Don’t dismiss Bitcoin just because of its wild price swings

There are valid reasons to criticize Bitcoin, but price volatility is not one of them. 

Why does the price of Bitcoin change so much from day to day? The answer is simple: the value of Bitcoin derives almost entirely from speculation on future adoption of Bitcoin rather than practical use. Bitcoin speculators are betting on the likelihood that Bitcoin will become offers a credible alternative to fiat paper money or commodities like gold.

No one knows the future, so many individual market participants speculate about the future using the information available to them. They will naturally disagree and change their opinions over time as new knowledge becomes available.  Good and bad news such as statements by governments, thefts from exchanges, or new startup ventures provide new information about the future and so influence the price.  Traders also react to the predictions of other traders. This is how price discovery works in any market. Those who make successful predictions earlier and more often will accumulate more Bitcoin, thus rewarding those with the best judgment. 

If you think that the Bitcoin trading is driven by too much hype, consider that the world’s economy currently hangs on the rants of President Trump’s reactions to the latest Fox News broadcast, and how the Federal Reserve reads the tea leaves of the market this week.

By contrast, crypto traders are ultimately responding to the long term success or failure of the Bitcoin ecosystem. This process of information discovery is always messy, but it is not any more arbitrary than the fake drama of the political news cycle.

Many critics of Bitcoin consider the fact that Bitcoin is a speculative asset as sufficient reason to dismiss it. But all entrepreneurial initiatives are speculative at the start. Bitcoin is like any early-stage startup. One investor claims a 10% stake for $1 million for a valuation $10 million, while a later round might value a $10% stake at $100 million. As a startup proves that its technology and businesses model is sound, and begins to make profits, it’s market cap grows. As profit transitions from potentiality to an actuality, the market capitalization becomes more stable. We are seeing a similar process with Bitcoin, except its ambition and potential is far larger than a startup, so the process takes far longer.   

Bitcoin will achieve price stability when a large portion of Bitcoin’s market cap is used for practical purposes rather than speculation. The practical value of Bitcoin is as a means of exchange and store of value.  

Can we track the adoption of Bitcoin as practical money? Yes. When Bitcoin was invented, only a few highly technical users had the skill to make Bitcoin transactions. Over the last 10 years, the cryptocurrency ecosystem has grown and evolved. Bitcoin is now easier to use, safer to store, and the number of businesses who accept it is in the tens of thousands.

Still, in all but a few narrow use cases, it is still more convenient to use more traditional payment networks. That’s normal — monopolies are broken not by assaulting their business model head-on, but within narrow edge cases where it is easier to build a superior alternative. In the case of Bitcoin, it is already a viable option for cross-border money transfers from nations with currency controls, trade in black and grey market goods, funding of politically incorrect institutions, and of course, criminal operations. In developed countries with robust financial networks, Bitcoin is only used by its most devoted followers, as the traditional financial system is still far easier to use.

That doesn’t mean that we will not see a sudden and unpredictable shift in which Bitcoin suddenly overtakes traditional financial networks. The Western banking system suffers from major and intractable structural faults and is ripe for disruption.  By contrast, here is a single Bitcoin transaction worth $670 million dollars with a total fee of $7.82.  Imagine how much more effort and due diligence a banking transaction of this size would take. A transaction to buy your morning coffee with Bitcoin comes with the same level of security.

We’ve seen how countries like China evolved from a cash-only society to one entirely dominated by mobile payment apps for practically all applications in just a few years.  With Whole Foods, Home Depot, and other major stores now accepting Bitcoin, virtually all millennials using smartphones, and growing instability in the global fiat money regime, the currency marketplace could be ready for disruption. Or not. The “flippening” between the dollar and Bitcoin could be decades away. The point is that there is nothing fundamentally wrong with speculating on the possibility of a Bitcoin-based economy and global monetary standard if you believe (as I do) that the technology is fundamentally sound and capable of evolving to handle the business of 7 billion people.

Why does the price of Bitcoin change so much from day to day? The answer is simple: the value of Bitcoin derives almost entirely from speculation on future adoption of Bitcoin rather than practical use. Bitcoin speculators are betting on the likelihood that Bitcoin will become offers a credible alternative to fiat paper money or commodities like gold.

No one knows the future, so many individual market participants speculate about the future using the information available to them. They will naturally disagree and change their opinions over time as new knowledge becomes available.  Good and bad news such as statements by governments, thefts from exchanges, or new startup ventures provide new information about the future and so influence the price.  Traders also react to the predictions of other traders. This is how price discovery works in any market. Those who make successful predictions earlier and more often will accumulate more Bitcoin, thus rewarding those with the best judgment.

If you think that the Bitcoin trading is driven by too much hype, consider that the world’s economy currently hangs on the rants of President Trump’s reactions to the latest Fox News broadcast, and how the Federal Reserve reads the tea leaves of the market this week.

By contrast, crypto traders are ultimately responding to the long term success or failure of the Bitcoin ecosystem. This process of information discovery is always messy, but it is not any more arbitrary than the fake drama of the political news cycle.

Many critics of Bitcoin consider the fact that Bitcoin is a speculative asset as sufficient reason to dismiss it. But all entrepreneurial initiatives are speculative at the start. Bitcoin is like any early-stage startup. One investor claims a 10% stake for $1 million for a valuation $10 million, while a later round might value a $10% stake at $100 million. As a startup proves that its technology and businesses model is sound, and begins to make profits, it’s market cap grows. As profit transitions from potentiality to an actuality, the market capitalization becomes more stable. We are seeing a similar process with Bitcoin, except its ambition and potential is far larger than a startup, so the process takes far longer.

Bitcoin will achieve price stability when a large portion of Bitcoin’s market cap is used for practical purposes rather than speculation. The practical value if Bitcoin’s is as a means of exchange and store of value.

Can we track the adoption of Bitcoin as practical money? Yes. When Bitcoin was invented, only a few highly technical users had the skill to make Bitcoin transactions. Over the last 10 years, the cryptocurrency ecosystem has grown and evolved. Bitcoin is now easier to use, safer to store, and the number of businesses who accept it is in the tens of thousands.

Still, in all but a few narrow use cases, it is still more convenient to use more traditional payment networks. That’s normal — monopolies are broken not by assaulting their business model head-on, but within narrow edge cases where it is easier to build a superior alternative. In the case of Bitcoin, it is already a viable option for cross-border money transfers from nations with currency controls, trade in black and grey market goods, funding of politically incorrect institutions, and of course, criminal operations. In developed countries with robust financial networks, Bitcoin is only used by its most devoted followers, as the traditional financial system is still far easier to use.

That doesn’t mean that we will not see a sudden and unpredictable shift in which Bitcoin suddenly overtakes traditional financial networks. The Western banking system suffers from major and intractable structural faults and is ripe for disruption.  Here is a single Bitcoin transaction worth $670 million dollars with a total fee of $7.82.

Imagine how much more effort and due diligence a banking transaction of this size would take. A transaction to buy your morning coffee with Bitcoin comes with the same level of security.

We’ve seen how countries like China evolved from a cash-only society to one entirely dominated by mobile payment apps for practically all applications in just a few years.

With Whole Foods, Home Depot, and other major stores now accepting Bitcoin, virtually all millennial using smartphones, and growing instability in the global fiat money regime, and the currency marketplace could be ready for disruption. Or not. The “flippening” between the dollar and Bitcoin could be decades away. The point is that there is nothing fundamentally wrong with speculating on the possibility of a Bitcoin-based economy and global monetary standard if you believe (as I do) that the technology is fundamentally sound and capable of evolving to handle the business of 7 billion people.

Why I try to ignore the news cycle and focus on my own success first

The idea that the public should be well-informed about local, regional, national, and global events is misguided and harmful.

It stems from the fact that in a democracy, every citizen can theoretically influence events on a global scale through the vote. The implication of this is that every citizen is ethically obligated to stay informed on the issues in order to make informed votes.

However, this standard is both impossible and harmful. The vast majority of people are busy with their personal lives and must already consume and process a huge amount of information to stay competitive in the modern world. It is impossible for non-intellectuals to keep up.

The impossible standard of the “informed citizen” leads to constant disillusionment of intellectuals with the public. The result is a perceived gulf between the “educated” intellectual elite and the “ignorant” working masses, who the elite feels must be ruled for their own good through a mythology of invented, ever-escalating crises, posed by as immigrants, rogue nations, abortion doctors, greedy landlords, corrupt CEOs, etc.

It is impossible for the average citizen to make a truly informed decision about a single local candidate, the interaction of national candidates with complex issues.

During the last election cycle, I met a fellow dad in the park who gave me an election flier, as he was running for a position as a local judge. I went to the link on his flier and tried to make a list of pros and cons.

Pro: he’s a nice guy, friendly and doting dad. Con: he’s a Democrat, along with all the other bad positions Democrats hold. Pro: he is a fellow secular Jew, which means we probably share views on many issues. Con: he’s a secular Jew, which means that he probably supports “social justice” and many other things I oppose.

I don’t remember the specific stances on his election site, but after reviewing them, I still felt completely unqualified to support or oppose his candidacy.

I am aware of my own ignorance and know that no matter how much attention I paid to the news, I could not even make an informed decision about a single local election, much less state or national roles. I had a long list of reasons why Trump and Hillary would both be terrible presidents, but ultimately, I could only make a wild guess about which one would be worse.

It’s impossible to make informed votes in a political system where the elected representatives have arbitrary power to disregard constitutional principles and the rule of law after they are in office.

Politics is impossibly complicated, and a distraction from the ongoing task of being successful in life. It’s intentionally addictive, as politicians compete to invent new and more urgent emergencies to grab the public’s attention. Politicians and the intellectual elite work with the media to manipulate the news cycle to direct attention to their pet issues, so that all news becomes politically radicalized. I have noticed how people who become immersed in the game of political theatre can hardly focus on the difficult job of reaching their own goals and maintaining the events that affect their own lives in context to political alarmism. It’s much easier to blame their failures on their preferred political scapegoats.

This is not to say that I advocate complete ignorance of politics. I believe in certain civic responsibilities — not because I live in a certain country, but simply from a selfish desire for a better life for myself and those I care for. Among these, is the duty to assist in emergencies, to testify against criminals, to serve on a jury when asked, and to speak on behalf of principles which make our civilization possible and denounce those who erode it.

I follow and engage in political causes only where basic social principles are at stake. For example, I believe that everyone who values American values, civilization, and just law ought to denounce the vicious campaign against immigrants.

Aside from such cases, I believe that unless politics is your career or primary hobby, you should ignore the news cycle to the maximum extent practicable in your life, and instead focus on being educated in areas relevant to the success of your personal projects.

How I found the ONE trick to lose belly fat overnight

About three years ago, I decided to reach an ambitious financial goal, that would put me in the top 5% of my peers. I engaged in a deep dive of personal finance, which led me to reject the conventional wisdom about career, savings, and investing. I developed new principles, achieved financial success, and moved my retirement date forward by several decades.

Two months ago, I became aware that though I was only slightly overweight, as I got older, my weight was having a detrimental effect on my health in many ways. I decided to engage in a similar process to lose weight.

I already knew that the conventional wisdom of a low-fat diet and more exercise was wrong, but as I dived into the topic of weight loss, what I learned transformed my approach. I’m still learning more every day, but here is the gist of what I found:

The most common explanations for why 70% of Americans are overweight are wrong. Obesity is not caused by eating too much or exercising too little, but by a hormonal imbalance in the body. The human body has a “set body weight” which it maintains through hormonal feedback systems. Inactivity and overeating is the result of obesity, not the cause. This is why diets which focus on eating less and moving more almost always fail — as has been proven by numerous studies. Unfortunately, the lure of hundreds of billions in agricultural subsidies has maintained a false theory of obesity despite 50 years of negative evidence.

The ultimate biological cause of obesity is a hormonal imbalance caused by insulin resistance. Insulin resistance is caused by persistently high levels of sugar in the blood. High sugar levels come from frequent carbohydrate-heavy meals. Cheap and plentiful processed carbohydrates from corn and wheat are the result of agricultural subsidies, which were passed to support the false hypothesis that obesity is caused by excess fat consumption.

Insulin resistance is the cause of fat accumulation. Insulin is a hormone which enables all cells to use and store sugar in the blood. Insulin is essential for the body, but persistently high levels of insulin cause resistance and fat accumulation. Fat storage is thus hormonally mediated. Attempts to lose or gain weight by calorie regulation below the set weight inevitably fail long term because the body compensates in myriad ways:

The body will respond to decreasing fat stores by increasing appetite, reducing satiety, lowering the metabolic rate, decreasing body temperature, and many other ways.
Long term weight control can only be achieved by understanding and addressing the causal factors – the hormones that regulate weight – especially insulin and leptin. This is why people who address weight by regulating calories suffer from a life-long rollercoaster or weight loss and regain. Lack of activity and larger meals is the outcome of obesity, not its cause.

More fundamentally, obesity is caused by dysfunctional emotion-handling skills. Carbohydrates are a highly effective and pleasurable endorphin activator. Like alcohol, tobacco, or heroin, carbs help addicts with chronic stress, anxiety, and depression — which are all common in the developed world. Carbohydrate addicts treat emotional instability with food in the same way as any other substance abuser.

Humans have evolved satiety mechanisms in response to fat and protein consumption (leptin is released to signal satiety). But like alcohol or cocaine, humans have no evolved satiety mechanism for carbs, which causes chronic overeating.

Understanding that carbohydrate consumption is an addictive relationship is essential to effective weight loss. Telling an alcoholic to consume less alcohol does not work because any amount of alcohol reinforces the addition. For the same reason, eliminating all processed carbohydrates from the diet is necessary for an effective dietary change.

Adopted sibling studies show that obesity is 70% genetically determined. I suspect that the specific trait is an inherited lack of emotion-management skills, which combined by super-availability of cheap carbohydrates is responsible for the modern obesity epidemic which affects 70% of Americans. Treatment of obesity requires addressing the need for emotional self-regulation and insulin resistance. Weight and fat loss will follow naturally as a result.

Exercise is effective for weight loss not because it burns fat or builds muscle (these effects are trivial and counteracted by the body in non-athletes), but because the endorphins produced during exercise reduce the emotional dependency on carbohydrates in food.

It is impossible to become fat from eating food — real food. Real food contains fats and proteins that trigger the body’s automatic satiety mechanisms. Obesity develops due to artificial food in the form of refined carbohydrate products. You can’t lose weight by eating MORE of anything. You must reduce the harmful effects of addictive carbohydrates.

The solution to obesity is to correct the hormonal imbalance by reducing insulin resistance. Insulin resistance can be reduced by creating periods of low blood sugar, specifically by eating a low carb diet, extending the periods between meals, such as by avoiding snacking and intermittent fasting.

Lowering insulin resistance will signal the body to automatically reduce fat stores, by increasing activity levels and correcting satiety levels. More activity and smaller meals are the *result* of fat loss, not the cause.

Finally, it is necessary to address the underlying emotional needs which cause carbohydrates addiction. Healthier substitutes such as walks, coffee, meditation, exercise, or just more sleep can reduce the dependency to derive endorphins from frequent carbohydrate consumption.

As I’ve discovered these ideas over the last month, I achieved dramatic success with my own health. I now have a healthy BMI for the first time in years and am rapidly moving towards my goal of 10% body fat without calorie restrictions or exercise. By switching to a low carb, high-fat diet and adding periods of intermittent fasting (a restricted daily eating window) I achieved a steady loss of 2.7 pounds per week.

Furthermore, I found that daily walks, coffee, and a concerted effort to get more sleep reduced my need to constantly snack to find emotional balance.

So, here is my one trick to lose belly fat overnight:

Extend your nighttime fasting period:
Don’t eat anything after eight pm or before noon. Have a glass of water with sea salt (to replenish electrolytes) before bed. Your body will use up the remaining sugar in the blood and enter fat-burning mode overnight, and you will pee out the ketones in the morning. Weigh yourself every morning to motivate yourself and track progress.

Is your “side hustle”​ holding back or advancing your career?

I encourage people to develop a “side hustle,” but they are not suitable for everyone, and many people get hustles that do more harm than good.

The proper function of a side hustle is not to earn a few extra dollars — it’s to grow your value proposition and train for a life of financial independence and entrepreneurship.

Many people get a side hustle that distracts rather than enhances their career. Driving Uber at night or hosting Airbnb guests every night is not going to enhance your career unless your dream is to be a chauffeur or enter the hospitality industry. Same with being a jack-of-all-trades who takes whatever job he comes across.

Is your side hustle causing you to sleepwalk through the workday or work on your gigs from the office? Are you spending more money on tools and supplies for each new gig that you bring in? Are you growing as a professional and building a sustainable, revenue stream with customers that come back to you, or are you doing random, one-off jobs, often for free? Are you giving up new projects at work, a promotion or a demanding new job for your side hustle? If so, it’s holding you back rather than helping you. You don’t need more spending money: you need to create opportunities for you to grow.

A good side hustle should help you to grow in your career or to explore a new one. You should come to the office excited to try out new ideas, not just tired from staying up all night working in an unrelated field. And if your idea is so great that you can’t perform your day job, don’t try to do both: quit and pursue it full time. You’ve saved up your reserve fund already, right?

How to make the most of the 2018 Google Ad Grants rule changes

ad-ban

Does that big red message look familiar? If your non-profit received a Google Ads Grant (if not, apply here), you may have noticed a major change in Google Ad Grants policy in 2018. Here is a summary of the new rules from Google, and here is a more comprehensive writeup. (Note: Neither list is perfectly accurate as these rules are not 100% enforced.) The bottom line with the 2018 rule changes is that you must have relevant, narrowly-targeted, high-performing ads with conversion tracking and relevant landing pages or your Google Grant account will be suspended. That’s the bad news. The good news is that Google removed the $2 bid limit, so you can bid more per click and compete for keywords that were previously off-limits. Below are some points for what I’ve learned for surviving and thriving with the new Google Ad Grant policy: The main success criteria for an Ad Grants account are:

  • High click-through rate – low (< 5%) CTR is the main reason accounts get suspended. If your account does not maintain a 5% rate for two months, you will get suspended. Loophole: AdWords Express accounts are exempt from this rule.
  • Low landing page bounce rate – visitors immediately navigating away from the ad page is another reason accounts get suspended.
  • A high percentage (75% is my goal) used of the monthly Grant budget.
  • Conversion tracking: clicks are a start, but you should also be tracking on-site conversions (i.e. leads and purchases). This is not just valuable to measure the effectiveness of your campaigns, but is now required by Google.

In the process of managing FEE’s $40,000/month account, we were suspended three times, and learned a lot about the new rules in the process. It is possible to maximize your spend, but the game is a lot harder, and you will have to put a lot more thought into the process. There are three strategies for being successful with a Grants account:

  1. Well defined audiences: this includes both narrowly targeted search keywords, demographic filters, and retarding (if possible)
  2. Relevant landing pages: landing pages should be specific to the search phrase and have enough information and call to action so that user can complete their search
  3. Enough campaigns targeting high-volume keywords with > 5% CTR to maximize the Grants budget. For example: with an average cost of $2/click, hitting 100% of a $10,000 budget requires 5,000 clicks*5%CTR = 100,000 searches, or 50 ad sets with 2,000 searches each. These are hypothetical numbers, but 50 campaigns targeting 100K searches seems like a reasonable target to hit a $10K budget. Here is FEE for comparison: about 40 campaigns, 272,000 searches, 22,563 clicks, $28,000/month current spend. That is: 8.3% CTR, $1.23 per click, 1092 leads generated, or $25 per lead.

The three key build-out steps you should take to implement to an effective Grants campaign are:

  1. Build customer personas: work with your team to build profiles of the demographics and interests, and potential search phrases
  2. Research search phrases: use the Google Keyword Planner, Moz Pro and other tools to find the intersection of
  3. high-volume search phrases
  4. suitable landing pages on your site
  5. low keyword difficulty
  6. Build out Ad campaigns: using the keywords and landing pages previous identified, build out

The following practices will be needed on an ongoing monthly basis: Review campaign performance, stop low-performing campaigns (important to prevent Grants account suspensions) and replace them with new ones. Campaigns may also experience fatigue for some phrases and require rotation.

  1. Research and recommend new landing pages to take advantage of target keywords
  2. Implement business goal tracking to optimize for lead generation and bounce rate/session duration in addition to click-through rates
  3. Review and implement with Google Ads feedback (Google provides ongoing feedback and optimization suggestions) and resolve account suspensions.

Finally: landing page considerations:You must have relevant landing pages with clear mission-specific, non-commercial content. One way I did this is by creating “essential guides” for the topics in various campaigns. Another strategy which works great for both organic and paid traffic is to compile pillar pages. Do not expect to be successful by sending all your paid clicks to your homepage. Google states that “your homepage and frequently visited web pages may not be used for Destination goal types” Requesting reactivation: Is your account suspended? Once you’ve complied with all rules above, request reactivation here.

If it’s not on your calendar, it’s not in your heart

When you have an important business meeting coming up, you put it on your calendar, right?

Why? Because putting things on your calendar prevents double-booked or forgotten plans.

What about your family? Are commitments made to your partner or kids less important than to your coworkers?

What about your commitments to yourself – your health, your education, your career development, etc.

Are you sabotaging your personal life because you subconsciously value your family — or yourself — as not deserving of the same commitment and undivided focus as you do your job?

If it’s worth doing, it’s worth doing well, which means making and keeping commitments.

If it’s not on your calendar, it’s not in your heart.

Why I prefer to live in a small apartment with a family of four

People are shocked when I tell them that prefer living in a one-bedroom, furniture-free apartment with my wife and two kids, even though I can pay cash for a McMansion or two in the ‘burbs. Why do most people need more space? 

Consider my closet: 
When I decide what to wear to work in the morning, every shirt in my closet is a good option. I’ve gotten rid of anything that for whatever reason is not a viable choice. Most people have filled the majority of their closets with clothes that don’t fit, aren’t stylish, too old, etc. My shirts are dividend into dress, casual, and workout shirts, and I can choose any shirt from each section without a second thought. 

By only keeping possessions that continue to add value to my life, I eliminate the physical, financial, and mental drag that comes along with keeping useless possessions. I apply this principle to every aspect of my life:

  • Toys: The toys that many parents choose for their kids reflect a fear of real life. Their toys represent, a safe, “nerfed” plastic version of adult responsibilities. Kids don’t need fake plastic houses, power tools, cooking appliances, cars, or phones because they don’t need to fake adult responsibilities: they can assume them one at a time. Our daughter got her first sharp knife and her kid-sized broom at three and helps out cleaning, preparing her lunch every day, makes her bed, etc.  She acquires adult tools and responsibilities as she becomes physically and mentally able. When she becomes an adult, she will have been doing adult responsibilities and using adult tools for decades. 
    Note: I’m not against toys, just toys which are “nerfed” versions of work that kids are capable of, or providing a plethora toys in an effort to isolate kids in a “play universe” which distracts them from assuming real responsibilities.  For example: A doll or construction blocks are productive toys, fake plastic eating utensils are generally not.
  • Professional projects: Is this project a success story I want to tell about my career? Does this contribute to the goals I set for this quarter?
    My digital data: I fit my life on a single SSD by using visualization and de-duplication tools to see the entire of my digital life and delete what I no longer need.
  • Relationships: Do you add value to my life now? If not, why am I spending my time on you?
  • Furniture: We only keep furniture that improves our lives. Some of our furniture, like our floor-seating dining time, is custom-made to fit our needs. We have no chairs or couch in our home because we decided that our health would be better if we let our bodies do the job of holding us up.
  • Finances: I can tell you how much assets or debt I have in each account, and how all of my investments are distributed. I avoid unnecessary financial commitments, combine/rollover my investments, and use a single app to visualize my entire financial life over my lifetime.
  • Daily time: I jealously guard the commitment and habits I make each day. I use five tools to visualize my the locations I visit, the software I use, and the websites I visit.
  • Television: I don’t watch TV (though I spend too much time on YouTube), but if you do, track and re-evaluate whether you can be doing something more valuable or rewarding with the time you spent on specific shows.
  • Social media use: I use HabitLab and Apple’s ScreenTime to set limits on how much time I spend on social media sites/apps.
    Old hobbies: most people have a bunch of junk from abandoned hobbies in their closets. Sell it and focus on what you do now.
    Books: I sold or gave away all my books and put everything on my Kindle when we moved to China. I have never thought “I wished I kept that book.” Unfortunately, I keep getting new free books – what can I do with used books in Atlanta?
  • Emotions: We carry emotional baggage in the associations between places, people and situations, and the ingrained emotional reactions they have developed habits around. Separate your rational-evaluative self from your reactive-habitual self and consider whether your emotional responses are productive for the situation you are in.
  • Insecurities: Over a lifetime, we accumulate fears and insecurities about problems we used to face and inadequacies we used to hold about ourselves. Focus on the person you are becoming, not who you were in the past.

And that’s why a small apartment works for us. An extra room (at this time) would only add unwanted and unnecessary costs and obligations: the cost of higher rent, the cost to clean it, and especially the daily mental overhead of keeping the room neat and organized, etc. To keep up with an entire house is an enormous responsibility. To whatever extent is possible to me, I want to limit every aspect of my life to the things that continue to give me value and lead me to become the person I want to be – not things that reflect who I was in the past.

How FEE is responding to Facebook’s algorithm changes

In January 2018, Facebook announced major changes to the algorithm which decides what stories appears in users News Feeds. These changes have substantially affected the visibility of content from online publishers on Facebook. While Facebook has always updated the algorithms behind the News Feed on a regular basis, the recent changes have dramatically affected the visibility of publishers with a substantial amount of visits from Facebook (such as FEE.org) and driven some of them bankrupt.

While part of the impetus for the changes is the “fake news” scandal, much of it has to do with the rise of “clickbait” publishers which profit from low-quality, sensational or salacious stories which get high visibility and are highly addictive but do not result in an enjoyable or informative experience overall. The battle between content discovery platforms (i.e. Facebook) and publishers who try to game the rules is currently playing out on Facebook just as it did on Google in the early 2010s.

Facebook’s 2017 – 2018 changes can be summarized as:

  1. The visibility of activity from friends and a user’s community is prioritized relative to online publishers. Also, content which sparks conversation and reactions from friends is prioritized.
  2. “High quality” stories are prioritized over “clickbait.” Quality stories include longer videos, comments, web pages with substantive content and other criteria.

(Source: Bufferapp.com)

Buffer has a detailed timeline and overview of these changes and a detailed analysis of the algorithm changes.

Many publishers who formerly received a large percentage of traffic from Facebook have seen significant drops in traffic. FEE was especially affected as we received nearly 43% of our traffic from Facebook in early 2017 and subsequently saw that drop to 23%.

Are these changes bad for publishers?

While sites like FEE.org have been somewhat unfairly punished as a publisher of “quality” content rather than “clickbait,” it is overly simplistic to see Facebook as the “bad guy” taking away traffic from publishers. Facebook has made a business decision to prioritize content from friends and family. They want to be a social network, not a news discovery platform. It is up to the market to decide whether Facebook becomes more or less valuable as a platform as a result.

Furthermore, in general, publishers of “quality” content will tend to compete in a meritocratic fashion with publishers for users’ organic reach. There are a lot of disclaimers here, but people generally accept that Google’s algorithm is mostly fair (and I believe it is) despite many claims of bias and ruined business models when Google had to adjust to “black-hat” SEO tactics. I believe that Facebook News Feed algorithms will probably come to be seen the same away some years from now.

The impact of social media on FEE.org

FEE.org saw substantial and highly volatile growth in social traffic starting in early 2016. This growth continued until late 2017 when it fell to 2015 levels. Facebook’s algorithm seems to have been responsible for nearly doubling social traffic, before falling back to the 2015 baseline. In other words, Facebook giveth and Facebook taketh away. FEE.org’s success with Facebook was largely due to its popularity with younger audiences that tended to push stories to go viral by repeated sharing. However, the “quality” of this engagement was low: for example, FEE.org’s bounce rate for Facebook referrals was 90%. As of October 2017, the bounce rate has been under 4%. It’s likely that many people who shared or liked our stories did not actually read them.

3-year sessions vs bounce rate for Facebook.com referrals:

(Note: The changes are not as stark as this graph shows due to measurement changes but the overall trend is valid.)

If we look at sessions which came from Facebook.com, we saw fee.org sessions grow from 159K in December 2015 to a peak of 386K in February 2016, before falling back under 100K in September 2017. We speculate that this drop is in part because Facebook lowered the value of sharing posts relative to the value of genuine reactions (likes/comments). (Note: Facebook implements strong and ever-adapting anti-cheat measures to ensure the integrity of “genuine” reactions.)

Traffic Notes:

  1. FEE.org saw a long-term lift of about 300K sessions per month from all sources from 2015 – 2018 — such as external referrals, organic search, and email.
  2. FEE.org traffic follows a strong seasonal pattern (much of our traffic is from students performing research during the school year).

Illustration: 3-year performance — social versus all traffic:

How FEE is Responding to Facebook Rule Changes

The loss of FEE’s #1 traffic source requires adapting our strategy to maintain our business goals. Our primary means of doing so is to replace lost organic reach with paid reach (ads). The team at FEE has learned to do this with some effectiveness, despite ongoing algorithm changes:

Organic vs Paid Reach: January 2017 – April, 2018:

We believe that paid reach should have different business goals than organic reach. In other words, we do not believe in merely paying to replace organic readership with paid readership. This is both expensive and does not generate returning traffic. Instead, FEE’s marketing team had focused our paid reach on specific business goals that serve our organizational priorities, such as email leads, event registrations, market research, and new audience outreach.

Finally, while Facebook has moved away from a focus on publishers, there are other platforms which are focused on story discovery. FEE has experimented with Apple News, Quora, Flipboard, Medium, Reddit and other platforms which may surpass Facebook as content discovery mechanisms.

Reacting to Facebook Ad Strategy Changes

We’ve also had to adapt to ongoing changes in Facebook’s ad platform in response to events such as ads by alt-right extremists, the Cambridge Analytica leak, and intense competition from other businesses who were “exiled” from organic reach by algorithm changes in 2018.

We’ve noticed a significant change in the effectiveness of our paid lead generation ads. We ran the same ad for our Essential Guide to Health Care Reform in November and April and had wildly different results. In November 2017, we paid on average $0.72 per email address. In April 2018, the cost per email rose to $5.07.

Our current strategies include:

  • Experimenting with landing page view ads instead of lead gen ads.
  • Relying more on popups than Facebook ads to collect email addresses.
  • Boosting content that gets great organic reach (>80% usual reach) to try to “ride the wave” of the organic traffic.

Focusing on Quality of Interactions vs Quantity

As explained above, in the last two years, both Facebook and Google have made efforts to limit content reach to the subset of users with “genuine” engagement or interest. The downside for us is that fewer people see our content. The upside is that the people who do see our content, are more likely to pay attention to it. Furthermore, we have a chance to be rewarded for more meaningful and useful content.

To measure meaningful engagement, we will try to prioritize meaningful engagement: active time on page (provided by Parse.ly analytics), longer video views, email captures on FEE.org, Facebook Ads, and landing pages, and Facebook/YouTube subscriptions. We will also try to improve the quality of our content by sharing fewer stories from other sites on FEE.org and writing more in-depth analysis and practical career/life guidance.

Reposted from FEE.org

America’s Deadliest Drug Addiction Affects Everyone

Today, my *web browser* is insisting that I “can help curb opioid abuse.”
Here is my contribution:

Stock photos in the West universally use the presence of a mug in the shot to connote work, just as the presence of soda or alcohol drunks connote fun. The mug presumably contains coffee, a psychoactive compound which may enhance mental performance. What is shocking is that we not only sanction a chemical dependency on caffeine but celebrate not just the coffee, but our very dependency on it.

Americans see no contradiction with celebrating their own drug addiction to coffee and alcohol while jailing millions of their neighbors who happen to use a different plant for entertainment because of a different economic and cultural context. Cannabis, methamphetamines or cocaine may be stronger per coffee per dose — but make no mistake — if coffee were made illegal, the caffeine density of a single dose would increase to those of banned drugs. Keep in mind that cocaine, heroin, and other banned drugs started out as additives to health tonics and soda drinks, while the THC dose in cannabis rapidly increased after the U.S. banned it in 1937.

I have no problem with coffee as such. I drink it most working days specifically for its psychoactive properties and as medication for occasional tension headaches. However, I would be ashamed to be addicted to caffeine and would consider it a moral failure and a threat to my health. Caffeine addiction is a real health threat, though surprisingly little studied given that perhaps hundreds of millions of Americans suffer from it.

While excess caffeine usage is only mildly harmful, there is a far more serious substance addiction which even more Americans suffer from: sugar. Excess sugar consumption is a primary cause of metabolic syndrome, which is a leading cause of obesity, heart disease, type 2 diabetes, heart disease, and mental illness, including schizophrenia, bipolar disorder, and Alzheimer’s, as well as many types of cancer.

Virtually all Americans consume unhealthy amounts of sugar, and 70% of U.S. adults age 20 years or older are overweight or obese.  Sugar kills more people than all other psychoactive drugs combined. Excess carbohydrates in the diet are the primary cause of obesity, and bad diets rather than genetics or lack of exercise are the overwhelming cause of obesity.

There is sufficient evidence to link excessive sugar intake to the pandemic of obesity and cardiovascular disease. – AHA

The growth of sugar in American diets is primarily linked to U.S. agricultural policy and regulatory capture of agencies by the farming and food industry. This (not our prosperity or sedentary lifestyle) is why obesity is strongly linked to income levels, as wealthier Americans are less affected by sugar additives in food influences by agricultural policy.

Metabolic syndrome is the result of a dangerously addictive diet, just as addictive and difficult to break as heroin or methamphetamines. “Hard drugs” do kill people faster, but only addiction-vulnerable members of society tend to become dependent on them, whereas sugar is a low-level high which has nearly completely infiltrated the American food supply. One big secret of the War on Drugs is that vast majority of people are unlikely to ever become addicted to hard drugs (whether prescription or illegal) because addiction is the result of certain genetic, social, and psychological attributes.

The *primary* cause of any drug addiction is not the pleasure of the high or the pain of withdrawal, but the lack of mental and social structure to provide healthy alternatives to addictive behavior. This is equally true of cocaine, meth, alcohol, pornography, coffee, or sugar. Drug addicts of all kinds universally suffer from a lack of a social support network which advocates and enables healthy dopamine-generating activities.

The Internet Did Not Kill the Music Star

For decades now, we’ve been hearing how file sharing, cheap iTunes singles, online radio, and stream ripping “killed” the music industry. In 2014, Taylor Swift wrote about the future of the industry in a Wall Street Journal article.  Her fantastic economic claims have been debunked elsewhere, but one of her basic criticisms was that Internet streaming is challenging the traditional revenue model of the music industry.  However, Taylor’s own career demonstrates how the Internet and digital technology have lent themselves to a creative renaissance of the music industry, in part due to her own leadership.

Rather than the death of the music industry, we are seeing a glorious revival of music, and nowhere is that more evident than the top music videos on YouTube, which has become one of the primary ways that young people listen to music. The YouTube “music” channel has almost 100 million subscribers, with over 4 billion views for top videos. Nearly all of the top 100 videos on YouTube are music videos.

Here are five videos which demonstrate how the Internet is enabling a glorious revival of the music industry:

1: Taylor Swift – Shake It Off

Shake it Off seamlessly blends Taylor’s “dorky dancer” style with some of the world’s best dancers, combining hip hop, ballet, modern dance, jazz, breakdancing, and even a cheerleader performance. The video makes dozens of pop culture references while mocking Taylor’s competition and inspiring dozens of articles about her feuds with other celebrities.

When it rocked the charts with 2.4 billion views, Shake it Off was one the biggest pop music videos ever. Released for her 1989 concert tour, the video helped Taylor make over $250 million, making hers the highest grossing concert tour ever, and making Taylor one of the world’s highest-paid celebrities.

Taylor used the demand for her album to force Apple to change its policy of not paying artists during free trials of its music service. While Taylor often denounced streaming music on the Internet for not paying artists enough, it’s clear that she (or her publicity team) is a clever negotiator, and skillfully used the audience made possible by the Internet to achieve massive success.

2: Fifth Harmony – Work from Home ft. Ty Dolla $ign

With 1.7 billion views, Fifth Harmony’s hit music video Work from Home shows that the girl group still has massive appeal.

Fifth Harmony rose to stardom through effective social media marketing, with billions of YouTube views and over 10 million followers on both Instagram and YouTube.

In “Work from Home” the group mixes R&B hooks with hip-hop and minimalist synth beats to create a sexy, modern neo-feminist take on the relationship dynamic.

The song features “…slinking beats and playfully sexy lyrics about convincing your partner to skip the boardroom for the bedroom.” Numerous double entendres are present in the lyrics and the music portrays “freaky bedroom fun as glorious mostly in the bounds of a relationship.”

While a previous generation of R&B and pop music presented women as sexual objects, this song and video flips the dynamic and presents men in hard hats with bulging muscles as the object of desire. The women in this video “appear to now be in full control of their collective sexuality and [are] wielding it as they choose.”

The audio and video editing on the music video are impeccable. Before digital editing, music videos like his would have been prohibitively expensive to produce for all but the biggest stars. Modern digital video editing tools have allowed little-known groups like Fifth Harmony to rocket to stardom by releasing tracks and videos that are just as polished and thought-out as Hollywood blockbusters.

The music in Work from Home was digitally produced by two artists, while other groups recorded the vocals, and yet another company mixed the vocals and audience, and incorporated samples from other songs. The digital nature of modern music and video production allows the entire process to be distributed across a complex global supply chain.

Similar videos have led to great success for other girl groups: see G.R.L.’s Ugly Heart and Little Mix’s Black Magic.

3: Cher Lloyd – Want U Back

Cher Lloyd’s track Want U Back is one of my favorites for the playful and creative way she uses her voice:

The track is produced by Shellback, a musician and record producer (with four Grammys) who is responsible for several songs on this list. Cher’s vocals span from low note A3 to high note F#5, and Shellback uses Cher’s vocal dexterity to “give the song an almost caricature quality.”

While digital audio processors such as Auto-Tune are often known as cheap gimmicks, modern pitch correction tools are much more subtle and were creatively used to mix LLoyd’s vocals, including a recurring hook from the sound of her ‘frustrated grunts.’

4: Logic: 1-800-273-8255

American rapper Logic often writes about his drug use and issues facing African-American communities. His song 1-800-273-8255 referrers to the phone number for the National Suicide Prevention Lifeline.

This track shows the remarkable merger of rap and hip-hop with pop music culture, both musically and socially. Here is Logic’s explanation of his song:

So the first hook and verse is from the perspective of someone who is calling the hotline and they want to commit suicide. They want to kill themselves. They want to end their life. When I jumped on a tour bus that started in Los Angeles, California and I ended in New York City and did a fan tour where I went to fans’ houses and shared meals with them, hung out with them, played them my album before it came out. Them along with other people on tour, just fans that I met randomly, they’ve said things like, “Your music has saved my life. You’ve saved my life.” And I was always like, “Aw so nice of you. Thanks.” And I give them a hug and s**t but in my mind, I’m like, “What the f**k?” And they’re really serious. And they tat s**t on their arms and get s**t like lyrics that save their life and in my mind, I was like, “Man I wasn’t even trying to save nobody’s life.” And then it hit me, the power that I have as an artist with a voice. I wasn’t even trying to save your life. Now what can happen if I actually did?

Rap music has evolved from boasting about women, drugs, and money to awareness of greater social issues. Logic’s music video features a young black man who struggles with his sexuality and considers suicide. Following the night of the 2017 MTV Video Music Awards, the NSPL experienced a 50% surge in the number of calls to their hotline.

For a similar video in the electronic music genre, check out Clean Bandit’s Symphony, which merges classical opera and electronic music.

5: Sia – Chandelier (Official Video)

Sia’s “Chandelier” is brilliant on several levels. On first listen, the song appears to celebrate binge drinking culture. However, a closer look reveals that Sia is really diving into her experience with substance addiction and the culture of binge drinking. The music video reinforces the message with a stunning dance performance by 11-year-old Maddie Ziegler. Maddie’s performance is an “interpretive dance in a deserted, dirty apartment ‘while spinning, kicking, leaping, crawling, falling, twirling and hiding herself behind window drapes.’”

I am no fan of contemporary dance, but Maddie is clearly a highly skilled artist who integrates movements from ballet and gymnastics into a sequence which deftly visualizes the mix of ecstasy, escapism, and – ultimately – the self-loathing and desperation of Sia’s lyrics.

While Chandelier is lyrically and visually simple, it also highlights cultural assimilation at its best. It is an electropop song that features electronica, R&B, and reggae influences. Sia is an Australian whose career took her to London and ultimately Southern California, where she met local choreographer Ryan Heffington on the set of her music videos. Their collaborations have “done more to raise the standards of dance in pop music than nearly any current artist integrating the forms.” Ryan has since choreographed several hit music videos, tv shows, and even the film Baby Driver.

One unique aspect of Sia’s performances is that she chooses not to reveal her face, and even faces away from the audience during live performances. With 5 billion views, the success of her YouTube videos has been essential in taking her career from a music writer for other musicians to a successful performer, despite her unconventional performing style.

While musicians and music industry executives have often criticized the impact that the Internet and technologies are having on music, several tech innovations are in fact enabling a creative renaissance in music. These include:

  • Digital audio processing innovations such as Auto-Tune and pitch correction have opened up new harmonic and compositional possibilities and created stars from singers with less-than-pitch-perfect voices.
  • Digital video production and editing tools that have dramatically lowered the cost of producing quality videos.
  • Social media allows artists to reach fans on an unprecedented scale and bootstrap themselves to massive success.
  • Instant global communications have allowed artists to collaborate in new ways, sourcing the best talent from around the world, and inspiring the synthesis of cultures and genres.

The Internet and tech aren’t killing music, they are driving its creative explosion.