Warren Buffett on Bitcoin, why Silicon Valley's teen suicide rate is 5x the US average, Vitalik on AI, 0-to-60 in one second by 2025, the upside to dancing to the music and more.....
The Decentralization of Education
We send our children off into the world powered by sugar drinks, Adderall, a false value system, and our over-sized egos to their peril
In an earlier issue of The Rap, we noted that, based on the numbers, Gen Z (born between 1997 and 2012) is decidedly more anxious about their lives, pessimistic about their futures, and disillusioned about the direction of the country than the Millennials (born between 1981 and 1996). And this depression epidemic is not reserved for the economically disadvantaged. Silicon Valley has long had the highest rate of teenage suicides [five times the national average!], primarily due to kids feeling they have not ‘achieved’ enough.
The blame for this tragic state, like the blame for the subjugation of our kids by Instagram, Facebook, TikTok, Snap, and Google, goes to the parents. Simply put, we got busy, so we handed our kids over to the social media Goliaths and a very broken education system. We then thoughtlessly (cruelly?) instruct 18-year-olds to take on upwards of hundreds of thousands of dollars of debt based on the lie that it's the only sure ticket to building wealth and a fulfilling career. No matter which way you look at it, 18 is way too young to make that kind of economic decision.
Sadly, the data shows that at least half of the kids who do make that decision may never even achieve an ROI on their education investment and end up compromising their living standards for many years while paying off student loans. The facts say that almost half of graduates feel their college degree has yet to help them land a 'college-level' job.
“I am a huge believer in equal opportunity, as opposed to equal outcome. I don’t believe in equal outcome because life is unfortunately not that way, and it would be a pretty boring place if it were. Equal opportunity to me, more than anything, means getting a great education, and it pains me because we know how to deliver a great education—we really do—but we don’t.”
—Steve Jobs in 1995 while still operating NeXT Computer, the company he sold to Apple in 1997 when he returned to the company he co-founded.
During our further investigations, we came across the embedded interview with Steve Jobs from 1995, where he shares his views on education. We encourage listening to the interview, as many of the problems Steve highlighted back in 1995 are still with us today—yet even worse.
Parents dropped out, and Institutions took charge.
We willingly give most of our kids' waking time to highly antiquated, inefficient, and psychologically harmful Institutions. Our kids also must live under this manipulative and neurotic Education Board/Teacher's Union boss-created worldview, which is presented as the Gospel and forbids open debate. We mistrust the education system because we often feel that the powers at be are busy trying to remake our kids in their image, accompanied by a ‘we know what is better for your kids than you do’ attitude.
The current structure is not worth saving; it needs to be radically disrupted and decentralized. If you watch the outstanding and award-winning documentary Waiting for Superman, and we offer up their conclusions to support our case on this point.
Another fact is that home-schooled kids get the best results, which proves that the more personalized the approach to teaching, the better the outcome; the more standardized the experience, the bigger the waste of money.
"The ultimate customers of education are the parents, not the students, and the problem we have in this country is the customers went away. For the most part, parents stopped paying attention to what was going on in the schools. Mothers started working and couldn't make the PTA meetings, schools became more institutionalized, and parents spent less and less time involved in their kid's education. And when the customer goes away, the level of services almost always goes down." —SJ, 1995.
Education tokens to the rescue
The current education system has it reversed. Today, our kids are pitted against each other—often ruthlessly—when the real competition should be between the teachers. We agree with Steve—There is only one effective way to reverse this disorder, and that is through a voucher system that creates competition between the teachers/guides and can ensure that the most effective teachers can make a lot of money.
"A monopoly now controls our education system, and whenever a monopoly is in charge, the quality of service inevitably goes down. In California right now, the State spends $4,400 per student ($9,108 today), but we, the customers, have no power over how our money is spent. I believe very strongly that if the State gave parents a $4,400 voucher per kid that they could only spend at an accredited school, the competition for these vouchers would create a boom in new schools, higher paid teachers, and a much better education system." —SJ, 1995.
The system Steve describes above could be exquisitely executed with a Web3 approach by tokenizing the vouchers and validating educational achievements on immutable, decentralized blockchain platforms that no central authority can access or control. A substantial secondary benefit to a blockchain-based education system is that kids could validate a much broader scope of 'educational experiences,' such as passing a lifeguard test, earning an Eagle Scout badge, or documenting a part-time job. The decentralized approach would give kids the power to build and control their own 'transcripts' and feel a sense of greater achievement.
For employers, this means the likelihood that people could falsify their backgrounds drops to almost zero. It also makes for a fairer tax system because those without kids wouldn’t have to foot the costs, and those with more means could directly donate education tokens to economically disadvantaged kids and enjoy validated tax write-offs.
One of the great myths about vouchers is that the economically disadvantaged would fall further behind if we moved to school vouchers. However, according to the stats, 75% of black, Latino, and low-income families support school vouchers.
Under this new decentralized funding approach, innovation in education would explode, teacher/guide pay would become competitive and attract better talent, and every child would rise. It would also relieve the unforgivably colossal carbon footprint left by our current education structure. The transition would undoubtedly be hectic at first, but freedom of choice in education would lead to a more personalized path for our kids. It's a complete win-win all the way around.
“Imagination does not become great until human beings, given the courage and the strength, use it to create. Our care of the child should be governed not by the desire to make him learn things but by the endeavor always to keep burning within him that light which is called intelligence.”
—Dr. Maria Montessori, The founder of the Montessori program and an Italian educator, physician, and scientist.
Our final take
Education should be a lifelong, joyful, and fulfilling experience. Collecting validated merit badges along the way, beyond the purview and control of mistrusted institutions, is a more empowering way to build personal capital, command higher rewards in life, and help employers vet new talent.
In another setting, Steve Jobs reminded us that we don’t have to accept things the way they are just because they are the way they are. This mentality defines what it means to be a global Silicon Valley entrepreneur—See a Big Problem and set out to solve it. The educational goal for our kids has always been the same—that is, to achieve enough validated knowledge and skills to become gainfully employed and self-sufficient by adulthood—ideally in an area they are passionate about.
On the edge, kids in Silicon Valley are stepping in front of trains to end the misery of not living up to the false measures and standards of the current education system. If parents do not step up and take back the power to stop this madness, no one will, and our kids will continue to pay—some with their lives.
Anthony Perkins, Founder & Editor, Cryptonite, March 4, 2024
In a future edition of The Rap, we will share our thoughts and ideas on developing 'K through 8th' curriculum ideas. Hint: Kids don't have to wait to go to 'college' to learn how to care for and feed themselves and manage their own financial and otherworldy responsibilities. In other words, adolescence should end at 16 to 17, not 25 and beyond.
Did you know?
(Overheard on the streets of the global Silicon Valley. Got any hot insider tips? Email us editor@cryptoniteventures.com)
Billionaire Boys & Girls Club
At least three billionaires are not so sure a formal college education offers the best ROI for career advancement—and one of them will pay you not to go to college to prove it. Paypal and Palantir cofounder and power investor Peter Thiel created the Thiel Fellowship (TF) in 2011 to provide $100,000 and two years of attention and support (for no equity) to aspiring entrepreneurs under 22 years old who agree to drop out of school to pursue their free-market dreams.
The TF is a profound and successful experiment in which clever, resourceful, and driven young people can take an alternative path to exploring their curiosities and building incredible things that solve real-world problems.
Notable Thiel Fellowship alums
Vitalik Buterin, co-creator of Ethereum
Dylan Field, founder of Figma ($20B acquisition by Adobe before the deal was killed)
Ritesh Agarwal, founder of OYO Rooms ($9.6B valuation)
Shahed Khan, co-founder of Loom (acquired for $975M by Atlassian)
Austin Russell, founder of Luminar Technologies (Nasdaq: LAZR)
According to a study by CB Insights, 11 (7%) of TF’s 150 graduates have created companies with valuations/market caps over $1B, with many others valued in the hundreds of millions. As a comparison, Y Combinator (YC) has invested (for equity) in 4,500+ companies, with just over 100 (.02%) achieving $1B+ valuations/market caps.
While both TF and YC clearly target very select entrepreneurs, their models still support the validity of the school vouchers approach. Kids do not need to build a unicorn to be successful in life, but they will thrive if they feel the power to invest in creating their own careers and making money at what they love.
What Elon and Warren think
Apples do not fall far from the tree, as Paypal’s other famous cofounder, Elon Musk, shares Mr. Thiel's sentiments about maximizing one’s education for success.
"People don't need college to learn stuff—you can learn anything you want for free. Did Shakespeare go to college? Probably not. College is basically for fun and to prove that you can do your chores. It's a great excuse to hang out with a bunch of people your age, walk around with a backpack on, drink beer, and put off having to get a job.
The main value of college is to prove you have enough discipline to complete annoying homework assignments, but companies should not require a degree. Most of tech's greatest founders—Jobs, Gates, Michael Dell, Larry Ellison—all dropped out of college. Possessing exceptional ability should be the main requirement employers should consider."
—Elon Musk received undergraduate degrees from Queen's University in Kingston, Ontario, and the University of Pennsylvania, where he graduated from the Wharton School of Business. He dropped out of his Ph.D. program at Stanford after two days.
Cryptonite editor Tony Perkins once asked Warren Buffet what the most important trait he looks for when interviewing someone for a job. This was Mr. Buffett’s response.
'Oh, that's easy. The first question I ask a candidate is how old they were when they first started doing something to make money. The younger they were, the more industrious they are, and generally the more successful in life they will be.'
—Warren Buffet attended Columbia Business School, where he studied under Benjamin Graham, the father of value investing. This provided the beginning framework for his becoming a multi-billion dollar investor.
The problem in today’s world, however, is that college-bound kids have no time to have a part-time job anymore because they are too busy doing the busy work required to get into college.
UnSocial Networking
Apparently, there is a boom in parent-managed Instagram subscription offerings that provide a way for paying pedophiles to gawk at their kids—some as young as nine years old. To further fuel these pedo desires, Meta’s algorithm-run recommendation systems were reportedly promoting child-modeling accounts to adults who posted pedophilic comments. Rival social media platforms TikTok, Patreon, and OnlyFans ban subscriptions that feature child models. Zuck, are you listening yet?
A16Z Recent Productivity AI Apps By Category
This chart produced by VC powerhouse Andreessen Horowitz is a portrait of how AI, as a feature, is certain to penetrate every future application and be applied to almost every business process. Since 2020, over 6,000 AI companies have received over $300 billion of risk capital equity investment. A large percentage of those companies will not make the finish line, and the AI shake-out is in full swing. However, this period of experimentation will give birth to some of the most valuable companies in the world, and more than a few are already listed on this chart.
OnHollywood
Since 2020, 49er legend Joe Montana’s Liquid 2 Ventures has invested in a whopping 10 of today’s unicorns, including Airbyte (currently valued at $1.5B), Pipe($2B), and Whatnot ($3.7B)—before they reached $1B+ valuations. During that time, Kutcher’s Sound Ventures bet on five companies that went on to become unicorns. Perhaps not surprisingly, the top 5 celebrities all set up their own VC funds. The other three are The Chainsmokers’ MANTIS, Jay-Z’s Marcy Venture Partners, and Kevin Durant’s Thirty-Five Ventures.
Celebrities tend to invest in consumer-facing brands and media-adjacent businesses; however, some, such as Kutchner and Kevin Durant, jumped into commercial AI with investments into Hugging Face, which was valued at $4.5B at its last investment round.
Marijuana Scorecard
48 million users across the US smoke weed, and this is what this crowd can expect per recent studies on marijuana consumption.
The bad news
In addition to minor side effects that many users joke about—such as short-term memory loss—studies have linked marijuana to clogged arteries, heart failure, male infertility, chronic bronchitis, and other respiratory ailments. Developing adolescent brains are most at risk from overconsumption and may trigger—schizophrenia, psychosis, and depression in youths. It can also knock off a few IQ points and affect behavior and academic performance.
The good news
Other than a means to numb oneself or stimulate creative juices, smoking herb has some positives. Cannabis and its derivatives may help alleviate pain—although some researchers contend that it performs little better than a placebo. It may also decrease chemotherapy-induced nausea, calm epileptic seizures, ease the symptoms of multiple sclerosis, and serve as a sleep aid.
Net-net, it’s better to breathe clean air if you can, we think.
Blockchain meets AI
Ethereum co-founder Vitalik Buterin said AI could help Ethereum developers address some of the network's ‘most considerable technical risks.’ One application Vitalik would like to see is an AI-assisted formal verification of code and bug finding. ‘Right now, Ethereum's biggest technical risk probably is bugs in code,’ says the Poster Boy of Crypto. ‘Anything that could significantly change the game on that would be amazing.’
This is encouraging news from a tech leader who once claimed AI represented the greatest threat to humanity's long-term survival.
‘At least any damage done by climate change, an artificial pandemic, or a nuclear war would still leave islands of civilization so survivors could pick up the pieces. But a superintelligent AI, if it decides to turn against us, may well leave no survivors and end humanity for good.’
—Vitalik Buterin, Cofounder of Ethereum
With some of his fears apparently behind him, Vitalik further predicts ‘AI could become a player in the cryptocurrency investment game. He pointed out that trading bots have been better than humans at arbitrage by taking advantage of price discrepancies in the market for years—but arbitrage bots are only the first example of a much bigger category.
Spot Bitcoin ETFs update
The nine new spot Bitcoin exchange-traded funds (ETFs) have amassed 300,000 Bitcoin worth $17B in less than two months since their public debut on January 11, with net inflows surpassing $6 billion. This activity helped boost the price of BTC to over $68K—just shy of its all-time high—and its market cap to breach $1.2T. BlackRock’s iShares Bitcoin Trust topped the volume charts with $1.29B, followed by Fidelity’s Wise Origin Bitcoin Fund, which came in second with $576M.
Hey Mr. Buffett—You paying attention to what’s up over here? 🤑
Robots on the March
Amazon, Nvidia, Microsoft, Open AI, and Jeff Bezos, as well as other tech giants, are pumping upwards of $675M in new funding into robot company Figure AI at a $2.6B+ post-money valuation. Figure AI builds general-purpose human-like robots designed for commercial use in industries such as manufacturing, shipping, logistics, warehousing, and retail.
Brett Adcock founded FigureAI, and his team of robotics and AI experts are from Boston Dynamics, Tesla, Google DeepMind, and Archer Aviation. Other investors in Figure AI include Intel Capital, LG Innotek, Samsung, Parkway, Align Ventures, ARK Venture Fund, Aliya Capital Partners, and Tamarack. Analysts project the humanoid robot market to reach $38 billion by 2035, with over 250,000 units shipped in 2030
AI Chips and Autonomous Cars
Chinese car maker Geely-backed Ecarx aims to take advantage of Nvidia’s growing auto business. Ecarx’s technology focus is intelligent vehicles, high-definition maps, and chips for digital car cockpits and driver-assist. Ecarx co-founder and CEO Ziyu Shen says that Nvidia currently has an edge when it comes to AI-based autonomous driving systems but that Ecarx is about to introduce more mass-market designs targeting local Chinese companies required to buy domestically by the CCP.
Specialized chips are designed to process sensor data, make real-time decisions that help ensure the safety of passengers and pedestrians, and also achieve energy efficiency. Nvidia CEO Jensen Huang says the ‘systems on a chip’ (SoC) for the autonomous auto and advanced driver-assistance systems (ADAS) sectors is his company’s ‘next billion-dollar business.’
Straight outta Silicon Valley
After investing billions, Apple is canceling its decade-long electric car effort known as Project Titan. One of the 2,000 employees working on the initiative is moving over to Apple’s AI unit, led by John Giannandrea, who has also overseen the car effort, while others will be laid off. Two other auto startups, Rivian and Lucid Motors, are also struggling.
Meanwhile, Elon says his long-promised Tesla Roadster car aims to ship by the end of 2025. He further says the new Roadster, which is a collaboration between Tesla and SpaceX, will go from 0 mph to 60 mph in less than 1 second. ‘There will never be another car like this if you could even call it a car,’ says the proud owner of both companies.
Save Taiwan (or not)
We are all in favor of any group of people seeking popular sovereignty in their country or region and would include the Taiwanese on that list. We are not so hot to send them cluster bombs and such to get there. We prefer the successful non-violent tactics exercised by Mahatma Gandhi during India’s liberation, Martin Luther King Jr. during the US Civil Rights movement, and the Lech Walesa-led Polish Solidarity movement that sparked the end of the Soviet Union.
"The message of Jesus, as I understand it, is contained unadulterated in the Sermon on the Mount, which went straight to my heart. The verses 'But I say unto you that ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other.' And also, 'If any man take away thy coat, let him have thy cloak too,' delights me beyond measure."
—Mohandas Gandhi
"Gandhi was probably the first person in history to lift the love ethic of Jesus above mere interaction between individuals to a powerful and effective social force on a large scale."
—Martin Luther King Jr
When you examine these three movements, one sees how deeply they were connected philosophically and spiritually and have much to teach us in a world that is clearly losing its way. We still have not fully confronted and taken accountability for the results of the war the US initiated in the Middle East. We strayed far from the path of non-violent protest as if we hadn’t learned anything from the success of the Civil Rights movement and the failure of the Vietnam War.
No Can Do
Apparently, Elon is not with us on Taiwan’s independence. Last September, Taiwanese officials called out the SpaceX founder for seemingly siding with China’s reunification doctrine toward Taiwan. Apparently, Elon’s SpaceX Starshield internet service was not working for US troops in the region.
“I think I’ve got a pretty good understanding as an outsider of China. From their standpoint, maybe it is analogous to Hawaii or something like that, like an integral part of China that is arbitrarily not part of China.’
—Elon Musk on the All-In Podcast.
“Listen up [Elon], #Taiwan is not part of the #PRC & certainly not for sale.”
—Jaushieh Joseph Wu, Taiwan’s Minister of Foreign Affairs, X post
These suspicions were confirmed by a delegation of US lawmakers who met with Taiwan officials like President Tsai Ing-wen and President-Elect Lai Ching-te. After getting back, the House Select Committee on the Chinese Communist Party sent a letter to Elon demanding that US troops stationed in Taiwan get access to SpaceX’s Starshield, a satellite communication network explicitly designed for the military.
Gen Z (Born between 1995 and 2012)
Abigal Shrier's new book, Bad Therapy, argues that touchy-feely parenting and an obsession with 'therapy' has resulted in the loneliest, most anxious, helpless, depressed, pessimistic, and fearful generation on record. Our Gen Z kids are less likely to go on dates, get a driving license, hold down a job, or socialize with friends in person.
Gen Z also engages in the least amount of sex (while arguably having it most readily available) and reports having the fewest romantic relationships. They are reluctant to cross the milestones—promotion, marriage, starting a family—that previous generations eagerly embraced.
"The more closely we tracked our children's feelings, the more difficult it became to ride out their momentary displeasure. The more closely we examined our kids, the more glaring their departures from an endless array of targets—academic, social, and emotional—appeared. In a panic, we rushed them to mental health professionals for testing, diagnosis, counseling, and medication. The truth is that these mental health interventions on behalf of our children have largely backfired.'
—Abigal Shrier, author of Bad Therapy
Abigal shares six harmful therapy mantras beloved by modern psychology she thinks are ensnaring our kids.
'Tell them to prioritize their feelings'
"Emotions are highly reactive to our attention. Routinely asking kids about their emotional state increases emotional distress. When we try to help our young adults and children, we throw oil into the fire. Emotions are not only unstable, they're also easily manipulated."
—Yulia Chentsova Dutton
'Banish chaos from your child's world'
'There's sensory deprivation. The pristine nursery is all quiet now. They're all using sound machines. They're not getting dirty. They're not getting that normal chaos.'
—Neuropsychologist Dr Rita Eichenstein
'Keep them under close supervision'
'At home, the parents are watching them. At school, they're being observed by teachers. Out of school, they're in adult-directed activities. They have almost no privacy. When psychologists do research where they want to add an element of stress, how do they add it? 'They simply add an observer."
—Peter Gray, a professor of psychology at Boston College
'Give them a name for their pain.'
Our kids are not shy; they have 'social anxiety disorder.’ They aren't poorly behaved; they have 'oppositional defiant disorder.’ They aren't disruptive in class; they have 'ADHD.’It wasn't our fault, and it wasn't theirs. We may feel relief that these diagnoses make us feel like our children's named ‘disorders' are not our fault, but they leave the child feeling there's something wrong with their brain.
'Whatever the issue, dish out the drugs.'
The more we administer Lexapro, Ritalin, and all the other modern mental health elixirs, the more kids' mental health has declined. There's far less proof of antidepressants' efficacy for children than for adult patients, according to a 2021 study conducted in Australia and New Zealand.
'Break off all contact with toxic family members.'
'Family estrangement' (i.e., cutting off family members) is an epidemic amongst Gen Z parents with the typical excuse, 'Well, my therapist said you emotionally abused me.' Family estrangement strips kids of a source of stability and support and leaves them with the impression they descend from terrible people.
Nearly 40% of Gen Z has been in therapy, compared with 26% of Gen Xers—those born between 1965 and 1980. One in six American children aged two to eight years old has a diagnosed mental, behavioral, or developmental disorder. Nearly ten percent of children now have a diagnosed anxiety disorder.
So, what can we do about it?
Abigal suggests 1) trust yourself, not the experts, 2) Stop putting your worries in their head, 3) teach them to think about others, and 4) Allow grandparents, extended family members, and other positive role models to play a role in your child’s development.
We highly recommend Ms. Shrier's book Bad Therapy. It is one of the most sensible books on kid's psychology we've read and courageously addresses the dark trends facing today’s youth.
Pura Vida (pure life)
In a University of Michigan neuroscience poll, 98% of adults (50 to 80 years old) said they benefit from engaging with music, as it helps with stress relief, mood improvement, and increases energy. ‘Music has been woven into the fabric of our existence for all of humankind, and the power to bring joy and meaning to life,’ said Joel Howell, MD, Ph.D., who worked with the poll team.
Energy drinks contain an average caffeine content of 150 mg per liter mixed with sugar, vitamins, minerals, and amino acids. A new Norwegian study found that those who guzzle these elixirs for mental and physical pick-me-ups often experience insomnia and disrupted sleep patterns, which create yet more desire for another energy drink. Get the picture?
18 year olds are not taking on "upwards of hundreds of thousands of dollars of debt", unless they have the collateral available to take out a private loan. Undergraduate students are generally only able to borrow from the federal government and those loans for dependent students are capped at $31,000 total over the course of their undergraduate education and slightly more for independent students.
Parents do sometimes borrow more than they can afford to pay back, as do some graduate students.
I agree with so much that you write in this article but this kind of hyperbole around student loans is misleading. We do have a student loan crisis but is not driven by 18 year olds borrowing too much for their undergraduate educations.