Web Excursions 2021-12-31
Tokens in the Attention Economy
In reality, the only scarce resource in crypto is attention.
Risk-seeking capital is certainly not scarce.
Crypto assets are not really scarce either.
the amount of things you can speculate on in crypto is ever increasing and theoretically interminable.
More specifically, the infinity-billion dollars in risk-seeking capital are not entirely dedicated to buying the bags of crypto OGs.
Attention is a currency on the modern web.
Web2 companies figured this out ages ago.
Users pay for a service with their attention.
Companies capture this attention to ultimately sell something to the user at some point down the line.
Usually the company doesn’t sell something specifically themselves,
they just act as broker between user’s attention and businesses with something to sell.
In web3, the fight for attention is so large
that 9-figure incentive programs are the new normal, and 5-figure airdrops to users are not uncommon.
Crypto youtube influencers are commanding 5 to 6 figure advertising costs per video.
Attention is scarce and it is in high demand.
The majority of people playing the multiplayer crypto game cannot themselves sufficiently evaluate a project’s technical and fundamental merits.
Instead, retail investors reliance on signaling and social proof in decision-making is quite large.
Evidently, prices go up if there’s more demand or if there’s fewer sellers.
But the underlying factors impacting demand and supply do not change as rapidly as the cadence that players are playing the crypto bull market video game.
More specifically, protocol development and builders’ creation of value happens on multi-year timelines
whereas crypto bull market trader-gamers are operating on at-most multi week timelines and frequently shorter than that.
Attention is the only factor impacting the supply & demand variables that changes on the same cadence as the players, because it is directed and controlled by the players.
During thrill stages of a bull market, good players are not trying to buy the “best” assets.
Instead, they are trying to buy the assets that are about to cross an attention chasm,
or realise their valuation potential.
As projects increase in popularity and awareness, they become favoured amongst traders.
This period of “becoming favoured” is where asset-valutions experience the most change.
Once a project has become favoured, the amount of market participants that own this asset increases to saturation.
Once saturated, it requires
(a) the entire crypto market to grow for that asset to continue to grow, or
(b) for the fundamentals behind the asset to continue to improve relative to the market.
That’s why owning “Winners” (or “Retail Traps”) during thrill stages is less desirable to the most hardcore crypto-game players, since (a) and (b) move too slowly for these video game addicts.
There is gigantic opportunity in crypto markets, and thus similarly gigantic opportunity cost.
Good crypto game players are trying to find projects valued much lower than their potential valuations,
and then selling those good projects when they approach those valuations.
They sit in “Winners” while they look for better trades.
$SOS was airdropped by a third party to Opensea users based on their previous NFT buying history.
This is interesting because giving virtually every single serious crypto “game player” some amount of free money is a very good way to rapidly increase attention amongst all crypto game players.
Doge was another interesting attention injection for 2021.
when Elon Musk started shilling Doge, it was actually a pretty interesting moment in markets.
You could say to yourself: if Elon continues to draw attention to this, what is the max audience it can reach? How will the buy/ignore ratio above be affected?
Smart traders start selling as ownership and valuation have caught up with attention.
When projects receive a huge injection of attention which outpaces ownership, they often reprice upwards.
Cardano was a leader in retail “eth killer” attention towards the end of 2020 and in early 2021.
Plus, the bull market was just getting into gear, so lots of new participants were joining the market adding further attention.
In sum
Attention is the only scarce resource in crypto.
The best thrill traders are
hunting for low relative popularity assets
that have lots of space for their valuations to grow
if they are able to cross the chasm from obscure to popular.
selling them when ownership catches up with attention.
Holding “Winners” through thrill-stages is only for the mentally-stable, functioning human beings with well-balanced lives.
NFTs, Net Neutrality, & Emotional Reactions to Technology
[Note: The author apparently supports alt-right and vaxx conspiracy in several other occasion and has been infamous for arguing that Linux is dying each year. The points below are by themselves valid, though. Eng Note]
I love Free and Open Source Software. Love it. It is awesome.
But there are some for whom it is not so much their love of Free Software that drives their usage and advocacy of it…
but their hatred for Non-Free Software.
Closed Source software angers them.
Advocating for Free and Open Source Software, to me, makes a great deal of sense. It spreads knowledge. Joy. Love.
But when the driving force is hatred of a thing (Closed Source), instead love of a thing (Free Software), things get dark.
what is at the core of these sorts of reaction to technology (be it specific tech, licensing, or regulations around it)?
At first blush, you could almost describe the reactions as a sort of religious fervor.
A deeply held, religious belief that is driving strong emotional reactions.
Yet that doesn’t really quite make sense.
The fact is that most intense religious feelings come from a place of deeply held love for something.
So, no. It’s not really religious in nature.
And it’s not really a “my team vs your team” sort of reaction, either.
In the end, nerds support nerds. And nerdy things. That’s what we do.
We can all make a little fun of each other and still come together in friendship and a mutual love for technology in general.
But hatred of tech? That causes people to attack (in hateful ways) others for their stances (or lack of stances) on a technology topic?
I just don’t get that.
Clubhouse’s explosive growth has slowed. Its CEO does not care
“In the future, as we launch more services that allow creators to monetise,
I imagine we’ll take some fees there to fund the business,”
“But we haven’t figured out all of the specifics of that.”
Whether Clubhouse, which Davison says is “well capitalised right now”, can achieve longer-term growth and prove itself as more than a pandemic fad is unclear.
The plan is not to diversify beyond the medium of audio rather to specialise in it “as an independent company”.
Davison is quick to reel off more than a dozen activities that he hopes the platform can support,
including “radio and dating and dinner parties and company earnings calls and comedy shows and music festivals”.
Clubhouse disputed the App Annie figures, which do not include downloads to tablet devices and do not include re-installs or app updates.
Clubhouse said its own data shows 1.8m downloads in November.
It declined to share download figures for other months. It also declined to share an active user number.
“We’ve never tried to grow. We’ve only tried to not grow,” he said.
“I think that when you scale online communities, if you go too quickly, things can break.”
As the former chief executive of a cryptocurrency exchange and a proponent of decentralisation,
Davison indicates that he may also explore ways to integrate digital assets and much-hyped non-fungible tokens into the app.