AI – @habits

Recent startup, tech, AI, crypto learnings: “The surest sign of a midcurved institution is its insistence on an ability to control, predict, and dictate to complex adaptive systems”

19/ I have 0 insight if/when Indian policies change but honestly feel like the fact that the most populous country on earth has banned crypto is not discussed enough
Utterly massive opportunity when/if this changes

With a simple meme, you can make millions of people laugh all over the world. I can tweet a joke that gets 15 million views, and I can do it from my toilet. That’s scale. And as every good entrepreneur knows, wherever there’s scale, there’s a chance to turn a massive profit.
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If there were one rule to unite all memelords, it would be this: capitalize on the current thing.

Mr. Beast —
Anytime we do something that no other creator can do, that seperates us in their mind and makes our videos more special to them. It changes how they see us and it does make them watch more videos and engage more with the brand. You can’t track the “wow factor” but I can describe it. Anything that no other youtuber can do. And it’s important we never lose our wow.
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Let’s say we have 10 minute video about a guy surviving weeks in the woods. Instead of making the first 3 minutes of the video about his first day then progressing from there like a logical filmmaker would. We’d tried to cover multiple days in the first 3 minutes of the video so the viewer is now super invested in the story.
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But in general once you have someone for 6 minutes they are super invested in the story and probably in what I call a “lull”. They are watching the video without even realizing they are watching a video.

There were days back in the early 2000s when you would have no idea what to expect from a Bernanke or Greenspan-led Fed. The FOMC meetings were actually quite riveting because you simply had no idea what to expect. But not the Powell-led Fed. They often explicitly tell you what they will do, but in rare cases when they don’t, they leak it to their favorite Wall Street Journal puppet, Nick Timiraos, who spells it out for you.
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Lest you think I’m being unfair to our ivory-tower friends, here’s the lore of the term “capitalism”: borne from a socialist French intellectual and popularized by Marx. Lol. Yeah. The guys who don’t like the natural system, named the natural system something that’s kinda pejorative.

I want you to help me build a media empire, where we make (formerly) obscure scholars famous, compile the real time history of ASI, and produce the very best intellectual content in the world.

Content, confidence, and context—these are the three dimensions Shreyas Doshi discovered traditional companies use to promote employees. “This is unfortunately the cause of a lot [of] persistent frustration for otherwise-talented people who are GREAT at content, but repeatedly get passed over for promotion to higher levels… it is usually because they are not projecting as much confidence as they ought to for the next level and they are not as attuned to the context of the org & the company.”

Their SwiftNet private key infrastructure and banking messaging standards like ISO20022 are used by 11,000+ banks globally to facilitate the communication of payment instructions between banks

On Mr. Beast as Buzzfeed 2.0
(he can only sell very generic products like chocolate because his audience is so poor and so broad) — and he is in the most competitive part of the ecosystem / general entertainment.

The best ideas come as jokes. Make your thinking as funny as possible.
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Do not address your readers as though they were gathered together in a stadium. When people read your copy, they are alone.

This “secret privatization” of the entire North Korean economy has been incredibly thorough. It’s estimated that around 80 percent of all goods and services in North Korea are provided in secret and in shadow. It’s capitalism as an extremophile species of lichen, colonizing the cracks and crevices of the official society, and keeping the whole system afloat.

“The concern was that 200 phones traveling at 800 kilometers per hour in a plane could rapidly connect to many towers at once, overloading the infrastructure. At least that’s what the FCC thought could happen. So, they banned cell phone use in flight in 1991. But there’s a problem with this theory—a plane is a big metal enclosure, essentially a Faraday cage. So, it should block almost all electromagnetic signals.”

After analyzing value spread throughout his career, AQR Capital cofounder concludes that markets are becoming less informationally efficient. “You’d be forgiven if, like me, your initial whiggish assumption is that markets would get more efficient over time. After all, over the last 20-40 years the ubiquity and speed of available information has continuously grown, and at the same time trading costs have come rapidly down. But like me initially, you’d be mistaking speed for accuracy.”

In the 1950s alone, America built five generations of fighter jets, three generations of manned bombers, two classes of aircraft carriers, submarine-launched ballistic missiles, and nuclear-powered attack submarines.

In 2020/21, very loose monetary conditions + huge money printing combined with two major breakout innovations DeFi & NFTs. People were given stimmies, fiat was massively devalued again, and the prospect of decentralized finance being the genuine future of finance, alongside NFTs being the future of digital property caused enormous retail participation.

“Your highly questionable parenting vision,” responded Nicole, who was a day away from labor. “One, no school or college. Two, separate apartment in childhood. Three, move out at 16. Four, learn to drive all machines as early as possible. Five, leave the family fortune to one child. Six, children have to fly in economy while we are in business.” Luckey also believes strongly in (legally obtained) child labor (permits), that having fewer than 2.1 children would make him a traitor to the nation, and that children as young as 2 are fully capable of walking several miles without a stroller (“History shows it,” he says).
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“At some point, in business and in life and in romance, you have to commit to a path,” said the 31-year-old Luckey. “A lot of my peers in the tech industry do not share this philosophy … They’re always pursuing everything with optionality.

By 2023, the cold war between these tribes had escalated into open conflict as hedge fund billionaires led the charge to oust Ivy League presidents and The New York Times sued OpenAI. Incursions into enemy territory are treated with alarm, like when Google’s AI model Gemini was criticized by Riverians for reflecting distinctively Villagey political attitudes.
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Villagers see themselves as being clearly right on the most important big-picture questions of the day, from climate change to gay and trans rights. So they view the Riverian inclination to poke holes in arguments and “just ask questions’’ as being a waste of time at best, and as potentially empowering a wake of bad-faith actors and bigots.

Bitcoin is worth a trillion bucks and half of Wall Street owns it at this point. All the rest of crypto is worth another trillion. Tether owns more Treasuries than Germany. There’s been more than $20bn of venture capital poured into this space in the last four years. We’re not that early.

The surest sign of a midcurved institution is its insistence on an ability to control, predict, and dictate to complex adaptive systems. You don’t control them, they control you.

Envision interest rates as futures for dollars.
Interest rates = price of money

I trust GPT4 more than I trust our politicians. In the coming years AI models will become so much more capable that their judgment will start being used to mediate disputes – first inside companies but then legally . Lawyers already use it constantly.
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China was The State.
Crypto was The Individual.
It’s the Machine that will overthrow the plutocracy, because the core of the plutocracy – its super bubble was the false insistence it was a machine.

Recent startup, tech, AI, crypto learnings: “Perspective has an expiration date, no matter how hard you try to hold on to it.”

Deng Xiaoping and Robert Moses using the same strategy:
Don’t ask for permission, don’t argue, just do it and if you move fast and execute well they’ll either come to agree or, with things already half built, accept with no other choice.

Smart contract systems have proven product market fit and have dramatically increased in security and safety in recent years. They are now able to secure ~$100 billion on public networks with nation state bad actors attacking them daily. This level of security and programmability beats any existing electronic trading network.

Over a quarter century later, handling outliers is still the Achilles’ Heel of neural networks. (Nowadays people often refer to this as the problem of distribution shift.)
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(This is also why we still use calculators rather than giant, expensive, yet still fallible LLMs, for arithmetic. LLMs often stumble on large multiplication problems because such problems are effectively outliers relative to a training set that can’t sample them all; the symbolic algorithms in calculators are suitably abstract, and never falter. It’s also why still use databases, spreadsheets, and word processors, rather than generative AI for so many tasks that require precision.)

This is bullshitization, a process like financialization or enshittification. A derivative phenomenon that amplifies the underlying bullshit instead of attenuating it.

the Ministry of Finance, working with the central bank, spent 9T Yen, or around $55B USD, in currency interventions between these two moves. Recall that they have around $100B USD in liquid cash and $1T USD in Treasury bonds, both of which could be used theoretically to defend their currency

However, if you’ve ever been a manager, you know that a “good” direct report is able to magically transform your vague idea into a really great outcome. You can say, “find me a stock to invest in,” and a good employee will come back with something dazzling. The less time you have to spend specifying what you are looking for, the more valuable that employee becomes

The Plaza Accord was an unprecedented (now rarely mentioned) weaponization of the dollar by the US to dethrone Japan’s economic leadership – via USD depreciation. This is where the now widely popularized “Carry Trade” was bourn, compounded by a series of mistakes by the BoJ, and how the social contract between the two countries were forever set in stone as America willed: “you fund our debt for life, and we will give you military protection given you still need to repent for the sins of WWII”. The Japanese agreed.

“When you have a disruptive technology, they call it a category killer. Bitcoin is a serial killer – it’s going to go through 40 or 50 different industries” – Dan Morehead

When Nixon closed the gold window, the US had a debt-to-GDP ratio of 35%, West Germany was at 18%, and Japan was 10%.
Today the US is at 135%, the Eurozone’s at 91%, and Japan’s above 260%.

However, because this configuration bug hit very widely distributed software running in kernelspace almost universally across machines used by the workforce of lynchpin institutions throughout society (most relevantly to this column, banks, but also airlines, etc etc), it had a blast radius much, much larger than typical configuration bugs.

Like Americans in general, American Bitcoiners can be found across the political spectrum— but they tend to be moderates. Bitcoin owners tend to be younger and male, but are otherwise diverse. When it comes to race, ethnicity, income, education, and financial literacy, Bitcoin owners look much like the rest of the U.S. population.

“I’ve just become president of PepsiCo, and you couldn’t just stop and listen to my news,” I said, loudly. “You just wanted me to go get the milk!” “Listen to me,” my mother replied. “You may be the president or whatever of PepsiCo, but when you come home, you are a wife and a mother and a daughter. Nobody can take your place. “So you leave that crown in the garage.”

BIS had been created by the world’s leading central banks to administer German reparations payments after World War I, but it soon took on a life of its own, transforming itself into a pillar of the emerging global financial system.

On Putin:
Lyudmila did not know he worked for the KGB. He had told her, too, that he worked for the criminal investigations branch of the Ministry of the Interior. It was a common cover for intelligence agents, and he had even been issued a false identification card.

“In reality, it’s inevitable that overseas AI companies see Japan as a paradise for copyright violation and machine learning since unauthorised learning is continuing no matter how much illustrators are being hurt by generative AI.”

After Alexander proved the effectiveness of the Macedonian phalanx, it spread throughout the Hellenistic world and became the default military formation for centuries.
It only had one weakness…
When Rome invaded Macedon in 214 BC, they exploited the Macedonian army’s inability to maneuver while in formation and devastated their flanks and rear.

As Guidara went through these trying times, his father encouraged him to maintain a journal of his thoughts. Frank said: “Perspective has an expiration date, no matter how hard you try to hold on to it.”

Less than twenty years after the Perry expedition, Japan had upgraded from junks to steam-powered destroyers. In 1894–95, Japan easily trounced the Chinese up and down the East Asian coast in the Sino-Japanese War. In 1904–5, Japan conquered all of Korea while also sinking the entirety of both Russian fleets in the Russo-Japanese War.

That $175.3T lines up with the ~$200T number that Druckenmiller has been using for the all-in liabilities of the US government when you take everything into account.
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More than defense, or social security, or anything else. The number one thing all tax dollars (and printed dollars) now go towards as of 2024 are payments to bondholders.

One of my formative experiences has been building our services constrained by what Apple will let us build on their platforms. Between the way they tax developers, the arbitrary rules they apply, and all the product innovations they block from shipping, it’s clear that Meta and many other companies would be freed up to build much better services for people if we could build the best versions of our products and competitors were not able to constrain what we could build. On a philosophical level, this is a major reason why I believe so strongly in building open ecosystems in AI and AR/VR for the next generation of computing.

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“Italians over the age of 100 are concentrated into the poorest, most remote and shortest-lived provinces, while US supercentenarians are concentrated into populations with incomplete vital registries…”
5/n
“Both patterns are difficult to explain through biology, but are readily explained as economic drivers of pension fraud and reporting error.”

For example, Okinawa has the highest number of centenarians per capita of any Japanese prefecture and remains world-famous for remarkable longevity.”
7/n
”Okinawa also has the highest murder rate per capita, the worst over-65 dependency ratio, the second-lowest median income, and the lowest median lifespan of all 47 Japanese prefectures”

“Surveying the ‘blue zone’ of Ikaria, Chrysohoou et al. observed that the oldest-old have: a below-median wage in over 95-98% of cases, moderate to high alcohol consumption, a 10% illiteracy rate, an average 7.4 years of education, & a 99% rate of smoking in men”
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By the time Vladimir joined, the KGB had grown into a vast bureaucracy that oversaw not only domestic and foreign intelligence matters, but also counterintelligence at home and abroad, military counterintelligence, enforcement of the border and customs, and physical protection of the political leadership and government facilities like the country’s nuclear sites. There were directorates that oversaw communications and cryptography, and that monitored telephone calls. The Sixth Directorate monitored “economic security” by policing speculation, currency exchanges, and other signs of deviant free-market activity. The Fifth Chief Directorate, created in 1969 to “protect” the Constitution, enforced party loyalty and harassed dissidents in all walks of life. The KGB was more than just a security agency; it was a state within the state,

Under Trong’s watch, the Politburo of the Communist Party, the country’s highest decision-making body, boasted an unprecedented large number of members with military and security background. Of its current 14 members, there are 5 with background in the security and police /7
forces and 3 with background in the military. As the Ministry of Public Security was the anti-corruption campaign’s key enforcers, its leader (now President To Lam) has become Trong’s most likely successor.
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Under Trong’s leadership, Vietnam upgraded its ties with South Korea, the United States, Japan, and Australia to /11
“comprehensive strategic partnerships,” while also joining China’s “community with a shared future (a.k.a. “community of common destiny”). This was a great feat in a growingly divided region, as Vietnam now stands out as the only comprehensive strategic partner of all major /12
powers in the Indo-Pacific.

Here’s the last one.

Recent startup, tech, AI, crypto learnings: “The user is never wrong” — Larry Page

Here’s the last one.

The average return on a token that paid for media space on DexScreener was -50% over only a 24 hour period.
Heuristic: If someone is paying cash to make sure I see a token, it’s so they can dump on me if I’m stupid enough to pay attention.

Close to 3/4 of startups work fully remote — in Alliance DAO

Aggregations of opinion polls in the 1960s have shown approval of the moon landing was consistently lower than disapproval. One poll of astronomers showed a majority against the mission. Even President Kennedy’s own head of Science Advisory Committee – Jerome Wiesner – opposed a manned mission, releasing a critical report on the notion.
Popular opposition isn’t something you often hear about regarding the Apollo program. It is conveniently missing from America’s collective memory, in lieu of a tale of collective patriotic triumph. A narrative that pleases Democrats as an example of successful big public programs and Republicans, as a triumph of the capitalist west against the communist east.
47% said it was worth it a decade later, in 1979 and it would take 20 years for amnesia to set it and this number to reach 77% in 1989.

There are just 21 million #bitcoin after all… How scarce that number. There are something like 59 million millionaires in the world (not enough for all of them to hold even 0.36 BTC).

Josh Kopelman: VC is anti network fx. The more you invest the harder to help them

5 levels to AGI according to OpenAI:
1. Chatbots
2. Reasoners
3. Agents
4. Innovators
5. Organizations

Level 3 is when the AI models begin to develop the ability to create content or perform actions without human input, or at least at the general direction of humans. Sam Altman, OpenAI CEO has previously hinted that GPT-5 might be an agent-based AI system.

@feketegy
This is exactly my thought too, think of programming mainframes in FORTRAN or COBOL in the 70s then PCs with ASM and C in the 90s and now LLMs plugs into many languages giving context to code bases where there were none before.

The above figures are clear: There is almost no persistence in CEO performance. The observed number of CEOs in each category is indistinguishable from what we would expect if the process were entirely random

44% of Bitcoin nodes are currently at the chain tip (fully synced with the network), with an additional 48% synced within 5 blocks of the chain tip, resulting in an enormous 92.8% are synced within 5 blocks. Only 7.2% of nodes are more than 5 blocks behind.

While we kept plodding on the “pure dual-core”, Intel, still smarting from the x64 defeat just slapped two 1x cores together, did some smart interconnects, & marketed it as “dual core”. Joke at AMD was that Intel’s marketing budget was > our R&D (true fact). Customers ate it up.
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We did launch a “true” dual core, but nobody cared. By then Intel’s “fake” dual core already had AR/PR love. We then started working on a “true” quad core, but AGAIN, Intel just slapped 2 dual cores together & called it a quad-core. How did we miss that playbook?!

Today ‘summarise this document’ is AI, and you need a cloud LLM that costs $20/month, but tomorrow the OS will do that for free. ‘AI is whatever doesn’t work yet.’

power is becoming the main constraint. US electricity production has barely grown in a decade
– the US could solve this with natural gas. we have abundant supply and could build out capacity fast (my note: i wonder if bitcoin miners can help this?)
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algorithmic secrets are worth 10x+ more compute. we’re leaking these constantly
– model weights will be critical to protect too. stealing these could let others instantly catch up

Looking at the spending behaviour of long-term holders, it can be seen that although the spent volume by these players constitutes only 4%-8% of the total volume, the profits realized from this spending typically account for 30%-40% of cumulative profits realized over bull markets.

Every Wednesday morning, Amazon’s executive team gets together and goes through 400-500 metrics that represents the current state of Amazon’s various businesses. The meeting lasts 60 minutes, except for when it’s the holiday shopping season, in which case they sit together for 90 minutes. Amazon’s leadership meets for the Weekly Business Review every week, without fail, even when the CEO or CFO isn’t present. They’ve been doing this since the early 2000s.
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The Amazon-style WBR is designed to answer three questions:
What did our customers experience last week?
How did our business do last week?
Are we on track to hit targets?

It is easy to trade social capital for financial capital. But while you can cloak yourself in blue-chip designers all you like to impress your fellow financiers, it is extremely hard to trade financial capital for social capital.
You’ve seen this with every washed-up celebrity you know: when the coolest people become rich, even they can’t remain cool.

Larry Page: the user is never wrong

Empower your employees to build their social presence.Tap into those audiences for key company announcements.Build a culture around this so that net new employees can replenish the distribution when people inevitably leave.

Reason Google took so long to build cloud service is because it was lower margin than ads. No internal incentives. Same reason Amazon did it so quickly — higher margin than retail, “your margin is my opportunity”

All this to say that I’ve shifted my thoughts from “crypto and web3 will absorb tradfi” to “crypto and web3 serve as the base layer for AI”
Web3 isn’t our internet… it will belong to the machines

Laffont / Coatue:
$100T in CPU / PC infra investment
Believes all this will be replaced by $100T or more in GPU infra investment — but quantum will be very small part of it

China has commenced operation of the world’s first fourth-generation nuclear reactor, for which China asserts it developed some 90 percent of the technology.
Overall, analysts assess that China likely stands 10 to 15 years ahead of the United States in its ability to deploy fourth-generation nuclear reactors at scale

1) Many international individuals decide to start their company in the US (for example Snowflake was founded by 3 French people but it is an American company) as there are fewer regulations (Europe is very complicated given different states have different laws)
2) Source of Capital: the US has an amazing venture capital environment with investors who can act quickly and are willing to lose capital. In Europe, raising capital is much harder and lengthy

In 5 years, it’ll seem bizarre that we ever allowed anyone to email or text or call us AND the norm was to at least think about replying to them. Being reachable 24/7 by anyone and for anything will have been a blip in time, an absurd anomaly in the long arc of the hyperconnected digital age.

This gave those labels a lot of power over Spotify, but not all the labels, just three of them. Universal, Warner and Sony, the Big Three, control more than 70% of all music recordings, and more than 60% of all music compositions. These three companies are remarkably inbred. Their execs routine hop from one to the other, and they regularly cross-license samples and other rights to each other.

As we pored over the code, we found that, although there were a few human women on the site, more than 11 million interactions logged in the database were between human men and female bots. And the men had to pay for every single message they sent. For most of their millions of users, Ashley Madison affairs were entirely a fantasy built out of threadbare chatbot pick-up lines like “how r u?” or “whats up?”

Value of information is the amount of surprise — information theory

Crypto’s trends from the ICO boom; to NFT summer; to socialFi, to memecoining, show me that people like to do their own research, get some sense of market advantage and then buy in size.
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This past week we had one of the most bullish signals for the crypto industries with the SEC dropping its case against ConsenSys, alongside an imminent launch of the $ETH ETF. Despite this, $ETH has drawn down 12% from local highs, with majority of altcoins down anywhere from 10-50% in the past week when I first expressed this view.
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Crypto-native positioning is more relevant for alts, where liquidity and thinner and % of participant that is crypto-native is higher. For $BTC and $ETH, the consideration is more PvE in nature vs PvP, and my believe are these two are still flag-bearers for the market, especially given the decimation in TOTAL3.

Recent startup, tech, AI, crypto learnings: “some of the most successful consumer products started as what we’d now call tarpit ideas. Think Facebook, Instagram, DoorDash, Yelp”

Yet, some of the most successful consumer products started as what we’d now call tarpit ideas. Think Facebook, Instagram, DoorDash, Yelp. You could argue the problems they were tackling weren’t as broadly appealing at the time, but they weren’t first in their category either. There’s hindsight bias too — they were so wildly successful that we really can’t call them tarpit ideas anymore.

Crypto’s trends from the ICO boom; to NFT summer; to socialFi, to memecoining, show me that people like to do their own research, get some sense of market advantage and then buy in size.

The iPhone’s launch in 2007, was clearly disruptive to the existing “smartphone” market controlled by Blackberry and Palm Pilot. But a few years later, the iPhone went on to disrupt nearly every industry via the creation of the mobile interface. (And we predict that a similar delayed reaction is likely to happen in generative AI as well).

The end of 2023 marked an inflection point for the presence of memes on chain. Averaging about 9,000 new tokens per day from August to November of 2023, Solana now averages more than triple that at 28,000 per day. At its peak, it topped 100,000 new tokens per day using the 30-day moving average (670,000 outright).

One general rule of technical advancement is that it’s not necessarily the most feature rich variant of a new technology that reaches the tipping point and critical mass, or even the cheapest or most available: rather, it tends to be the easiest to use.

And as Sam Altman once said, every year we get closer to AGI everybody will gain +10 crazy points.
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In any case, people overrate the importance of open-source as we get closer to AGI. Given cluster costs escalating to hundreds of billions, and key algorithmic secrets now being proprietary rather than published as they were a couple years ago, it’ll be 2-3 or so leading players, rather than some happy community of decentralized coders building AGI.

If the last couple waves of startups felt like 10x improvements, AI provides what feels like a 100x better experience than the incumbent substitute (humans!) by compressing what is almost always the significant effort of hiring and managing another person, into a near instant experience that will only get better over time. To do this at a small fraction of the cost of hiring/managing that human dramatically opens up limitless use cases and therefore dramatically expands the market. If people underestimated the size of Uber’s market initially, we’re all underestimating the size of many AI startups’ opportunity.

The analogy here is to Search, another service that requires astronomical investments in both technology and infrastructure; Apple has never built and will never need to build a competitive search engine, because it owns the devices on which search happens, and thus can charge Google for the privilege of making the best search engine the default on Apple devices. This is the advantage of owning the device layer, and it is such an advantageous position that Apple can derive billions of dollars of profit at essentially zero cost.

Coinbase: Last piece of big puzzle is international expansion. 17% of revenue today. We’ve picked 10 markets. “Go deep markets”

Though the team used to run a marketing agency, working with brands like Casper in order to fund MSCHF projects, they stopped taking on clients last year. Now, they pretty much do whatever they want.
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“Everything is just, ‘How do we kind of make fun of what we’re observing?’” Mr. Whaley said. “Then we have as much fun with it as possible and see what happens.”

Ethereum is a vision with a business while Solana is a business with a vision.

On the one end there are the doomers. They have been obsessing over AGI for many years; I give them a lot of credit for their prescience. But their thinking has become ossified, untethered from the empirical realities of deep learning, their proposals naive and unworkable, and they fail to engage with the very real authoritarian threat.

In the early folds of the paper—for instance, when you’ve folded it seven times and it’s still less than an inch thick—it is hard to see how it is possible that on fold fifty, a thin piece of paper could reach the sun.
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we get frustrated when our wifi won’t transfer in two seconds what would have taken twenty minutes in the year 2000.

The project that has done the most on the former is perhaps Worldcoin, of which I analyze an earlier version (among other protocols) at length here. Worldcoin uses AI models extensively at protocol level, to (i) convert iris scans into short “iris codes” that are easy to compare for similarity, and (ii) verify that the thing it’s scanning is actually a human being. The main defense that Worldcoin is relying on is the fact that it’s not letting anyone simply call into the AI model: rather, it’s using trusted hardware to ensure that the model only accepts inputs digitally signed by the orb’s camera.

Modularization incurs costs in the design and experience of using products that cannot be overcome, yet cannot be measured. Business buyers — and the analysts who study them — simply ignore them, but consumers don’t. Some consumers inherently know and value quality, look-and-feel, and attention to detail, and are willing to pay a premium that far exceeds the financial costs of being vertically integrated.

When hype hit Snapchat, the product and growth loops had been maturing for months without any distortion from hype.

Rather, a useful way to think about generative AI models is that they are extremely good at telling you what a good answer to a question like that would probably look like. There are some use-cases where ‘looks like a good answer’ is exactly what you want, and there are some where ‘roughly right’ is ‘precisely wrong’.

The number of Chinese websites is shrinking and posts are being removed and censored, stoking fears about what happens when history is erased. China’s internet had 3.9M websites in 2023, down ~27% from 2017; Chinese-language websites were 1.3% of the global total, down 70% from 4.3% in 2013

https://longform.asmartbear.com/extreme-questions/
-If you were forced to increase your prices by 10x, what would you have to do to justify it?
-If you were never allowed to provide tech support, in any form, what would have to change?
-What would be the most fun thing to build? When we work on things that are fun, we work better and harder, yet are happy to do it.
-If our biggest competitor copied every feature we have, how would we still win?
-What if our only goal were to create the most good in the world, personally for our customers?

https://www.workingtheorys.com/p/software-creator
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They’ll make simple software fast and at high frequency. They’ll have small teams (or no team) and engage directly with their users. Like content creators, there’ll be many kinds of software creators in many mediums. There will be short-form software creators and long-form software creators. There will be educational software creators, entertainment software creators, and lifestyle software creators.
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We’ll see a lot more software as art, software as a game, software as an experience — not just software as a never-ending utility.
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More software will be niche, private, personal, and local – and this will be economically rational. And just like we subscribe to our favorite content creators, we’ll subscribe to our favorite software creators too.

Late on the night of June 2nd, the Mianbi Intelligence team confirmed that the Stanford large model project Llama3-V, like MiniCPM, could recognize the “Tsinghua Simple” ancient Warring States script, “not only getting it exactly right, but also making the exact same mistakes.” This ancient script data was manually annotated by the research team after months of scanning word by word from the Tsinghua Simple, and was not publicly available, confirming the fact of plagiarism.

As an investor, the AI opportunity is obviously colossal and on a par with the invention of the internet or railroads in terms of disruption and value creation. But I think it’s likely to be “too successful” in terms of disrupting society. I believe that the effect of AI on the workforce will lead to an empowering of socialist, anti-capital dynamics in the west. So while the move is to allocate aggressively, you have to consider the reprisals to come.

Because the best possible way to find product-market fit is to define your own market.

Soon, some company will make smart glasses that sit in front of our eyes all day. We will go from 50% attention on screens to ~90%+ That’s the moment in time when the metaverse starts. Because at that moment, our virtual life will become more important than our real life.

11/ Crypto users show high present bias (~0.4) and notably low discount factor indicating a tendency toward impatience and immediate gratification

“Without a doubt, memes are becoming a universal language. Memes are shared on every social platform: Facebook, X, Instagram, TikTok, Reddit, family group chats, company Slack channels, marketing messages, celebrity feuds, etc. But if you google the market size of the meme industry, the projected value is expected to be $6.1B in 2025. This makes no sense when one meme coin (like $PEPE) has nearly that value as a market cap. Given how memes drive culture, politics, and entertainment, I’d be so bold to say that the true market size is at least 100x in size.”

one of the few people who recognized, early, the potential dangers of unaligned AGI, Musk, has switched teams, flipping from calling for a pause to going all in on—and wildly overhyping—a technology that remains exactly as incorrigible as it ever was.

Collectively, founders typically own 8–12% of max token supply with individual founders owning between 2.5–7.5% with 4–6% being most common.

Open-source will have a home wherever smaller, less capable, and configurable models are needed – enterprise workloads, for example – but the bulk of the value creation and capture in AI will happen using frontier capabilities. The impulse to release open-source models makes sense as a free marketing strategy and a path to commoditize your complements. But open-source model providers will lose the capital expenditure war as open-source ROI continues to decline.

Cailliau told Motherboard that to make this bot, he first created a large language model framework that was customized to reflect his girlfriend, Sacha’s, personality. Cailliau said he used Google’s chatbot Bard to help him describe her personality. Then, he used ElevenLabs, an AI text-to-speech software, to mimic his girlfriend’s voice. He also added a selfie tool into the code that was connected to the text-to-image model Stable Diffusion that would generate images of her during the conversation. Finally, Cailliau connected it all to Telegram using an app called Steamship, which is also the company he works at.

Software is expensive to create. You have to pay people to create it, maintain it, and distribute it. Because software is expensive to create, it has to make money. And we pay for it–software licenses, SaaS, per seat pricing, etc. Software margins have historically been an architectural envy–90+% margins and zero marginal cost of distribution.

“One of the fundamental rules of marketing is that “a confused mind always says no.”
“People won’t care about any of the success you’ve had, and they won’t follow you or your advice until they know that you’ve been where they are now.”
“If you’re neutral, no one will hate you, but no one will know who you are either.”

I still remember the days when “tokenomics” seemed cheesy af. It felt too academic, like Wall Street bros trying to enter the crypto clown arena in their suits and slacks. Now, a few short years later, tokenomics are widespread and heavily scrutinized. Attentionomics feels like a new appendage in the tokenomic arsenal.
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Have said before that I believe the biggest memecoins will morph into unrecognizable monsters with chains, dexes, branded apps and more (imagine Pepechain). They will iteratively add utility (just as we saw last cycle w NFTs).

Open-source models have no feedback loop between production usage and model training, so they foot the bill for all incremental training data, whereas closed-source models drive compounding value with data from incremental usage.
If Meta differentiates their model based on their social graph or user feedback, they’ll want to capture that value via their closed products, and not share it with the world.

Cypherpunks participate in core Ethereum research and development, and write privacy software
Regens do Gitcoin grants rounds, retroactive public goods funding, and various other non-financial applications
Degens trade memecoins and NFTs and play games

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Here was the last post on AI, crypto, startup, tech learnings :)

Highway to the Banana Zone

I think this cycle (2024 and 20205) could be the last great crypto bull run. A bull run that surprises everyone, with price action more like 2017 than 2020, and a prolonged and absolutely silly banana zone (to borrow Raoul’s term).

I really like this thread from Yano: https://x.com/jasonyanowitz/status/1762878540280946737?s=46

Using his framework, we’re now between stage 2 (excitement) and 3 (euphoria). We’re seeing many signs of euphoria already: break ATHs; $500M VC funds; athletes & artists. Stage 3 will accelerate as soon as bitcoin re-captures its ATH (~$73K) and I believe we’ll fly — almost teleport — directly to stage 4, which in Yano’s words:

This stage could also be described as Insanity. Nothing makes sense anymore…A crypto person buys a sports team…Justin Bieber joins a decentralized social platform.

Another good framing from Qiao:

top signs of the last cycle, eg celebrities endorsing crypto, r too obvious to work again this cycle
think 10x bigger
this cycle itll be something like mega pension funds or sovereign states yolo into btc

Source: https://x.com/QwQiao/status/1795545263727120778

Hard agree. El Salvador is showing impressive returns (financial and reputational) to their BTC adoption strategy. Nation states are investing in BTC mining. Sovereign funds are rumored to be quietly accumulating (Saudi Arabia, Norway, Kuwait).

The game theory is unfurling, and increasingly unavoidable as government debt continues to rise and fiat currencies continue to subsequently weaken.

Look at gold’s current run. Look at G7 long term bond yields.

And finally from Gwarty:

I am horrified to think about what the top signals are going to be this cycle

Source: https://x.com/GwartyGwart/status/1795896460602409076

Some more signs the highway to the banana zone is coming, and is gonna be quite a ride:

The US presidential race hasn’t begun in earnest, yet crypto is already a meaningful wedge issue (SAB121, Trump’s endorsement, FIT21, ETH ETF)
Fed rate cuts have yet to start (expectations for the first cut in late Q3/Q4)
Mainstream has started buying and announcing bags in earnest (Bitcoin ETF 13F filings, Fink and Blackrock heavily leaning in, Chamath on All-In)
We haven’t even seen this cycle’s SBF, Do Kwon, Alex Mashinsky… (or have we)

And how will we know we’re in the zone? Some wild signals:

Last cycle darlings get a rescue pump (Doge passes ATH at $0.68 / $100B market cap, on rumors of potential Dogecoin ETF; NFT pumps including yes, even those poor Apes)

Crypto influencers become nominal billionaires (this cycle’s main characters like Ansem… puncher’s chance to Andrew Tate…). Probably a non-crypto influencer launches a billion dollar coin… Iggy may get lucky if she keeps grinding and memeing (just watch the fomo that will result)

Bitcoin briefly top ticks gold’s market cap (a hand wavy $10T which implies a per bitcoin price of ~$500K USD)

Ethereum briefly top ticks Bitcoin’s market cap (if this happens, it would happen AFTER bitcoin top ticks gold, then crashes, then ETH has an epic run)

Punks surpass $1M (~10x today’s prices)

Raoul Pal is anointed Wall Street’s crypto pied piper, briefly obtaining Bill Ackman and Stanley Druckenmiller levels of influence (think Novogratz but 10x bigger, on magazine covers, TV mainstay, all of that)

A nation-state on the level of UAE or Brazil or Switzerland publicly announces multi-B crypto holdings (could be Bitcoin, could be Ethereum, could be a surprise like Ripple hah) and a set of policies to attract crypto natives and encourage local crypto adoption

The AI hype becomes completely subsumed by crypto; “AI-crypto” projects and narratives dominate non-crypto AI; OpenAI / Sama join the party with some superficially promising but substantively meaningless announcement

Massive M&A in crypto space from miners to exchanges to protocols (Robinhood’s $200M purchase of Bitstamp is an appetizer)

One of the FAANG/MAMAA tech giants becomes first to stake brand and reputation into crypto (my bet is on Meta because of 1, their recent support for open source AI, 2 their failed attempt with Libra, and 3 Zuck’s ambition and continued ability to reinvent)

A meaningful number of provincial / local governments start to buy regulated crypto products; US states are heavily indebted so I’d expect players like Texas, or Hawaii, or maybe at municipal / county level to participate

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Where do you think I’m wrong? What am I missing? I plan to add more stuff here as we get deeper into the cycle.