The Lindy Effect is a theory that the future life expectancy of specific non-perishable items, like a technology or idea, is proportional to their age.
Put simply, the longer it has already lasted, the higher the likelihood it will continue to last.
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!
👇👇👇
The Lindy Effect is a theory that the future life expectancy of specific non-perishable items, like a technology or idea, is proportional to their age.
Put simply, the longer it has already lasted, the higher the likelihood it will continue to last.
While author Albert Goldman used the term "Lindy's Law" in a 1964 article, it was mathematician Benoit Mandlebrot who moved the dialogue towards the current definition.
The longer he lasted, the longer he would continue to last.
He noted the Lindy Effect with books - the longer a book has been in print, the longer it is likely to survive.
With no natural upper bound, power laws come into play.
What are some useful applications of the Lindy Effect in helping you understand the world?
Given its recent rise and accelerating mainstream adoption, let's look at Bitcoin and how the Lindy Effect may apply.
The Bitcoin Genesis Block was created in January 2009 and it has continued to survive in the nearly 12 years since that date.
It has withstood technological and societal attacks.
The Lindy effect says the fact that Bitcoin has survived this long makes it likely to survive much longer. https://t.co/2MRgHzP9Dy
In 1637, the Dutch Republic erupted into a speculative fever over an unlikely item...the tulip.
— Sahil Bloom (@SahilBloom) November 9, 2020
Tulip Mania has become a legend synonymous with market euphoria and bubbles. But is this tale all it's cracked up to be?
Who's up for a story?
\U0001f447\U0001f447\U0001f447 pic.twitter.com/cvYHoTZgdf
That was Lindy Effect 101. I hope you found it useful.
And special thank you to my friend @GavinBaker for the thread idea!
1/ An Allegory of Finance
— Sahil Bloom (@SahilBloom) July 18, 2020
I have been posting a lot of educational (and humorous!) threads on finance, money, and economics.
My mission is simple: to demystify these concepts and make them accessible to everyone.
All of the threads can be found below. Enjoy and please share!
More from Sahil Bloom
10 threads to accelerate your career:
How to Win (without talent or luck)
20+ principles compiled from the most impressive leaders and thinkers in the world.
20 Ways to Stand Out in a Hiring Process (that don’t involve your resume)
You can stand out without fancy degrees or credentials—learn how.
Common Interview Questions (& how to nail them)
Interviews suck—proper preparation makes them suck slightly less.
How to Write Cold Emails (or DMs)
Because one lucky break can make all the difference…
How to Win (without talent or luck)
20+ principles compiled from the most impressive leaders and thinkers in the world.
How to Win (without talent or luck):
— Sahil Bloom (@SahilBloom) October 16, 2021
20 Ways to Stand Out in a Hiring Process (that don’t involve your resume)
You can stand out without fancy degrees or credentials—learn how.
The hiring process is ultra-competitive.
— Sahil Bloom (@SahilBloom) May 31, 2021
But you\u2019ve incorrectly been told that the only way to stand out is by having fancy degrees and credentials.
THREAD: 20 ways to stand out in a hiring process (that don\u2019t involve your resume):
Common Interview Questions (& how to nail them)
Interviews suck—proper preparation makes them suck slightly less.
The interview process is ultra-competitive.
— Sahil Bloom (@SahilBloom) August 7, 2021
But with proper preparation, it is possible to stand out.
THREAD: 20 common interview questions, what they really mean, and how to nail them:
How to Write Cold Emails (or DMs)
Because one lucky break can make all the difference…
One cold email can change your life.
— Sahil Bloom (@SahilBloom) October 24, 2021
Here's how to write a great one:
Short Squeeze 101
If you follow financial markets (or if you watch Billions), you've heard the phrase "short squeeze" used quite frequently.
But what is a "short squeeze" and how does it work?
Here's Short Squeeze 101!
👇👇👇
1/ First, the basics.
The "short" in "short squeeze" refers to the concept of short selling.
The basics are covered in my thread below.
https://t.co/xecJYNCxMs
TL;DR - short selling is a way of betting against a stock - i.e. betting that its price will decline.
2/ "Short interest" is a measure of how heavily an asset is shorted by the market.
It is the total number of shares that have been sold short (borrowed and sold), but have not yet been covered (bought and returned).
It is usually measured as a % of the # of shares outstanding.
3/ A "short squeeze" occurs when a heavily-shorted asset experiences a rapid upward price movement.
When this happens, short sellers may be forced to close their short positions (i.e. buy the stock and return it to the broker), further accelerating the upward price movement.
4/ Let's look at a simple example to show this in action.
We will use Tesla, one of the most heavily-shorted stocks in the world.
Imagine the stock price is $1,000 per share. This seems crazy. Ricky Rational decides to short the stock at this level.
If you follow financial markets (or if you watch Billions), you've heard the phrase "short squeeze" used quite frequently.
But what is a "short squeeze" and how does it work?
Here's Short Squeeze 101!
👇👇👇
1/ First, the basics.
The "short" in "short squeeze" refers to the concept of short selling.
The basics are covered in my thread below.
https://t.co/xecJYNCxMs
TL;DR - short selling is a way of betting against a stock - i.e. betting that its price will decline.
1/ Short Selling 101
— Sahil Bloom (@SahilBloom) July 6, 2020
With the markets continuing to rally, there has been more talk of \u201cshorting\u201d or \u201cshort selling\u201d stocks.
But what does that mean and how does it work?
Here\u2019s a quick educational primer: Short Selling 101 pic.twitter.com/JTrJmuY7fI
2/ "Short interest" is a measure of how heavily an asset is shorted by the market.
It is the total number of shares that have been sold short (borrowed and sold), but have not yet been covered (bought and returned).
It is usually measured as a % of the # of shares outstanding.
3/ A "short squeeze" occurs when a heavily-shorted asset experiences a rapid upward price movement.
When this happens, short sellers may be forced to close their short positions (i.e. buy the stock and return it to the broker), further accelerating the upward price movement.
4/ Let's look at a simple example to show this in action.
We will use Tesla, one of the most heavily-shorted stocks in the world.
Imagine the stock price is $1,000 per share. This seems crazy. Ricky Rational decides to short the stock at this level.
More from Crypto
0/ The Great Crypto Reversal
Key difference between the '17 and roaring 20s in crypto is that back then everyone was aping a16z and Naval.
Today everyone apes 3AC wanting to be the next Degen.
'17 was an idealistic *saving the world* kind of thing
20s is *me against the world*
1/ The financialization of crypto means more volatility but pretty long ascend to the top.
Multi-year bull and an ATH surprising even to the biggest bulls as the infinite Cantillon "wealth" is pumped into crypto
Crypto becomes the ultimate Cantillon insider circle-jerk.
2/ This will be one the most iconic ideological reversals in history, comparable to Google who was firmly against advertising but turned into the most powerful ad company ever.
3/ This scenario reminds me of the 90s privatization period in the post-socialist countries.
The regime transition allowed the communist party elite to benefit from the wild west form of "capitalism" that ensued, transferring (and multiplying) their wealth into the new regime.
4/ We are far from Satoshi's original vision . But words and intentions of *prophets* were used to manipulate and corrupt all throughout human history and this time it is no
Key difference between the '17 and roaring 20s in crypto is that back then everyone was aping a16z and Naval.
Today everyone apes 3AC wanting to be the next Degen.
'17 was an idealistic *saving the world* kind of thing
20s is *me against the world*
1/ The financialization of crypto means more volatility but pretty long ascend to the top.
Multi-year bull and an ATH surprising even to the biggest bulls as the infinite Cantillon "wealth" is pumped into crypto
Crypto becomes the ultimate Cantillon insider circle-jerk.
2/ This will be one the most iconic ideological reversals in history, comparable to Google who was firmly against advertising but turned into the most powerful ad company ever.
3/ This scenario reminds me of the 90s privatization period in the post-socialist countries.
The regime transition allowed the communist party elite to benefit from the wild west form of "capitalism" that ensued, transferring (and multiplying) their wealth into the new regime.
4/ We are far from Satoshi's original vision . But words and intentions of *prophets* were used to manipulate and corrupt all throughout human history and this time it is no
At "forever" Cantillon insiders are infinitely wealthy. Everybody else lives in pods & eats what the livestock eats, or joins the harem or household staff of an infinitaire.
— Nick Szabo (@NickSzabo4) January 21, 2020
