thomas

$1M now, or one penny now doubling every day for 30 days? 🧵

PhD in aviation ∩ climate science | Aviator, diver, ETH maxi, nexialist | Host of /diving /ethfinance /eth-staker /geopolitics /science /singapore /thomas

You’ve probably guessed that the latter is a more lucrative option, thanks to the power of exponents. $0.01 doubling every day yields $5.4M on day 30; five times more than the alternate option. 2/6

But even in organizations that pride themselves on thinking exponentially, walking the talk is hard.

In the above example, the second option remains inferior to the first for 27 of the 30 days. It’s only on day 28 that the penny option outperforms the $1M alternative; but from there, it just flies off. 4/6

Practically, it means that, should an executive check in on the investment project on any random day, there’s a 90% chance (27 out of 30) that the project will be deemed to underperform relative to well-established, safe expectations. 5/6

This can lead to projects being terminated prematurely despite being on the cusp of a breakout.

We don’t have many examples of those, precisely because we will never know what happened if they had been given just a bit more runway. 6/6 🎬

It’s not immediately intuitive, though, and many of us are stuck with a linear mode of thinking by which we overestimate the change in the short term and underestimate it in the long term. After all, inflection points happen slowly, and then all at once. 3/6

app.intersend.io | sequence. pimlico. poap. polygon. consensys. paxful. flipside crypto. dash. bridgewater. darpa. secdef. navy. dia | linktr.ee/alexanderchopan

They’d probably claim the penny on day 1, use it to mint a monkey NFT on the degen L3, use that NFT collateral to borrow rugETH (a fifth-order derivative of an LST with zero liquidity), restake it on Swell’s L2 for extra EL points, and lose it all by clicking on a scam link on Twitter