ARK • Disrupt

Last Tuesday, the Supreme Court of the United States declinedⁱ to weigh in on an ongoing battle between Apple and Epic Games. In effect, it upheld the ruling of the Ninth Circuit Court of Appeals that rejected Epic Games’ antitrust claims against Apple in 2023, and also agreed that Apple violated California’s unfair competition law by preventing developers from alerting users that they can bypass Apple’s in-app payment system and purchase digital goods and services on websites.

In response, Apple introduced a 27% commission on web-based purchases if users tap on an in-app link to bypass Apple’s standard 30% commission within seven days—a change nearly identical to Apple’s response to a Dutch regulator ruling associated with dating appsⁱⁱ in 2022—adding a pop-up “scare screen” to disadvantage competing payment processors, as shown below.

Source: Sweeney 2024.ⁱⁱⁱ For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security.

Epic Games CEO Tim Sweeney and the broader iOS developer community have expressed dissatisfaction^iv with Apple’s moves. Seemingly alienating its developer community, is Apple setting up to lose in the mobile computing space as new consumer AI wearables hit^v the market, threatening it with creative and provocative AI-related platform shifts?

Last week, JP Morgan CEO Jamie Dimon reiterated^vi his skepticism about bitcoin, likening it to a "pet rock" without value and noted further that “there’s a good chance that … when we get to that 21 million bitcoins, [Satoshi Nakamato] is going to come on there, laugh hysterically, go quiet, and all bitcoin is going to be erased.”

In our view, bitcoin is poised for broad institutional acceptance, and for good reason. Indeed, Dimon overlooks fundamental components of Bitcoin’s design by suggesting that bitcoin’s supply could disappear when it reaches 21 million, its maximum mathematically metered supply. Integral to Bitcoin’s design^vii are its decentralized consensus mechanism, difficulty adjustment algorithm, and hard-coded supply limit. As outlined below, these three components ensure decentralized control, network integrity, and yes—scarcity.

• Decentralized Consensus Mechanism: Bitcoin operates on a decentralized network in which changes require consensus among multiple network participants, including nodes, miners, and developers. They reach consensus only when the majority of the network's computational power base agrees on the blockchain's state. Jamie Dimon does not seem to understand the complexity of achieving consensus in a decentralized system over which no single entity has control.
• Difficulty Adjustment Algorithm: Bitcoin's protocol includes an automatic difficulty adjustment mechanism that ensures the steady creation of new bitcoin. The adjustment happens every two weeks on average and guarantees that the rate of block discovery is consistent with the network's total hashing^viii power. Dimon's stance seems not to consider that this self-regulating feature is crucial to Bitcoin’s stability and the predictable supply growth of bitcoin.
• Hard-Coded Supply Limit: The 21 million cap on bitcoin’s supply is hardcoded into its protocol—foundational to the system. Changing that limit would require a nearly impossible consensus among the decentralized user network. Dimon's suggestion that the cap could be altered or that bitcoin could be erased after reaching this limit ignores the fundamental tenet of Bitcoin's design.

Now that the U.S. Securities and Exchange Commission has approved spot bitcoin ETFs, bitcoin is likely to proliferate in the financial world. We believe that Bitcoin is the financial system native to the internet, that it is the first global, private, decentralized, digital, rules-based monetary system in history, and that it is a new asset class, three big ideas in one.

We would be happy to share and discuss our research on Bitcoin with financial leaders around the world, including Jamie, of course. During the past ten years, we have been giving our research on Bitcoin to anyone interested in understanding how new technologies are going to change the way the world works and, we believe, make it a better place.

Last week, Deere partnered^ix with Starlink to offer connectivity to rural farmers. In the US and Brazil, roughly 30% and 70% of farm acres, respectively, do not have access to Wi-Fi. Wi-Fi is critical to real-time data updates, optimization of crop production, and over-the-air software updates for machines in the field.

By expanding connectivity to rural areas, Deere should be able to continue its strategic pivot from traditional hardware sales to a service-oriented model that offers autonomous and precision agriculture on a subscription or per-acre basis, which could increase margins.

The Deere-Starlink partnership also positions Starlink as a key player in industrial automation, enhancing the productivity of machines across agriculture, mining, and construction with autonomous technology.