always, leave a comment and let me know what you think.
Have a great weekend!
Misha
Here’s what you’re getting today:
Update on the Silicon Valley Bank shutdown
Web3 gets a vibe shift
How to become a prompt engineer
A court hearing in the metaverse
A mindfulness exercise
The Silicon Valley Bank Crisis:
Here’s a quick overview from Forbes:
On Friday, Silicon Valley Bank’s rich 40-year history came to an abrupt, ignominious end as regulators closed the bank and appointed the Federal Deposit Insurance Corporation as its receiver. And for the startups and investors that SVB has financed and served as a bank – spanning the entire venture capital-backed ecosystem – it’s raised new questions about when deposits and financing will be returned, if at all.
Silicon Valley Bank’s Abrupt Closure Leaves Venture Capitalists and Founders Scrambling | Forbes
From Ars Technica:
US bank failures have been extremely rare in recent years; the last FDIC-insured bank to close was in October 2020, and the last time there were more than 10 was in 2014.
The ramifications of SVB’s troubles may be widely felt. The lender is the banking partner for half of US venture-backed tech and life sciences companies and is a large presence in offering credit lines to the $10 trillion private capital industry.
Silicon Valley Bank shut down by US banking regulators | Ars Technica
But the most relevant take is from Fortune Crypto:
For months, banking agencies like the Treasury Department and FDIC have been vilifying the crypto industry as a threat to the U.S. financial system, even as a much bigger problem was growing under their noses. That problem comes in the form of banks’ large holdings of bonds and T-bills purchased during the environment of near-zero interest rates, and that they are now selling at a loss as customers pull their deposits.
If the mess at SVB and other banks spirals further, regulators’ recent fixation on vilifying crypto may come to be seen as a misguided priority. More broadly, these developments may also come to validate the Bitcoin crowd, which has long held that years of printing money amid near-zero interest was a recipe for trouble. I don’t have the macroeconomic expertise to say if that’s correct, but it will be something to consider if more banks start blowing up.
Silicon Valley Bank’s collapse reveals a broader crisis | Fortune Crypto
An in-depth look from Marc Rubinstein:
The trouble is that when rates started to go up, mortgage assets got hit hard. The duration of Silicon Valley’s HTM portfolio extended to 6.2 years, as at the end of 2022, and unrealised losses snowballed, from nothing in June 2021, to $16 billion by September 2022. That’s a 17% mark-to-market hit. The smaller AFS book was also impacted, but not as badly. Mark-to-market losses there amounted to 9% by the end of September.
So big was this drawdown that on a marked-to-market basis, Silicon Valley Bank was technically insolvent at the end of September. Its $15.9 billion of HTM mark-to-market losses completely subsumed the $11.8 billion of tangible common equity that supported the bank’s balance sheet.
The full post here:
My take here:
Web3: A Vibe Shift
The web3 ecosystem has been regaining its footing after a brutal 2022. A lot of work remains, but we are beginning to see glimmers of the phoenix rising.
Here are a few developments that you can get excited about.
1/ Coinbase launched an effort to turn the community into crypto advocates in DC:
2/ Polygon Labs put out 4 core policy principles:
Software development should be protected to ensure continued innovation.
Decentralization is different: regulatory objectives present in the traditional, centralized world can be achieved through laws that address the realities of decentralized protocols.
Regulate activities; be technology neutral.
Security and transparency are key to user protection.
3/ Sheila Warren of the Crypto Council for Innovation wrote this insightful thread demonstrating the huge mistake the government could make.
If we don’t get a good policy soon, we could lose the entire crypto industry. This happened with semiconductors manufacturing in the 90s.
A huge mistake the government is now working hard to rectify.
4/ A16ZCRYPTO kicked off Crypto Startup School, a twelve-week accelerator program designed around the specific needs of web3 startups.
We can look forward to a new round of startups built by talented founders in 2023.
The future of web3!
AI: Become a Prompt Engineer
The hot job of 2023 will be prompt engineering. As the AI explosion continues, the demand for prompt engineers will be huge.
Here’s what it is and how you can become one:
Prompt engineers are experts who write prose — rather than code — to test AI chatbots.
Their job is to identify the AI's errors and hidden capabilities so developers can address them.
Prompt engineers are experts in asking AI chatbots — which run on large language models — questions that can produce desired responses.
Unlike traditional computer engineers who code, prompt engineers write prose to test AI systems for quirks.
Sam Altman, the CEO of OpenAI, tweeted on February 20, "Writing a really great prompt for a chatbot persona is an amazingly high-leverage skill and an early example of programming in a little bit of natural language."
Here are 3 top guidebooks to becoming a prompt engineer:
Prompt Engineering: The Ultimate Guide 2023 [GPT-3 & ChatGPT]
The Art of ChatGPT Prompting: A Guide to Crafting Clear and Effective Prompts
Metaverse: Judge Holds Court Hearing in the Metaverse
A Colombian Court hosted its first legal trial in the Metaverse. Participants appeared as avatars in a virtual courtroom for a two-hour hearing.
This tech makes it easier and faster to access the justice system according to the magistrate in charge, Judge María Victoria Quiñones.
The metaverse is a fully immersive digital reality, generally accessed through XR (Extended Reality).
The judge said the metaverse meets the needs of a fair justice system.
It provides a neutral space for all parties and allows for a free exchange of information while removing the need for everyone to gather in the same physical space.
The judge also made use of the AI chatbot ChatGPT.
She asked it to explain terms such as ‘metaverse’ and ‘avatar’ to the participants and she consulted ChatGPT on the best way to verify their identities.
The metaverse is still in its infancy but it’s growing fast. 54% of experts believe it will have half a billion users by 2040.
Forget about 2040.
The metaverse is a neutral space for all parties and allows for a free exchange of information while removing the need for everyone to gather in the same physical space.
By 2027 court hearings in the metaverse will be normalized wherever there is internet access.
Mindfulness Exercise:
How to Tap into Your Awareness | Yongey Mingyur Rinpoche | TEDTalk
Stressed out by the insane pace of events, and the whiplash of change? This delightful, lighthearted talk will get you out of your mind and into the present.
Do it!
Yongey Mingyur Rinpoche shares three steps to help you accept the ebb and flow of your emotions and learn to meditate anytime, anywhere.
Become a Web3 Leader is back for Cohort 5:
Web3 is where the future is being built.
My top-ranked cohort-based course is the perfect place to make your move.
The course will teach you FIVE things:
How to think like a web3 native
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How to stay legally compliant in web3
How to use Twitter to become successful in web3
Even more importantly, we spend three days together, and you will join the inner circle of the community we are building.
The next group starts on March 29th, and applications close on March 12th.
Join us!
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If you share it on social media, tag me on Twitter so I can thank you.