The Twitter Digital Square, NFT collections, and Bots
We, humans, desire status. This is part of our culture and the only change is How Status is recognized. We can safely say that in this day and age, Billionaires and Digital Moguls easily gain high Social Status.
On social media platforms, the competition to earn status is what keeps us (the hoi polloi) engaged. Twitter is no exception and its high involvement in the NFT space, enables it to offer a Web3 way to gain status. No other social platform has had the breadth of involvement in the NFT space as Twitter (Not Facebook, nor Youtube, nor TikTok).
We could safely say that Twitter has been up to now, the top contender to be nominated as a `Digital Square for NFT chatter`.
Last September Twitter also announced the capability to integrate Web3 crypto wallets not only for tipping but also to connect your NFTs. Earning Digital status on Twitter by linking the NFT you own and using it as your profile picture, became the new thing at the Digital Twitter Square.
If you were lucky enough to own a Crypto Punk NFT or a Bored Ape Yacht club NFT because you were early or wealthy, then Twitter tech-enabled you to get verified and display it as your profile photo.
Showing off essentially your valuable digital possessions or showing your strong affinity to the crypto community, became the new thing at the Digital Twitter Square.
The Twitter Digital hexagon profile photo rather than the common circle photo was the distinct visual for the NFT verified users. However, this service has only been accessible to a few countries and only to the $2.99 a month Twitter Blue subscribers.
We’ve launched Twitter Blue in the US, Canada, Australia, and New Zealand. In these regions, Twitter Blue is available for in-app purchase on Twitter for iOS and Android, or on twitter.com through our payment partner Stripe.
The US is the biggest Twitter market (by number of users) but Asia, Japan and India are growing and combined they’re already bigger than Twitter’s entire US audience. 
Earlier this week, I tweeted an article about the 7 most expensive NFTs (link). The ranking was based on the prices at `issuance` (not secondary market prices). The most expensive one was $91.8 million for Merge by Pak (purchased by nearly 30,000 collectors). The 7th one was sold for $5.4 million and it was the original source code of the web sold by Sotheby`s.
Two of the seven most expensive NFTs belonged to Beeple and one belonged to an NFT collection. The Crypto Punk #5822 is the 4th most expensive NFT and sold this year for $23.7 million. Another CryptoPunk #7523 sold at Sotheby`s for last year for $11.3 mill.
NFT collections are a growing distinct category that are inextricably linked to the new cultural trend at the Twitter Digital Square. Owning an NFT from a Collection and using it to verify your Twitter account and displaying an hexagon photo profile, is a Status symbol and a huge business opportunity for Twitter. Let’s see what Elon thinks.
The top two NFT collections by market capitalization are the Bored Ape Yacht Club and the Mutant Ape Yacht club with circa $4 Billion and $2+ Billion respectively. CryptoPunks is third approaching a market cap of $2 Billion. Followed by Clone X and Moonbirds.
CryptoPunks however, are more liquid as measured by all-time Volume probably because they are nearly 5yrs old. Their collection volume is close to $2.6 billion which is nearly double the volume of the Bored Ape Yacht Club (launched in 2021).
The cultural trend of NFT collections that can be used as Digital avatars is unstoppable and Twitter is well positioned to leverage the opportunity.
Twitter can become the social platform that enables mass crypto wallet adoption. Elon can simply send 1 Satoshi for a start to each Twitter user once the deal closes. That means around 400 million wallets will be opened and verified. The cost for him will be less than $200,000 . Who wouldn’t want to receive 1 Satoshi from Elon`s wallet!! Such a move would create a strong feeling of digital connection with Elon.
Elon can get rid of the annoying Twitter bots by making the crypto wallet verification mandatory. Stripe who is already working with Twitter for the Blue subscription service can help Twitter through its Stripe Connect service (for now only for USDC). Elon cares about the bot issue himself and hopefully, he will prioritize it over the edit button. He once said that if he had a dogecoin for every spambot and crypto scam he had come across, he would have at least a 100 billion Dogecoin portfolio.
Michael Saylor has been calling for a mandatory one-time fee of 1 Satoshi for opening any online or social account. This would solve the costly problem of DDoS attacks to businesses, agencies, and even governments (e.g. see Ukraine`s recent issues). Right now, bot attacks are relentless because they are free.
Elon can make this happen because he is comfortable with being provocative and can deal with the narratives from those that insist on a free for all internet.
I expect that Elon`s transformation of the Digital Twitter Square will include:
- Getting rid of the bots with crypto wallets and NFT verification (I hope this is his priority)
- Enabling new kinds of Digital communities via NFTs (maybe this will feel like the next generation of the Hashtag which was invented by Twitter)
- Introducing long-format content of various forms via NFTs
- New revenue streams for Twitter from network fees related to the various NFT capabilities.
For any of the above to happen, the acquisition must close. The $46.5 billion to buy Twitter, I must admit smells like a traditional leveraged buyout largely linked to Tesla stock. Here is the breakdown via Michael Jackson partner at Cottonwood Technology Fund:
— $500M revolver
— $6.5B term loan
— $3B secured bridge loan
— $3B unsecured bridge loan
— $12.5B margin loan
— $21B equity commitment from Musk
We all know that Elon Musk is cash poor and all of the above loans and credit lines ($25.5 B total) are solely linked to his Tesla equity holdings. The Tesla stock is trading at circa 180 P/E ratio (1year low) and has been traditionally a volatile tech stock. Elon owns 17% of Tesla stock which already dropped over 12% as the market sees a high probability that he may have to sell shares to fund the Twitter acquisition. Based on April 27th valuations, his holdings are worth $154 billion. Hold your breath as public stock markets similar to cryptocurrency prices are not predictable.
 Detailed stats on Twitter`s user base https://backlinko.com/twitter-users
 This does not include the cost of rolling out the technology for all users.
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