The Breakdown - Why Elon Musk Should Airdrop a New Twittercoin to Every User

Episode Date: May 2, 2022

This episode is sponsored by Nexo.io, NEAR and FTX US.  Today on “Long Reads Sunday,” NLW reads Balaji Srinivasan’s “The Elondrop.”  - Nexo is a secure crypto exchange and crypto lending platform. Buy 40+ hot coins with your bank card in seconds and swap between exclusive pairs for cashback. Earn up to 17% interest on your idle crypto assets and borrow against them for instant liquidity. Simple and secure. Head over to nexo.io and get started now.  - NEAR is a blockchain for a world reimagined. Through simple, secure, and scalable technology, NEAR empowers millions to invent and explore new experiences. Business, creativity, and community are being reimagined for a more sustainable and inclusive future. Find out more at NEAR.org. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - Consensus 2022, the industry’s most influential event, is happening June 9–12 in Austin, Texas. If you’re looking to immerse yourself in the fast-moving world of crypto, Web 3 and NFTs, this is the festival experience for you. Use code BREAKDOWN to get 15% off your pass at www.coindesk.com/consensus2022. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell, research by Scott Hill and additional production support by Eleanor Pahl. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsors is “Catnip” by Famous Cats and “I Don't Know How To Explain It” by Aaron Sprinkle. Image credit: Scott Olson/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8. 

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by nexus.io, near NFTX, and produced and distributed by CoinDesk. What's going on, guys? It is Sunday, May 1st. Happy May Day. Welcome to a new month. And of course, as with every Sunday, it is time for your long read. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or come join us on the Discord. It's where we chat about all of

these big ideas, and I would love to see you there. You can find a link in the show notes or go to bit.com slash breakdown pod. Also at disclosure, as always, in addition to them being a sponsor of the show, I also work with FTX. So, this week had a lot of big things happen in our industry. However, It's hard to argue that anything other than one thing was the dominant business story of this week. And I'm talking, of course, about Elon buying Twitter. His offer, which had happened last week, was accepted, and everyone all week has been debating about what will happen next, what he should do, and adding their voice to that conversation is none other than Balaji Shrinivasan.

At this point, Balaji needs no introduction. He's been a guest on the show before. is a frequent writer. He takes a way-out view of the world, and I love it any time he decides to write basically anything. This week, he wrote the Elon drop, build the political support necessary to free Twitter with the largest air drop in history. It's pretty spicy, as I think you'll agree. The deal may have been signed, but the campaign is just beginning. Elon should go over the heads of the establishment to offer all Twitter users a deal. Every account, account worldwide gains full control over their username in a crypto wallet plus a share of

Twitter's new coin if they can help him get the requisite legal clearance in their jurisdictions and the acquisition goes through. This brings most of the 217 million Twitter users, including the 179 million who are non-American, into the fight on Elon's side. In the meantime, he's not sitting around until October 24th waiting for approval. Instead, he set up a parallel site where users can log in with Twitter to vote for the Elon drop. That login mechanism serves as a rough voter registration step, and the group who thereby votes for Elon serves as a worldwide constituency, one he can point to each day as evidence of his growing grassroots support. In short, Elon runs the first truly global political campaign, gaining an

activist following in every country, incentivizing people and policymakers alike to align with Elon for global freedom and prosperity. Any establishment attempt to oppose this will be seen for what it is. A ploy to digitally disenfranchise the users of Twitter, to stop them from gaining a share of the wealth they've created, to take away the following they've built,

to buttress an illegitimate regime that survives only by silencing its subjects. Elon thus takes a position of total moral authority. He proposes to give billions to millions, to give voices to the masses, to decentralize Twitter to its users, to turn it into the protocol it was always meant to be. And if he doesn't do this,

the American authorities may just take it all away. Problem. Elon can't win a game of intra-American politics. The greatest strength is to know one's own weakness. And Elon, despite being the richest man in the world, despite having millions of Americans on his side, despite having gotten Twitter to sign on the line which is dotted, Elon still doesn't quite have the coalition he needs to win, if he fights this in an intra-American political battle.

Because we already see a swarming, gathering horde that's going to spend every minute of the next few months trying to torpedo the deal. By dint of what he is and who he is, Twitter and Elon have become the current thing, that which the establishment's malign attention is focused on. Could they cut off Twitter from the internet? Ask the FCC to intervene?

Get Twitter employees to leak? accuse him of bad behavior, claim he's violating a non-disparagement clause? Recall that all the stocks Elon possesses are held in U.S. databases. All his companies are subject to U.S. law, and most of his employees are based in the U.S. Anything and everything will be tried because the American establishment rightly senses they won't win a game of free speech and free markets anymore. After all, until social media, most people did not have practical freedom of speech. Only the owners of media corporations and their employees did, giving anyone the ability to be a publisher or writer, has undermined their cartel. Technology checks their privilege, and so the empire has struck back.

For some random Indian or Nigerian or Midwesterner or Middle Easterner, to have a voice comparable to a U.S. quote-unquote journalist is an intolerable affront. And it is those users to whom Elon should appeal these new voices. Not just the silenced Americans who can't topple this tyranny on their own, but the silent supermajority, the one 179 million monetizable daily active users of Twitter who are not American, who have no vote in U.S. elections, yet whose speech is nevertheless subject to the dictate of a U.S. corporation. In other words, Elon can't win if this is a U.S. only fight. He needs to go global. Looking for ways to step up your crypto game? Then go with NXO. For starters, you get free

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layer one blockchain platform. NIR is a blockchain for a world reimagined. Through simple, secure, and scalable technology, NIR empowers millions to invent and explore new experiences. Business, creativity, and community are being reimagined for a more sustainable and inclusive future. Reimagined your world today at NIR.org. The breakdown is sponsored by FTXUS. FDXUS is the safe, regulated way to buy and sell Bitcoin and other digital assets, with up to 85% lower fees than competitors.

There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees. One of the largest exchanges in the U.S. FDXUS is also the only leading exchange that supports both Ethereum and Solana NFTs. When you trade NFTs on FTCS, you pay no gas fees. Download the FTCX app today and use referral code Breakdown to support the show. Solution. Elon can win a game of global technology. It took $44 billion to acquire Twitter the company, that was only step one. Elon now needs to acquire Twitter's users. And that's going to require massive amounts of political capital, not just financial capital. Where is he going to get it?

Twitter today is just a collection of quarreling accounts. Users aren't aligned around anything except their desire for more followers. Some are for free speech, some are against it, and many just don't care. The promise of a coin changes all of that. Suddenly, every user has a rooting interest for the Elon drop. A decentralized Twitter could easily be as valuable as Ethereum's 300 because Twitter already has a massive internal digital economy. A Twitter coin that's served as a native payment for ads and digital goods on the platform would do well. And it could be used to pay for a priority inbox, pay more to get to the top of someone's DMs, where the recipient can keep the funds or donate to charity. The experience of BNB shows that the applications of a new

coin are limitless. The tokenomics of this project are the relatively easy part. So let's assume Twitter coin can hit Ethereum's market cap, divided by 217 million Twitter users, 350 billion nets out to more than $1,500 per person. That is real money, even in America, and especially in the rest of the world. And most of Twitter is the rest of the world. Non-American users constitute a full 82% of Twitter, 179 million of the 217 million monetizable daily active users. In fact, as there are only 38 million American Twitter users in total, worldwide users, constitute at least 56% of Elon's 87.5 million strong follower base, and probably much more than that. In other words, Elon's following is already global. Moreover, those global users might be coming

for the coin, but they'd be staying for the freedom. While the implementation can vary, one way of doing the Elon drop is to allow every unique user to get a crypto wallet with not just their Twitter coins, but the keys to their username. The latter would be an ENS-style NFT, a portable identity they could use to log in to any site going forward, without any prospect of revocation by Twitter. In other words, an end to recourseless deplatforming. So, that's how the global users gain freedom is in free speech and prosperity as in free money from the Elon drop. But what can those global users do to make the Elon drop happen? Well, they can log in with Twitter at his parallel site and vote for the AirDrop. They can increment a provable counter. Every

single day another million people verifiably voting in favor of freedom and prosperity. They can use their voices to argue against any attempt to quash the deal or silence them. Voices that have never been heard in unison before. Voices that will shake the walls of the establishment. They can sign up millions of new Twitter users, users who also come for the coin and stay for the freedom. And, most importantly, they give us all a batna, a best alternative to a negotiated agreement. In the event the deal doesn't go through, Elon now has tens of millions of signups at his

new site that can bootstrap any new Twitter competitor he sets up. The global users are, in short, the tide-turning wave of reinforcements that freedom-loving Americans need in this social war. Ethics. The imperative of internationalization. Why is it morally, economically, and politically necessary for Elon to tap into those 179 million global swing votes with an Elon drop? It's morally necessary because American corporations exert influence abroad on people who have no say in American elections. decentralizing Twitter into a Web3 protocol where users own their own private keys changes the leverage of the situation. Granting individuals' true digital property rights over their accounts turns them from

serfs at the mercy of American corporate feudalists into self-sovereign actors in their own right. That's not only more just, but more profitable for both parties, because serfs can't invest in their land, but free people can. Given just how much time and energy is spent by millions of people on these digital plots of land, this may be an unlock on par with Deng's reforms. It's economically necessary because you don't spend $44 billion without setting a few expectations. While Elon has said that he isn't buying Twitter for the money and I fully believe him, the debt service alone on this deal reportedly exceeds Twitter's annual revenue.

It's been true for some time that Twitter has not been a cash cow, and its role in the public conversation is disproportional to its revenue. But that's different than being a money pit. Perhaps it can be run as a break-even in perpetuity. But to achieve a return, it wouldn't be enough for Elon to simply fight spam. The Elon drop gives a path to $100 billion and beyond, numbers that haven't been posted in 10 years of Twitter's existence as a public company. Finally, it's politically necessary because in 2022, any centralized control over speech will eventually buckle to the wokes in the West or the nationalists in China, simply because these are the strongest factions in their respective jurisdictions. That's why two of the greatest founders of all time, Jack Dorsey and Jack Ma, had to yield against their will.

But going global and decentralized changes this. Elon has tens of millions of swing votes just over the rainbow. People who don't want to be dominated by either the Americans or the Chinese. Netizens who genuinely want neutral global rule of law. Twitter users who'd love to get an Elon drop for their efforts and true control over their accounts. Recall that Ben Franklin allied with the French to defeat the British because he recognized how weak the fledgling American Revolution was. Elon should likewise recognize that silenced Americans were defeated for a reason.

They are poorer and weaker than the regime. The new money of tech on its own similarly doesn't have any roots in the country to beat the U.S. establishment, as the city of San Francisco demonstrates. But if Elon combines new money with silenced Americans and the global silent majority of Twitter users,

if he decentralizes Twitter back to the people and gives them a fair share of the value they created, then he has a coalition that can win. All right, back to NLW now. I will say first that I basically don't care what one thinks about the specifics of the argument. you really have to love biology for bringing up ideas that are so at once conceivable, but also so outside the norms and mainstream of what anyone else is talking about,

that it actually shifts the discussion window almost entirely. One of the things that's happening that's fascinating with Twitter is that one of the ways to read what might happen next is as a battle between Web 2 norms and Web3 ideals. And I do mean ideals because functionally Web 3 is still being born. I've talked numerous times on this show about how I do not believe that Web3 ideals alone are a sufficient way to overcome the network effects of Web2 platforms. The model that Bologi is describing doesn't need Web 3 to overcome the network effects of Web 2.

It just transforms Web 2 into Web 3. The global dimension of this is fascinating. So much of the conversation around free speech and deep platforming and all of these sort of things is so inherently America-centric that creating a mechanism to give voice. voice to folks could be pretty powerful indeed. Anyway, I'm going to stop here, but I want to see what you guys think about this. Come join the Breakers Discord. This is your sign from the universe. This is the time. This is the type of stuff to discuss there. Maybe we can figure out how we go support this Elon drop idea, huh? For now, I just want to say thanks again to my sponsors, nexo.io. A big welcome

to NIR as a new sponsor, NFTX. And of course, a big thanks to you guys for listening. Until tomorrow, be and take care of each other. Peace. Hey, breakdown listeners. Come join CoinDesk's Consensus 2020, the festival for the decentralized world this June 9th through the 12th in Austin, Texas. This is the only festival showcasing

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