Where to begin! Every administration change comes with it a slew of updated policies, orders, and plans... but this week was exceptionally volatile.

If you're anything like me, you may have found this week to be overwhelming and a bit (a lot) anxiety-inducing. If you're anything like the people I've been polling all week, you may have decided to shut out most of the news to protect your own sanity, regardless of your political views. Information overload + an inability to detect truth from fiction is a hard line to walk.

I get it, I really do.

That said, change is always one of the scariest aspects of life. Pretending the changes aren't happening or denying their impact based on headlines you've come across is not the best way to move forward in this new world.

Here are a few of the changes I'll be discussing today:

1. The Attention Economy Update, it's no longer just monetized through advertising 👀

2. $TRUMP - the memecoin that netted Donald Trump, the president of the United States, up to $72 Billion in three days (on paper);

3. The TikTok Ban/Unban, and why this is actually more concerning than you may realize;

4. The Mediation of Algorithmic Communications - aka, the people/companies between you and the people you're talking to... and how that distorts reality;

5. The value of Truth - how echo chambers & reality tunnels are changing more subtly than you may think.

I'll touch briefly on each of these issues and thread them together in a way that demonstrates both my concern & my excitement for these upcoming months. We live in a quantum world - a both/and rather than an either/or world. We don't need to feel just one emotion about the changes that are coming. It's okay to feel multiple emotions at once 😌

Let's dive in ✨

Welcome to Recalibrating! My name is Callum (@_wanderloots)

Join me as I learn to better life in every way possible, reflecting and recalibrating along the way to keep from getting too lost.

Thanks for sharing the journey with me ✨

Over the last few entries, we touched on my experience with monetizing YouTube and my philosophy that has been developing as a result of it (bringing in a lot of Stoicism).

This week, I'm going to continue the discussion related to entries 30-36 (an overview of which can be found here), which discussed the attention economy, the future of social media, and the impact that cryptography has on the current and future Internet.

I'm going to share the flow of thoughts I had this week, linking them together to illustrate the progression of some potentially confusing/concerning events (that are more connected than they appear). Then I'll go into the specifics of each element so that you can more deeply understand its relative impact from a technical & practical standpoint on your own life, rather than merely what the inflammatory headlines may suggest.

My hope is that this letter causes you to second guess the information you consume on social media so you can hone your critical thinking skills to assess "reality" in the age of AI. This skill is becoming more important than ever, as the lines between social media & politics are blurred to the point of indistinguishability.

We're living in a new era of the attention economy. If society continues to thoughtlessly spend attention without developing awareness of how algorithms influence our lives, we will devolve into a world where no one's reality aligns.

That's a scary thought, especially considering the market impacts we've seen and the wealth distribution at play here.

I don't think anything will ever be the same again.

The biggest shock I experienced this last week, BY FAR, was the launch of $TRUMP. The dollar sign indicates a ticker, much like it does with the stock market, but in this case, it indicates a TOKEN.

This particular token is known as a "memecoin", which is a sort of derivative cryptocurrency that resides on a blockchain like Ethereum or in this case, Solana. It's called a memecoin because, typically, the image or name of the token is related to a meme. The token packages the "meme", turning it into an economic coin that can be bought and sold. Kind of like turning pepe, the Arthur fist, or the "it's fine dog" (the most relevant at the moment lol) into a trading card.

In this case, the fully diluted valuation of the $TRUMP token soared to $72 Billion in three days 🤯. For context, that value is potentially enough to buy TikTok 👀

*Note: Fully Diluted Valuation (FDV) does not mean that Trump earned $72 Billion. For an explanation on how these tokenomics (token + economics) work, I recommend this article on the actual value of $TRUMP and how it will be vested in the future.

You might be wondering: Why would anyone buy this digital "trading card"? 🤔 Well, buying the card, the token, the memecoin, gives you the right to sell it. That's it. For some people, that's enough. For others, they will never sell, because the token becomes a collectible. This is the distinction between investors (traders) and collectors.

Again, tokens are, in some ways similar to a stock (though they are also very different in other ways we won't get into at the moment). So if the price goes up and you sell it for more than you bought it, you gain a profit. If the price goes down and you sell it for less than you bought it, you lose money.

If you put $trump in those terms, memecoins/tokens are easier to understand, even if the technology is confusing & changing constantly.

But where does the money come from? Tokens (typically) have a fixed supply. If there are 10 tokens created and they sell out, and an 11th person wants to buy it, one of the 10 can sell the token for more than they bought. It's classic Supply & Demand in economics.

If there are 10 tokens and 1000 people want to buy them, well, that gives a lot more power to the 10 token holders to sell the token for the best price they can get. If one of the 1000 buys it, they can immediately list it for 10x the value and hope someone else will buy it, since there's still demand.

Effectively, the price is determined by the amount of attention given to it. If a memecoin goes viral and 100 million people are interested in buying a 1000 token supply, the price will skyrocket in a hyped moment.

Stocks are a bit different in that there are underlying assets associated with the stock (the company & its profits). That said, market perception & mass psychology still has a huge impact in stock valuation (have you heard of wallstreetbets and gamestop?).

The attention economy is typically valued based on advertising - the more eyeballs on a product/service, the more money it is worth because there is a greater volume of "conversions". Conversion rate is a percentage of views that result in a purchase of the product/service. The more eyes, the more conversions, the more money is made. This business model has been powering all major social media platforms, search engines, newspapers & blogs, for a very long time.

Memecoins take this attention economy to the next level by providing an instant economic value to a viral moment, packaged in the form of a token.

This economic element, on its own, is not a bad thing. To each their own on how they want to spend/burn money 🤷‍♂️. People gamble. People buy stocks. People invest in private companies. People buy collectibles and try to flip them for a profit. Welcome to capitalism.

The mere presence of economics is not a bad thing, though we tend to villainize people for trying to make money online (which always confuses me given the capitalistic nature of our entire society 🤔). Monetization of the Internet in a safe, consistent, & equitable manner is actually a core element of what web3 tries to bring to the Internet.

The creators of the original Internet have said that they regret not building a monetization layer into it because of what ended up filling that void: advertising via social media, aka web2. Social media recognized the need for monetization of attention and created platforms that facilitated the budding attention economy.

As Jaron Lanier, The author of who owns the future? Argued, “the whole business of using advertising to fund communication on the Internet is inherently self-destructive. If you have universal backlinks, you have a basis for micro payments from somebody’s information that’s useful to somebody else” but a system of two-way links and micro payments would required some central coordination and made it hard for the web to spread wildly, so Burners-Lee resisted the idea. - The Innovators p 393

These companies (Meta, X (formerly twitter), TikTok, Reddit, etc.) all rely on advertising (attention) to pay the bills, and generally do not transfer their take rates (ad earnings) to the creators that power the platforms in any meaningful way 😢. YouTube is BY FAR the best social media platform for creators (in web2), giving ~ 55% of ad earnings to creators. Instagram gives effectively 0%. In contrast, decentralized social media (DeSo) like Farcaster enable almost 100% of earnings to go to creators, but we're not getting into DeSo today.

Economics aside, the more concerning aspect here comes down to the question: if major economics of online media are monetized via attention... who controls the attention?

The large number of people in the world now get their information & news from a single source: social media.

But social media platforms do not supply this media themselves. Instead, they aggregate content from other providers in the form of screenshots & links (aka posts) that display headlines & hook-optimized formatting to grab your attention.

With millions (maybe billions) of posts created every day, how are these platforms supposed to know what to show you? How do they control the supply?

Answer: Algorithms.

People generate data that is fed to the algorithm. This data is a result of spending attention, both active & inactive. They actively pay attention in a few ways: likes, comments, saves, and shares. However, it's the inactive way that matters more: watch time.

The passive consumption of content on social media platforms is completely tracked. Every single action you do on social media creates data that is fed to the algorithms. The algorithms of each platform take all of this data into account and select what information to feed you each day. Literally - it's called a feed for a reason.

But who do you think controls the algorithms?

Platforms often say it's a black box, or that algorithms are mysterious, or that they don't have direct "control" over the algorithms. While that may be true in a literal sense, in a practical sense, it is not.

What controls the algorithms? The incentives that the platforms establish.

Social media companies are moneymaking machines. Meta, for example, has a market cap of $1.6 Trillion 🤯. In 2024, Meta earned $135 billion in revenue, with 99% coming from advertising.

The more watch time people give these companies, the more attention they spend, literally, converting to advertising revenue for the platforms the attention is spent on. There is a reason that these companies are referred to as "walled gardens"; if people leave one platform for another by, for example, following a link, the social media platform loses money.

Accordingly, they include incentive mechanisms in the algorithms to try their absolute best to keep you on their platform, rather than moving to a competitor's.

What this means is that the incentives at the core of social media (web2) are:

1. keep you hooked on their platform (attention grabbing methods that prevent you from leaving)

2. keep you on their platform for as long as possible (addictive, slot-machine based algorithms)

... that's pretty much it! As long as you're there watching content and spending attention on ads, their business model succeeds.

You may notice that the consumer is not a part of the incentive mechanism.. there's nothing about trying to make you "happy" or "not hopelessly addicted" or "reduce anxiety or depression", because these incentives would be counter to making money via mining attention.

We have moved beyond the intentional consumption of media to the age of mediated media. There is always someone (or something, in the form of an algorithm) between you and the people you engage with, the content you consume online. It's not just you and the person you're chatting with, there's always a third party listening in, trying to figure out how to keep you from ever leaving so they can make as much money as possible.

The most concerning part? These incentives are purely on the capitalistic side of profit maximization for shareholders of the social media companies, we haven't even touched on the dangers of bringing a third incentive mechanism into them: politics 👀.

People are addicted to social media, there's no question about it. We spend hours and hours scrolling each day, ruining our attention and often, in denial that it is happening. It's estimated by the inventor of the infinite scroll, Aza Raskin, (which autoloads another post when you read the "end" of the feed) that:

Every day, as a direct result of the infinite scroll, the combined total of 200,000 more human lifetimes is now spent scrolling on the screen, that would’ve otherwise been spent on some other activity

But there are other concerning elements aside from addiction:

1. decreasing attention, focus, & mental health; and

2. polarizing opinions (echo chambers)

There is a generally declining ability of our society to be able to focus deeply & at length. Social media algorithms are built on a "variable reward system". Every scroll produces a new opportunity to see "better content" than before, so we keep scrolling. This is the same mechanism that keeps people addicted to slot machines.

Algorithms have learned that the shorter the attention span needed before a scroll, the better. No algorithm has done this better than TikTok.

TikTok produced the ultimate algorithm of addicting content, exploding in western society during the pandemic. People get sucked into TikTok and don't leave for hours. It was so successful that Instagram modified their algorithm via reels to try and mimic their success.

Social slot machine algorithm

But this isn't the worst of it. As these algorithms learned how to perfectly hook people with content that keeps them on the platform, they learned to apply additional features to deepen their relationship with the platform: confirmation bias & outrage.

They constructed echo chambers.

An echo chamber is what it sounds like, an enclosed space where you hear echos. In practice, that means a place where you hear your own opinions reflected back at you.

In social media, this means that your algorithmic feed shows you things you already believe in, because it makes humans feel better when they get told they're right. It slots you into a chamber filled with others who think & act the same as you. You can see the result in the image above, with separate networks created for red and blue.

Unfortunately, this segregation is hugely dangerous, as echo chambers produce alternate realities between people, even between people whose lives are identical in every other way. Geographically, economically, racially, etc.

Once the algorithms "know you", they know what to show you that will you keep you there. Their next goal is to get you to engage more & longer. The best way to do this is through conflict.

Negative news sparks more engagement and spreads faster than positive news. People are much more likely to comment and keep up with news that is geared towards outrage. Outrage is often triggered when information goes against your beliefs.

So, the algorithms figure out what you like (confirmation bias) to slot you into an echo chamber, and then trigger outrage by showing things that you disagree with, commentary from people you agree with that discusses topics you don't. This brief commentary is usually done through short snippets (< 30 s videos) & headlines.

Unfortunately, most issues are not black and white, either/or. We live in a quantum world, one where two things can be true at the same time - both/and world. But that is not the way algorithms present information.

When we solely read headlines or take interviews & information out of context in short social media snippets, we lose the nuance of the issues.

With our declining attention, we don't have the capacity (or motivation) to dive into the nuance of the issues.

We're left with the polarization every issue, despite the fact that many people would otherwise have been closer to agreeing than disagreeing; people are sorted into a me vs you, an us vs them mentality.

The line is drawn, and people dig their feet in, entrenching themselves in their beliefs.

Algorithms end up determining what we believe by slowly manipulating our emotions, stoking anger and soothing satisfaction, subtly controlling our emotions related to topics that are far too complex to ever be understood through social media snippets.

But wait, weren't we talking about memes and memecoins? That got dark fast...

Well, they're related!

In 2016, politics blended with social media in ways never seen before, actively leveraging the data produced by social media companies (ahem, facebook...) to target political advertisements at swing voters in swing states. I'm not going to get into the details here, but I wrote an article in 2017 on how & why it happened.

The crux is that politics blended with media in a way that had never been seen before: completely customized information generating individual user realities.

The echo chamber data accumulated by the social media algorithms are able to identify what will push your buttons in the right ways. Kind of like a puppet master pulling the strings on a marionette.

In contrast, in the past, everyone received their news via broadcast format: television or newspapers. Sure, different papers & channels were politically biased, that's not new or a problem. You could self-select the media you consumed based on your political views, rather than having someone (or something) select it for you.

But the key here is that everyone saw the same news. It was broadcast to all in the same way. CNN, NBC, FOX, etc., all channels were available to everyone, even if you chose to watch one over the other.

Social media is different. It's on an entirely other level in that what I see in my feed is different from what you see in your feed, and I have NO idea what you're seeing. We're not only in our own echo chambers, we're also in individualized reality tunnels. My world does not seem to be the same as your world.

Politics has always polarized people, but social media exacerbates the scale, depth, & speed.

Our attention is being leveraged by different parties, often without our awareness, to polarize our views more than ever before. The attention economy provides a mechanism to monetize this polarized attention through advertising. $TRUMP is just the latest mechanism of monetizing this leveraged attention.

Note: I am not saying that one party over the other is correct here, as they both use social media tactics. I am merely pointing out the ways in which media & politics have changed, forever, as a result of social media. Being aware of what is being used to manipulate you can help you make informed decisions, rather than reacting to overhyped, politically charged media fed to you by an algorithm.

Now we have to ask ourselves: what are the motivations of the people running the companies whose algorithms control our echo chambers & subsequent reality tunnels?

$TRUMP became so hyped because it was posted on Truth Social, Trump's own social media platform he created when he was kicked off of twitter for spreading false information.

He announced the token on Truth Social first, giving his audience the opportunity to buy the token at the lowest price, before news of the token reached the masses.

The attention garnered by the token was isolated to a specific echo chamber, one under the control of the President, enabling a smaller subset of people to potentially profit off the token before everyone else.

When the news hit the rest of the Internet, it skyrocketed, boosting the value to ~$70 up from ~ $6 at launch. That's an 1100%+ increase in 2 days 🤯. The price pumped by virtue of the President's influence and careful marketing.

I came across many people on X claiming to have made millions or hundreds of millions of dollars as a result of this virality. I haven't checked the wallet addresses of the token transactions yet, but as a benefit of operating on blockchain, all of these statistics are publicly available (though of course, people can spread transactions across multiple wallets, making it hard to determine aggregate data).

Then, $Melania launched 2 days after the launch of $Trump, causing the price of $Trump to plummet. Who do you think lost out on this "dump"? Likely not the early adopters who bought in at $6 via Truth Social, but the people who bought later when the price was at $30+, trying to FOMO into the speculative token hype.

The point is that Trump leveraged the attention of his upcoming inauguration to launch a token that, on paper, netted him up to $72 billion at one point (though his tokens have not divested so he cannot claim the money yet).

The memecoin was able to encapsulate, or package, the value of that attention in this viral moment, allowing many people within Trump's echo chamber to profit off of the hype. Then, the hype died down. This pattern follows the classic Gartner Hype Cycle:

In other words, the power of a billionaire + social media was able to manipulate the market of a specific attention economic scenario to massively profit, at the expense of many other people (though, to be fair, many others made lots of money).

Should billionaires have this power? Should governments? 👀

Elon Musk, Mark Zuckerberg, Jeff Bezos, Larry Ellison, Tim Cook... the list goes on of the people who were at Trump's inauguration. These people own, collectively, around $1 Trillion and many of whom run major companies out of the United States.

Musk & Zuckerberg run Meta (FB, WhatsApp, & Instagram) and X, respectively. Musk has clearly thrown 100% support to Trump, and Zuckerberg has been rapidly changing policies to keep up:
"Mark Zuckerberg, who earlier this month announced Meta was to get rid of factcheckers and "dramatically reduce the amount of censorship" on its platforms"

The overlap between political influence & social media organization and operation is blurring more and more as regulations shift or are removed entirely.

In latest news, TikTok was banned and unbanned within the same day, which is confusing since Trump was the one who originally started the banning process a few years ago 🤔. My belief, as joked about on SNL, is that:
"Johnson, as Trump, said: “We love TikTok. We used to hate it, but then it, quite frankly, in many ways, got me elected.”"

I think that the Trump Team realized the power of mediated communication, of algorithmically developed reality tunnels that can control the dissemination of information in ways that have not been seen before. Accordingly, Trump has been encouraging Larry Ellison of Oracle (the 4th richest man in the world) to buy TikTok and split it 50/50 with US government control.

What a scary thought, imo! TikTok is already a place that destroys attention, decreases mental health, and slots people in echo chambers better (worse?🤔) than any other technology humanity has ever created.

Imagine if it were in the control of the Government 😱, an organization meant to be separate from the market itself. Imagine if that sheer volume of data was used to perfectly slot people in their relative political stances to distribute information determined by a government actor.

Imagine if memecoins were launched regularly as a way to generate massive wealth for individuals of influence, but the information was ONLY given to select people, as determined by social media data, allowing some portions of the population to profit while others remain ignorant.

It's effectively a form of insider trading, when people operate on information not made available to the public. I am sure (though I do not have specific evidence) that the people who knew $Melania was dropping at the all time high of $Trump knew that a price drop was likely, and were able to sell their $Trump tokens before the crash and rebuy once it did (or even short it and then rebuy, earning on the down and the up).

This manipulation is what happens when the people who regulate the markets can buy the markets they regulate (which is often considered a conflict of interest in many industries, preventing people from profiting off of stocks based on private information).

Imagine if the power of TikTok was used to facilitate this market manipulation in the US and globally. I do not expect wealth distribution to improve with this type of system, consolidating wealth and power with fewer people who get the "insider" information.

Truth is becoming more relative than ever, as people entrench further into their beliefs, fuelled by confirmation bias and motivated by outrage.

Social media algorithms feed people into echo chambers, often determined by soundbytes, short clips of audio/video from longer form content like podcasts. Users then shift from social media to the longer form content that already aligns with their worldviews, such as podcasts.

Podcasting had a huge impact on the 2024 US election because it enabled people to cement their echo chambers with long form content that comes across as more credible than short form content, regardless of whether the information is true or false. This issue is exacerbated in that podcasters can generate audiences based on personality, rather than credibility. This is the same with most of the attention economy, but with the number of hours spent listening to podcasters, they tend to have a deeper impact on their audiences (again, which can be good or bad depending on the quality & credibility of the podcasters).

The truth is that many people do not care what is real or not. They become accustomed to their echo chamber & reality tunnel, confirming their bias, without looking to the other side to see how their reality fits in with the rest of the world.

Unfortunately, this lack of care for truth is becoming even more problematic in the age of AI, where truth & fiction are indistinguishable from one another.

Now is not the time to entrench in beliefs based on headlines & unvalidated, uncorroborated information. Now is the time to develop critical thinking skills to assess both sides of every argument and let the facts determine reality, rather than opinion.

I'm working on expanding my YouTube channel to include more commentary on current events & new tools that are changing the way we interact with the Internet & the world at large. I recommend checking out my channel for updates 👀

For upcoming newsletters, I'm reflecting more on the changes to the attention economy and the future of what it means to be human 🤔

Stay tuned ✨

P.S. if you found this newsletter valuable, please consider subscribing & sharing with a friend. Word of mouth is by far the best way for me to grow and your support helps fund my ability to continue researching and writing these newsletters 🫡

Where to begin! Every administration change comes with it a slew of updated policies, orders, and plans... but this week was exceptionally volatile.

If you're anything like me, you may have found this week to be overwhelming and a bit (a lot) anxiety-inducing. If you're anything like the people I've been polling all week, you may have decided to shut out most of the news to protect your own sanity, regardless of your political views. Information overload + an inability to detect truth from fiction is a hard line to walk.

I get it, I really do.

That said, change is always one of the scariest aspects of life. Pretending the changes aren't happening or denying their impact based on headlines you've come across is not the best way to move forward in this new world.

Here are a few of the changes I'll be discussing today:

1. The Attention Economy Update, it's no longer just monetized through advertising 👀

2. $TRUMP - the memecoin that netted Donald Trump, the president of the United States, up to $72 Billion in three days (on paper);

3. The TikTok Ban/Unban, and why this is actually more concerning than you may realize;

4. The Mediation of Algorithmic Communications - aka, the people/companies between you and the people you're talking to... and how that distorts reality;

5. The value of Truth - how echo chambers & reality tunnels are changing more subtly than you may think.

I'll touch briefly on each of these issues and thread them together in a way that demonstrates both my concern & my excitement for these upcoming months. We live in a quantum world - a both/and rather than an either/or world. We don't need to feel just one emotion about the changes that are coming. It's okay to feel multiple emotions at once 😌

Let's dive in ✨

Welcome to Recalibrating! My name is Callum (@_wanderloots)

Join me as I learn to better life in every way possible, reflecting and recalibrating along the way to keep from getting too lost.

Thanks for sharing the journey with me ✨

Over the last few entries, we touched on my experience with monetizing YouTube and my philosophy that has been developing as a result of it (bringing in a lot of Stoicism).

This week, I'm going to continue the discussion related to entries 30-36 (an overview of which can be found here), which discussed the attention economy, the future of social media, and the impact that cryptography has on the current and future Internet.

I'm going to share the flow of thoughts I had this week, linking them together to illustrate the progression of some potentially confusing/concerning events (that are more connected than they appear). Then I'll go into the specifics of each element so that you can more deeply understand its relative impact from a technical & practical standpoint on your own life, rather than merely what the inflammatory headlines may suggest.

My hope is that this letter causes you to second guess the information you consume on social media so you can hone your critical thinking skills to assess "reality" in the age of AI. This skill is becoming more important than ever, as the lines between social media & politics are blurred to the point of indistinguishability.

We're living in a new era of the attention economy. If society continues to thoughtlessly spend attention without developing awareness of how algorithms influence our lives, we will devolve into a world where no one's reality aligns.

That's a scary thought, especially considering the market impacts we've seen and the wealth distribution at play here.

I don't think anything will ever be the same again.

The biggest shock I experienced this last week, BY FAR, was the launch of $TRUMP. The dollar sign indicates a ticker, much like it does with the stock market, but in this case, it indicates a TOKEN.

This particular token is known as a "memecoin", which is a sort of derivative cryptocurrency that resides on a blockchain like Ethereum or in this case, Solana. It's called a memecoin because, typically, the image or name of the token is related to a meme. The token packages the "meme", turning it into an economic coin that can be bought and sold. Kind of like turning pepe, the Arthur fist, or the "it's fine dog" (the most relevant at the moment lol) into a trading card.

In this case, the fully diluted valuation of the $TRUMP token soared to $72 Billion in three days 🤯. For context, that value is potentially enough to buy TikTok 👀

*Note: Fully Diluted Valuation (FDV) does not mean that Trump earned $72 Billion. For an explanation on how these tokenomics (token + economics) work, I recommend this article on the actual value of $TRUMP and how it will be vested in the future.

You might be wondering: Why would anyone buy this digital "trading card"? 🤔 Well, buying the card, the token, the memecoin, gives you the right to sell it. That's it. For some people, that's enough. For others, they will never sell, because the token becomes a collectible. This is the distinction between investors (traders) and collectors.

Again, tokens are, in some ways similar to a stock (though they are also very different in other ways we won't get into at the moment). So if the price goes up and you sell it for more than you bought it, you gain a profit. If the price goes down and you sell it for less than you bought it, you lose money.

If you put $trump in those terms, memecoins/tokens are easier to understand, even if the technology is confusing & changing constantly.

But where does the money come from? Tokens (typically) have a fixed supply. If there are 10 tokens created and they sell out, and an 11th person wants to buy it, one of the 10 can sell the token for more than they bought. It's classic Supply & Demand in economics.

If there are 10 tokens and 1000 people want to buy them, well, that gives a lot more power to the 10 token holders to sell the token for the best price they can get. If one of the 1000 buys it, they can immediately list it for 10x the value and hope someone else will buy it, since there's still demand.

Effectively, the price is determined by the amount of attention given to it. If a memecoin goes viral and 100 million people are interested in buying a 1000 token supply, the price will skyrocket in a hyped moment.

Stocks are a bit different in that there are underlying assets associated with the stock (the company & its profits). That said, market perception & mass psychology still has a huge impact in stock valuation (have you heard of wallstreetbets and gamestop?).

The attention economy is typically valued based on advertising - the more eyeballs on a product/service, the more money it is worth because there is a greater volume of "conversions". Conversion rate is a percentage of views that result in a purchase of the product/service. The more eyes, the more conversions, the more money is made. This business model has been powering all major social media platforms, search engines, newspapers & blogs, for a very long time.

Memecoins take this attention economy to the next level by providing an instant economic value to a viral moment, packaged in the form of a token.

This economic element, on its own, is not a bad thing. To each their own on how they want to spend/burn money 🤷‍♂️. People gamble. People buy stocks. People invest in private companies. People buy collectibles and try to flip them for a profit. Welcome to capitalism.

The mere presence of economics is not a bad thing, though we tend to villainize people for trying to make money online (which always confuses me given the capitalistic nature of our entire society 🤔). Monetization of the Internet in a safe, consistent, & equitable manner is actually a core element of what web3 tries to bring to the Internet.

The creators of the original Internet have said that they regret not building a monetization layer into it because of what ended up filling that void: advertising via social media, aka web2. Social media recognized the need for monetization of attention and created platforms that facilitated the budding attention economy.

As Jaron Lanier, The author of who owns the future? Argued, “the whole business of using advertising to fund communication on the Internet is inherently self-destructive. If you have universal backlinks, you have a basis for micro payments from somebody’s information that’s useful to somebody else” but a system of two-way links and micro payments would required some central coordination and made it hard for the web to spread wildly, so Burners-Lee resisted the idea. - The Innovators p 393

These companies (Meta, X (formerly twitter), TikTok, Reddit, etc.) all rely on advertising (attention) to pay the bills, and generally do not transfer their take rates (ad earnings) to the creators that power the platforms in any meaningful way 😢. YouTube is BY FAR the best social media platform for creators (in web2), giving ~ 55% of ad earnings to creators. Instagram gives effectively 0%. In contrast, decentralized social media (DeSo) like Farcaster enable almost 100% of earnings to go to creators, but we're not getting into DeSo today.

Economics aside, the more concerning aspect here comes down to the question: if major economics of online media are monetized via attention... who controls the attention?

The large number of people in the world now get their information & news from a single source: social media.

But social media platforms do not supply this media themselves. Instead, they aggregate content from other providers in the form of screenshots & links (aka posts) that display headlines & hook-optimized formatting to grab your attention.

With millions (maybe billions) of posts created every day, how are these platforms supposed to know what to show you? How do they control the supply?

Answer: Algorithms.

People generate data that is fed to the algorithm. This data is a result of spending attention, both active & inactive. They actively pay attention in a few ways: likes, comments, saves, and shares. However, it's the inactive way that matters more: watch time.

The passive consumption of content on social media platforms is completely tracked. Every single action you do on social media creates data that is fed to the algorithms. The algorithms of each platform take all of this data into account and select what information to feed you each day. Literally - it's called a feed for a reason.

But who do you think controls the algorithms?

Platforms often say it's a black box, or that algorithms are mysterious, or that they don't have direct "control" over the algorithms. While that may be true in a literal sense, in a practical sense, it is not.

What controls the algorithms? The incentives that the platforms establish.

Social media companies are moneymaking machines. Meta, for example, has a market cap of $1.6 Trillion 🤯. In 2024, Meta earned $135 billion in revenue, with 99% coming from advertising.

The more watch time people give these companies, the more attention they spend, literally, converting to advertising revenue for the platforms the attention is spent on. There is a reason that these companies are referred to as "walled gardens"; if people leave one platform for another by, for example, following a link, the social media platform loses money.

Accordingly, they include incentive mechanisms in the algorithms to try their absolute best to keep you on their platform, rather than moving to a competitor's.

What this means is that the incentives at the core of social media (web2) are:

1. keep you hooked on their platform (attention grabbing methods that prevent you from leaving)

2. keep you on their platform for as long as possible (addictive, slot-machine based algorithms)

... that's pretty much it! As long as you're there watching content and spending attention on ads, their business model succeeds.

You may notice that the consumer is not a part of the incentive mechanism.. there's nothing about trying to make you "happy" or "not hopelessly addicted" or "reduce anxiety or depression", because these incentives would be counter to making money via mining attention.

We have moved beyond the intentional consumption of media to the age of mediated media. There is always someone (or something, in the form of an algorithm) between you and the people you engage with, the content you consume online. It's not just you and the person you're chatting with, there's always a third party listening in, trying to figure out how to keep you from ever leaving so they can make as much money as possible.

The most concerning part? These incentives are purely on the capitalistic side of profit maximization for shareholders of the social media companies, we haven't even touched on the dangers of bringing a third incentive mechanism into them: politics 👀.

People are addicted to social media, there's no question about it. We spend hours and hours scrolling each day, ruining our attention and often, in denial that it is happening. It's estimated by the inventor of the infinite scroll, Aza Raskin, (which autoloads another post when you read the "end" of the feed) that:

Every day, as a direct result of the infinite scroll, the combined total of 200,000 more human lifetimes is now spent scrolling on the screen, that would’ve otherwise been spent on some other activity

But there are other concerning elements aside from addiction:

1. decreasing attention, focus, & mental health; and

2. polarizing opinions (echo chambers)

There is a generally declining ability of our society to be able to focus deeply & at length. Social media algorithms are built on a "variable reward system". Every scroll produces a new opportunity to see "better content" than before, so we keep scrolling. This is the same mechanism that keeps people addicted to slot machines.

Algorithms have learned that the shorter the attention span needed before a scroll, the better. No algorithm has done this better than TikTok.

TikTok produced the ultimate algorithm of addicting content, exploding in western society during the pandemic. People get sucked into TikTok and don't leave for hours. It was so successful that Instagram modified their algorithm via reels to try and mimic their success.

Social slot machine algorithm

But this isn't the worst of it. As these algorithms learned how to perfectly hook people with content that keeps them on the platform, they learned to apply additional features to deepen their relationship with the platform: confirmation bias & outrage.

They constructed echo chambers.

An echo chamber is what it sounds like, an enclosed space where you hear echos. In practice, that means a place where you hear your own opinions reflected back at you.

In social media, this means that your algorithmic feed shows you things you already believe in, because it makes humans feel better when they get told they're right. It slots you into a chamber filled with others who think & act the same as you. You can see the result in the image above, with separate networks created for red and blue.

Unfortunately, this segregation is hugely dangerous, as echo chambers produce alternate realities between people, even between people whose lives are identical in every other way. Geographically, economically, racially, etc.

Once the algorithms "know you", they know what to show you that will you keep you there. Their next goal is to get you to engage more & longer. The best way to do this is through conflict.

Negative news sparks more engagement and spreads faster than positive news. People are much more likely to comment and keep up with news that is geared towards outrage. Outrage is often triggered when information goes against your beliefs.

So, the algorithms figure out what you like (confirmation bias) to slot you into an echo chamber, and then trigger outrage by showing things that you disagree with, commentary from people you agree with that discusses topics you don't. This brief commentary is usually done through short snippets (< 30 s videos) & headlines.

Unfortunately, most issues are not black and white, either/or. We live in a quantum world, one where two things can be true at the same time - both/and world. But that is not the way algorithms present information.

When we solely read headlines or take interviews & information out of context in short social media snippets, we lose the nuance of the issues.

With our declining attention, we don't have the capacity (or motivation) to dive into the nuance of the issues.

We're left with the polarization every issue, despite the fact that many people would otherwise have been closer to agreeing than disagreeing; people are sorted into a me vs you, an us vs them mentality.

The line is drawn, and people dig their feet in, entrenching themselves in their beliefs.

Algorithms end up determining what we believe by slowly manipulating our emotions, stoking anger and soothing satisfaction, subtly controlling our emotions related to topics that are far too complex to ever be understood through social media snippets.

But wait, weren't we talking about memes and memecoins? That got dark fast...

Well, they're related!

In 2016, politics blended with social media in ways never seen before, actively leveraging the data produced by social media companies (ahem, facebook...) to target political advertisements at swing voters in swing states. I'm not going to get into the details here, but I wrote an article in 2017 on how & why it happened.

The crux is that politics blended with media in a way that had never been seen before: completely customized information generating individual user realities.

The echo chamber data accumulated by the social media algorithms are able to identify what will push your buttons in the right ways. Kind of like a puppet master pulling the strings on a marionette.

In contrast, in the past, everyone received their news via broadcast format: television or newspapers. Sure, different papers & channels were politically biased, that's not new or a problem. You could self-select the media you consumed based on your political views, rather than having someone (or something) select it for you.

But the key here is that everyone saw the same news. It was broadcast to all in the same way. CNN, NBC, FOX, etc., all channels were available to everyone, even if you chose to watch one over the other.

Social media is different. It's on an entirely other level in that what I see in my feed is different from what you see in your feed, and I have NO idea what you're seeing. We're not only in our own echo chambers, we're also in individualized reality tunnels. My world does not seem to be the same as your world.

Politics has always polarized people, but social media exacerbates the scale, depth, & speed.

Our attention is being leveraged by different parties, often without our awareness, to polarize our views more than ever before. The attention economy provides a mechanism to monetize this polarized attention through advertising. $TRUMP is just the latest mechanism of monetizing this leveraged attention.

Note: I am not saying that one party over the other is correct here, as they both use social media tactics. I am merely pointing out the ways in which media & politics have changed, forever, as a result of social media. Being aware of what is being used to manipulate you can help you make informed decisions, rather than reacting to overhyped, politically charged media fed to you by an algorithm.

Now we have to ask ourselves: what are the motivations of the people running the companies whose algorithms control our echo chambers & subsequent reality tunnels?

$TRUMP became so hyped because it was posted on Truth Social, Trump's own social media platform he created when he was kicked off of twitter for spreading false information.

He announced the token on Truth Social first, giving his audience the opportunity to buy the token at the lowest price, before news of the token reached the masses.

The attention garnered by the token was isolated to a specific echo chamber, one under the control of the President, enabling a smaller subset of people to potentially profit off the token before everyone else.

When the news hit the rest of the Internet, it skyrocketed, boosting the value to ~$70 up from ~ $6 at launch. That's an 1100%+ increase in 2 days 🤯. The price pumped by virtue of the President's influence and careful marketing.

I came across many people on X claiming to have made millions or hundreds of millions of dollars as a result of this virality. I haven't checked the wallet addresses of the token transactions yet, but as a benefit of operating on blockchain, all of these statistics are publicly available (though of course, people can spread transactions across multiple wallets, making it hard to determine aggregate data).

Then, $Melania launched 2 days after the launch of $Trump, causing the price of $Trump to plummet. Who do you think lost out on this "dump"? Likely not the early adopters who bought in at $6 via Truth Social, but the people who bought later when the price was at $30+, trying to FOMO into the speculative token hype.

The point is that Trump leveraged the attention of his upcoming inauguration to launch a token that, on paper, netted him up to $72 billion at one point (though his tokens have not divested so he cannot claim the money yet).

The memecoin was able to encapsulate, or package, the value of that attention in this viral moment, allowing many people within Trump's echo chamber to profit off of the hype. Then, the hype died down. This pattern follows the classic Gartner Hype Cycle:

In other words, the power of a billionaire + social media was able to manipulate the market of a specific attention economic scenario to massively profit, at the expense of many other people (though, to be fair, many others made lots of money).

Should billionaires have this power? Should governments? 👀

Elon Musk, Mark Zuckerberg, Jeff Bezos, Larry Ellison, Tim Cook... the list goes on of the people who were at Trump's inauguration. These people own, collectively, around $1 Trillion and many of whom run major companies out of the United States.

Musk & Zuckerberg run Meta (FB, WhatsApp, & Instagram) and X, respectively. Musk has clearly thrown 100% support to Trump, and Zuckerberg has been rapidly changing policies to keep up:
"Mark Zuckerberg, who earlier this month announced Meta was to get rid of factcheckers and "dramatically reduce the amount of censorship" on its platforms"

The overlap between political influence & social media organization and operation is blurring more and more as regulations shift or are removed entirely.

In latest news, TikTok was banned and unbanned within the same day, which is confusing since Trump was the one who originally started the banning process a few years ago 🤔. My belief, as joked about on SNL, is that:
"Johnson, as Trump, said: “We love TikTok. We used to hate it, but then it, quite frankly, in many ways, got me elected.”"

I think that the Trump Team realized the power of mediated communication, of algorithmically developed reality tunnels that can control the dissemination of information in ways that have not been seen before. Accordingly, Trump has been encouraging Larry Ellison of Oracle (the 4th richest man in the world) to buy TikTok and split it 50/50 with US government control.

What a scary thought, imo! TikTok is already a place that destroys attention, decreases mental health, and slots people in echo chambers better (worse?🤔) than any other technology humanity has ever created.

Imagine if it were in the control of the Government 😱, an organization meant to be separate from the market itself. Imagine if that sheer volume of data was used to perfectly slot people in their relative political stances to distribute information determined by a government actor.

Imagine if memecoins were launched regularly as a way to generate massive wealth for individuals of influence, but the information was ONLY given to select people, as determined by social media data, allowing some portions of the population to profit while others remain ignorant.

It's effectively a form of insider trading, when people operate on information not made available to the public. I am sure (though I do not have specific evidence) that the people who knew $Melania was dropping at the all time high of $Trump knew that a price drop was likely, and were able to sell their $Trump tokens before the crash and rebuy once it did (or even short it and then rebuy, earning on the down and the up).

This manipulation is what happens when the people who regulate the markets can buy the markets they regulate (which is often considered a conflict of interest in many industries, preventing people from profiting off of stocks based on private information).

Imagine if the power of TikTok was used to facilitate this market manipulation in the US and globally. I do not expect wealth distribution to improve with this type of system, consolidating wealth and power with fewer people who get the "insider" information.

Truth is becoming more relative than ever, as people entrench further into their beliefs, fuelled by confirmation bias and motivated by outrage.

Social media algorithms feed people into echo chambers, often determined by soundbytes, short clips of audio/video from longer form content like podcasts. Users then shift from social media to the longer form content that already aligns with their worldviews, such as podcasts.

Podcasting had a huge impact on the 2024 US election because it enabled people to cement their echo chambers with long form content that comes across as more credible than short form content, regardless of whether the information is true or false. This issue is exacerbated in that podcasters can generate audiences based on personality, rather than credibility. This is the same with most of the attention economy, but with the number of hours spent listening to podcasters, they tend to have a deeper impact on their audiences (again, which can be good or bad depending on the quality & credibility of the podcasters).

The truth is that many people do not care what is real or not. They become accustomed to their echo chamber & reality tunnel, confirming their bias, without looking to the other side to see how their reality fits in with the rest of the world.

Unfortunately, this lack of care for truth is becoming even more problematic in the age of AI, where truth & fiction are indistinguishable from one another.

Now is not the time to entrench in beliefs based on headlines & unvalidated, uncorroborated information. Now is the time to develop critical thinking skills to assess both sides of every argument and let the facts determine reality, rather than opinion.

I'm working on expanding my YouTube channel to include more commentary on current events & new tools that are changing the way we interact with the Internet & the world at large. I recommend checking out my channel for updates 👀

For upcoming newsletters, I'm reflecting more on the changes to the attention economy and the future of what it means to be human 🤔

Stay tuned ✨

P.S. if you found this newsletter valuable, please consider subscribing & sharing with a friend. Word of mouth is by far the best way for me to grow and your support helps fund my ability to continue researching and writing these newsletters 🫡