Lindy Effect 101

With Bitcoin's return to the spotlight, debates on its long-term viability are raging. Its proponents contend @nntaleb's Lindy Effect says the technology is here to stay.

But what is the "Lindy Effect" and how does it work?

Here's Lindy Effect 101!

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Survivorship Bias 101

History is written by the victors. But if we exclusively focus on these successes, we allow survivorship bias to distort our understanding of the world.

But what is "survivorship bias" and how does it work?

Here's Survivorship Bias 101!

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1/ First, a few definitions.

Survivorship bias is the logical error of concentrating on survivors (successes) and ignoring casualties (failures).

When we do so, we miss the true "base rates" of survival (the actual probability of success) and arrive at flawed conclusions.

2/ When we completely ignore failures, we lose our ability to correctly identify the differences between successes and failures.

Put simply, exclusively focusing on successes may actually inhibit our ability to identify (and replicate) the actions that led to such success.

3/ Cicero wrote on the topic over 2,000 years ago.

An atheist named Diagoras is shown portraits of people who prayed and were saved from death at sea as proof of God's existence.

Diagoras replies, "I see those who were saved, but where are those painted who were shipwrecked?"

4/ Cicero cuts right to the point - we cannot conclude that prayer led to being saved from the sea if we ignore those who prayed and then drowned.

Survivorship bias can lead to a deeply-flawed understanding of cause-and-effect relationships.

Let's look at some examples.

The Eisenhower Decision Matrix is a powerful tool for prioritizing your time and unlocking growth in your career, startup, business, relationships, or life.

A thread on how it works and how it can change your life...

Dwight D. Eisenhower was an American military officer and politician.

He was a five-star general in the United States Army and the first Supreme Commander of NATO.

After his military career, he was elected as the 34th President of the United States, serving from 1953 to 1961.

In both his military and civilian careers, Eisenhower stood out for his prolific productivity.

His secret?

Eisenhower observed that people often confuse the urgent with the important. He did not.

"What is important is seldom urgent and what is urgent is seldom important."

The Eisenhower Decision Matrix is a visualization tool that forces you to differentiate between the urgent and the important.

It allows you to prioritize your time accordingly and unlock new productivity and growth.

Let's cover the basics of how it works...

First, we have to define "urgent" and "important."

An "urgent" task is one that requires immediate, focused attention.

An "important" task is one that promotes or furthers your long-term values, goals, or principles.

Remember: Tasks can be both urgent and important.

How to Win (without talent or luck):

Operate in Your Zone of Genius

Your Zone of Genius is where your interests, passions and skills align.

Operating in your Zone of Genius means playing games you are uniquely well-suited to win.

Once you identify it, you can stop playing *their* games and start playing *yours*.

Adopt a Positive Sum Mentality

Want to get ahead in life? Start genuinely rooting for others to succeed.

When one of us wins, we all win—winning spreads.

If you adopt that mentality, you’ll become a magnet for the highest quality people.

Speak Up

Closed mouths don’t get fed.

A little push goes a long way. Don't sit back and wait for good things to happen.

If you want something—and you’ve put in the work for it—ask for it.

Worst case: you’re told no and nothing has changed.

Best case: it’s yours.

Play Long-Term Games

Life is the ultimate long game.

Those with low time preference play it more effectively—they happily delay gratification to allow compounding to work its magic.

In a world of people seeking instant gratification, this is a meaningful edge.

Powerful concepts everyone should know (to understand the world):

The Paradox of Advice

Taking more advice leaves you less well-equipped.

Most advice sucks.

It's well-intentioned, but it's dangerous to use someone else's map of reality to navigate yours.

Winners learn to filter and selectively implement—take the signal, skip the noise.

The Feynman Technique

To learn anything:

Step 1: Identify a topic
Step 2: Try to explain it to a 5-year-old
Step 3: Study to fill in knowledge gaps
Step 4: Organize, convey, and review

True genius is the ability to simplify, not complicate.

Simple is beautiful.

Fundamental Attribution Error

Humans tend to:

(1) Attribute someone else's actions to their character—and not to their situation or context.

(2) Attribute our actions to our situation and context—and not to our character.

We cut ourselves a break, but hold others accountable.

Time Billionaire

Time is our most precious asset.

When you're young, you are a "time billionaire”—rich with time.

Too many people fail to realize the value of this asset until it is gone.

Treat time as your ultimate currency—it’s all you have and you can never get it back.

The Cantillon Effect is the most important economic concept you’ve never heard of.

Here's a breakdown of what it is (and why you should care):

1/ Richard Cantillon was an Irish-French economist and philosopher born in the 1680s.

He achieved success as a banker—which he attributed to the formidable connections made through his family and employer.

At a young age, he had learned of the impact of proximity to power...

2/ Around 1730, Cantillon wrote a paper—Essay on the Nature of Commerce in General—which is considered a foundational work in the study of the political economy.

It was widely circulated in manuscript form, though it was not published until 1755, well after his death.

3/ In the paper, Cantillon posited that the early recipients of new money entering an economy will benefit more significantly than those it trickles down to.

In other words, the "flow path" of the new money matters!

4/ In 18th century terms, those closest to the King—the source of money/power—benefitted first when new money entered the economy.

Broadly, Cantillon observed that new money creates distributional effects based on where it enters the system.

The Cantillon Effect was born...

Slow and steady wins the race

Bitcoin is often critized for being slow in everything

But here is the thing: the more you complicate a design early on, the more you push it down a specific road

Get your assumptions wrong, and it's off-road

Thread/

Think crypto is confusing?

You're right.

Let's make it easier.

Here's Crypto Terminology 101: 🧵

Altcoin:

Any coin that's not #Bitcoin

Ether (#ETH) is the second most popular coin overall and the most well-known Altcoin.

Ether is the native cryptocurrency on the Ethereum blockchain.

There are thousands of other altcoins, but for now, this is the one to know.

Bitcoin: (#BTC)

The first decentralized digital currency.

Launched in 2009 by an unknown person or organization known only as "Satoshi Nakamoto."

It is the most famous, and most valuable cryptocurrency.

Blockchain:

The core tech behind Bitcoin and most other cryptocurrencies.

An open, distributed, general ledger where transactions are organized into blocks which are then connected using cryptography.

Coin:

A store of digital value that lives on a blockchain.

Some blockchains, such as Bitcoin, use the same name for both the network and the coin.

Stable coins are another type of cryptocurrency which are backed by fiat currency (e.g the US dollar) or commodities such as Gold.

1/29 #Bitcoin thread, updated version

We’ve doubled since the last time I updated this thread, so I thought it would be of some value to update it. Feeling insecure about price action? Too enthusiastic/scared? Maybe this helps a bit, go check it out!

TLDR at 27-29
Let’s go!🔥

2/ 2 Year MA Multiplier
This indicator uses the 2Y MA. Green line is the 2Y MA, red is the same MA x5

2ya MA multiplier is rising and at ~48k rn. Price goes parabolic. I would personally love to get a decent correction, would give more space for growth long term imho.

3/ Relative Unrealized P/L
Paper p/l in $Btc. Use it to track investor sentiment.
Market is overheating, everybody is in paper profits, but as you can see “we” as a whole take too less profit. We can stay around greed for a whole year, but a correction at this point makes sense

4/ 200 Week MA Heatmap
#Bitcoin likes to bottom out near the 200W MA
Colors are attached to % increase of MA
Blue/purple = Buying opportunity
Orange/red = TP opportunity
The bigger the distraction, the more parabolic price goes, simply said
First green coming(?) Room for growth

5/ MVRV Z-score.
To identify periods when $Btc is extremely under/overvalued.

Green= MV unusually far below RV, buying opp
Red=MV unusually high above RV, TP opp.

Now: heating up. Correction first to cool it off plz :)
Nice uptick in realized value.