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Our mission today should you choose to accept it…
1) A trend that fascinates me…
2) A sexy ridiculous idea that I think will either be a 100x return or you’ll lose everything 🤷♀️
#1 Contrarian Thought of the Week: MICRO PHILOSOPHY
When the Minority Dictates…
Have you heard of the intransigent minority? It’s a fascinating Nassim Talebism.
Oh, you don’t know who that is? Do you even finance bro?
In all seriousness, Taleb’s mind is vast. His ideas on Black Swan events (hard to predict three standard deviation events that change everything), to Antifragility (things that gain from chaos & difficulty), to Skin in the Game (aka incentive alignment) and Fooled by Randomness (i.e. how luck factors into success) are brilliant.
Despite Taleb’s penchant for black turtle necks, I mean is there anything that screams, “I’M AN INTELLECTUAL!” more? His ideas are the best kind, they make you think. Thus when I can actually digest his rambling encyclopedias… ahem, I mean books, I emerge just a tad smarter.
One idea of his that has been living rent-free in my mind of late is:
The Intransigent Minority.
Have you heard of this? It means a small segment of any population who is intractable (won’t move, or have their minds changed) on a subject, and thus enforces their will on the majority.
For most observed complex systems (populations, companies, communities etc), the minority contingent required to flip a population to comply with their inflexible view may surprise you.
It is in the 3 – 5% range.
That’s right, 3-5% of a population can control 95% of a population.
I think of this like ‘the asymmetry of tolerance’, where some systems end up geared to suit those who care the most, against those who care the least. Still confused?
Here’s the Formula:
The majority prefers X but will tolerate Y, while a minority will only accept Y.
Why is almost half of the food in the US made to Kosher standard when only 3% care? Well, wile most Americans don’t care if their food is Kosher, almost 3% of the population will not eat it if it is not Kosher. So the food industry says - ok, we’ll make it all Kosher. I believe the same thing would hold true if 3-5% of the population was Muslim in the US (right now 1.1%), then we’d be largely eating Halal food and perhaps not realizing it.
So what matters is not the weight of numbers, it is the strength of preference that matters. Btw - I’m cool with Kosher & Halal, I’m not however cool with gefilte fish - yuck.
Ponder this for a second, in the U.S., with a population of 325 million, 3% is needed for a very strongly focused community to guide the decision-making of the many. This is what they mean when they say “The Tyranny of the Minority.” You need about 10 million people (3%), who care strongly about something, to reshape this area for the rest of the populace.
Codie why the f* are we talking about this?
It is affecting you now and you don’t even know it. My prediction - it’ll matter even more in the future.
One example, about 10% 6 of the US population now owns bitcoin. So we may be past the point of no return with this asset class. Have you met HODL’ers? Is anyone more intransigent and frothing at the mouth about their mandate for fiat currencies? Would you call them intransigent? I would.
This also means we should watch carefully the trends of the minority.
Because it turns out, only a few of neighbors need to argue so vehemently on something while the rest of us kind of take a group “meh” approach, to change just about anything. For me, this means watching where my closely held beliefs do not align with the inflexible minority and making sure my voice is heard on those issues.
In the age where the minotiry can actually rule, to the loud goes the trophy.
That both scares me and intrigues me.
Where do you think this applies that I’m missing today?
#2 SEXY: This’ll be 100x or a 0
Have you heard of Bitclout?
Gird your loins, you’re in for a ride.
Welcome to 2021.
A present-day metaverse where you can buy humans (ahem shares of humans) on the internet. Think of it kind of like Twitter but instead of ranking by followers you rank by how big your market cap is. That market cap is based on how many people have bought a share of you.
SO essentially, it’s a crypto network turning humans into tokens.
Stay with me. In Bitclout, NFTs are called Creator Coins and each represents a celeb, aka Naval or Elon Musk. The value is based on the celebrity's popularity, it rises and falls as people buy and sell. It’s very beta stage but here’s a look.
What do We Think About this Stock Market of Humans?
Jesus, if people don’t already have a complex of their self-worth on the internet I’m sure this’ll help.
Ok let’s break this Bitclout thing down:
My Immediate thought - this is dumb, I should sell everything in this bull market as people obviously have too much money to throw at nonsense.
BUT wait - It's a way to bet on people (creators) and get compensated for finding new artists, creators, and humans early - that is kinda COOL.
You can put money in, but you can't yet take it out. DUMB.
Pause: I do wish I could invest in humans all the time. Is there something here?
So, I dove in and lost a few hours of my life.
My Summary: Bitclout is kinda brilliant.
In my infinite wisdom, it’ll be either a 100x or a total 0.
Thesis is essentially: Invest in creators, they get paid, you get paid. People buy your coin (aka stock) & can profit along with you. You can also paywall your community, offer perks and overall engage more creatively.
How it Works:
You go grab your profile (or create one if you're not 1st 15k biggest Twitter accts)
You can buy my coin (plz don't I may blow it at any moment). https://bitclout.com/u/codie_sanchez
It trades like a stock. As my "value" goes up, you make $, or I fall into oblivion & my coin price crashes.
Creators get 10% of all the transactions credited to them. When someone buys my coin for instance, I get 10% of the transaction. You buy Codie coin for $100, I get $10. That part is very intriguing.
What I Don’t like About It:
You can’t take your money out right now? You have to wait until someone in Silicon Valley decides to let you sell? That's weird. #plzfix But hell, people buy pics of online cats for $2M so... who knows.
The interface is sh*t. The searchability is low. The ability to transfer money is only through bitcoin and not smooth.
The founders are anonymous so it’s all he said she said.
They don’t ask the creators their permission to put them as coins.
Speculation always makes me nervous.
BUT understanding the tech to come is an unfair advantage and, since I apparently have massive FOMO I signed up.
There I am excited, nervous, ready to post to the world AND…
Bitclout said I am worth $500 total. Rude.
Flash forward 1 hour later and I have 5 humans who think I’m marginally more valuable and I became worth $4kish. The internet is bizarre.
Honest question - does that mean Codie Sanchez just IPO’d? I’ll add that to my twitter profile like all the cool kids bragging about their SPACs. 🙄
What I Like About Bitclout:
Allows you to make money and profit alongside your favorite creators as they grow in status so hypothetically can you. Reminds me of when you “discovered” that new musician, shared her with everyone, she got famous and everyone forgets you were on the leading edge. Bitclout could change that.
Allows creators to have paywalled communities based on who their “investors” are. For instance, calls for people who have the most invested in the creator, VIP events, free swag. It’s kind of like a monetized fan club.
One of the best ways I’ve seen to play the Creator Economy.
Mr. Beast created a $2M fund to invest in Creators he’s not the first. This could be the public equity version, complete with ETFs or diversified creator funds.
How to Play It?
He Turned $75k into $350k since November?
Chatted with a friend who’d like to remain anonymous, about his Bitclout strategy.
Disclaimer: There’s a large (maybe largest) possibility this is a flash in the pan and goes away entirely. So don’t play this game if you aren’t ready to spill some blood (meaning lose all of your money).
Let’s call my friend Al.
He has turned $75,000 into $350,000 (all locked up though) on Bitclout.
His play: You help your kinda famous friends set it up, then ask them when they’re going live and buy their shares immediately. Seems a little like inside baseball, which makes me think eventually NFTs, Bitcoins etc will be registered under the SEC (when they wake up).
But there is truth to this, that’s why people like IPO’s or investing pre-IPO, you get in early and watch as liquidity and scale allows your money to multiple while you sit and wait.
What I’m planning on doing?
I allocated a couple grand across my favorite creators. I’ll keep adding to them to some deminimus amount. I won’t be day trading them but I will be investing in those I want to see win. I’ll also be watching how they serve their top coin holders. There’s magic in seeing another’s process.
One of my other favorite threads on the subject.
At the end of the day, we never knew what the internet would become in the 90’s but we knew it would be something big. Blockchain, NFTs, crypto, Bitclout all feel similar to me.
Worth an allocation to a portfolio of small bets that make you smarter and more curious about the world to come.
Question everything & clout hack,
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