Welcome to the Block & Mortar newsletter! Every week, I bring you the top stories and my analysis on where business meets web3: blockchain, cryptocurrencies, NFTs, and metaverse. Brought to you by Q McCallum.

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Joining the century club

Block & Mortar has turned 100!

Looking back on the preceding 99 weeks, this newsletter has covered a lot of ground:

It all started with the more innocent days of the Otherside land grab and Crypto Bahamas.

A week later, there was the great Terra/Luna fallout. That event kicked off Do Kwon’s Extended Period Of Definitely Not Hiding From The Law, which ended with his arrest in March 2023 in Montenegro.

For a few months we had the rise and fall – mostly, “fall” – of FTX, and the trial of its founder, Sam Bankman-Fried. It took just five hours to reach a verdict. Any chance his sentence will be similarly short?

We’ve walked through plenty of use cases, seeing how the elements of the web3 layer cake have applied to fashion, loyalty programs, and more. Part of that “more” is “crime,” but I’m going to conveniently forget about that.

Oh yes, and Worldcoin scanned a few eyeballs. It was then told by a few governments to, y’know, stop scanning eyeballs.

What’s in store for Block & Mortar’s second century? I look forward to providing:

• The same analysis of web3, in a mix of segments and short essays.
• The same reviews of podcasts and other media.
• The same snark measured, respectful tone when describing the absolutely ridiculous events of this space.

Frankly, the only thing that’ll change is the pace. Block & Mortar’s first 100 issues were delivered Every Tuesday, Usually First Thing In The Morning, Rain Or Shine. The older, wiser newsletter is shifting to Every Two Or Three Weeks Or So.

Some of you are already feeling withdrawal symptoms. Fear not. If you crave additional doses of my writing, I can also offer:

• Complex Machinery – my newsletter on risk, AI, and related topics.
• My occasional think-pieces on O’Reilly Radar – which cover everything from AI to web3 to marketplaces, and pretty much anything else on my mind.
• My main blog. These days it’s mostly recaps of the past week’s AI news. That should get back to normal – as in, “actual blog posts” – as Complex Machinery finds its stride. (In the meantime, execs and product owners will find the archive of data/AI literacy posts useful.)

There are some other projects in the works, but I can’t talk about those just yet. Stay tuned.

Replaying the collapse

Brazen: Crypto Kingpins (series)

(Runtime: about 6hr over eight episodes)

Before you say it, I’ll say it for you: “another podcast about SBF and the fall of FTX? Really??”

That was my initial reaction. Crypto Kingpins covers well-trod territory. And it’s probably unhealthy to keep replaying this series of events. Then again… it’s interesting. And done well. I was familiar with other Brazen podcasts and knew the company put out quality material. So I gave it a go.

I don’t regret it.

Crypto Kingpins weaves interviews with FTX’s SBF and Binance’s Changpeng “CZ” Zhao, plus people who were involved in their respective firms, to show their rise to power and how each played a role in the other’s downfall. More than that, it points out ways in which SBF allegedly set up other people for failure in order to protect his own interests. That would come back to bite him.

The series is not without its faults. Many of which, I’d wager, are extra drama for the benefit of Brazen’s target audience of the Mainstream True-Crime Listener. You’ll want to ignore the sensationalism and tropes. Briefly tune out when the host points out that SBF and CZ had both worked in tradfi and – surprise, surprise – were more interested in getting rich than creating a new monetary system through crypto. Things like that.

Instead, focus on the interviews with CZ and Sam. Focus on just how much FTX’s rise and fall stemmed from a feud between these two. As I’ve often noted, ego is expensive. It deserves its own line item in the balance sheet.

And when you get to the part about Sam’s trial, remember another key lesson: crime works better when you bring everyone along. He clearly missed that page in the prisoner’s dilemma.

In picking fights with CZ (after Binance had invested in FTX, no less) and allegedly setting up Caroline Ellison for Alameda’s fall, Sam made more enemies than he could afford once his fortunes shifted. He went from a plan of Last Man Standing to Last Man Standing In The Dock.

Crypto Kingpins was released after the start of the SBF trial, but before the verdict. And before CZ had struck his deal with US regulators. Two bonus episodes dropped between those last events. I bet there’ll be another bonus episode after SBF’s sentencing hearing later this week.

This piece of paper will be worth a million dollars someday

The Defiant: Accidentally Airdropping $300 Million: NFT OG Jason Bailey

(Runtime: 1hr)

Partway through this interview, guest Jason Bailey mentioned something that most NFT holders don’t think about:

Without intervention, almost all NFTs will break.

That’s not hyperbole. Yes, when you purchase an NFT, that goes into your wallet. But what goes into your wallet? Just the record of the transaction; not the item itself. The image you bought almost never lives on the blockchain. Someone has to find some other place (usually, IPFS) to put it and then associate that image with the blockchain entry. If the underlying blockchain shuts down, or if the storage service for the image goes belly-up … poof.

That’s the problem Bailey set out to solve with ClubNFT. But this interview is not a pitch for his company. It’s mostly a story of how Bailey, an art student who wound up in tech, saw the potential for NFTs before the term “NFT” had been coined. In fact, he wound up giving away NFTs (well, “in-person air-dropping paper wallets pre-loaded with digital art”) to “traditional” art collectors who mostly threw them away. Which is too bad, because those pieces of free conference swag were later valued at $1M or more. Apiece. Oops.

That story may or may not play into his thoughts on the integration and acceptance of digital art into the wider art world. I’ll let the listeners decide.

Crypto, there to help AI

"AI + Crypto: It’s Time To Pay Attention"

(Runtime: 12mn)

I keep hearing how AI and blockchain are just a natural pair. Peas in a pod. Hand-in-glove. Crypto is, apparently, the perfect cure for AI’s ills.

I’m not sure I believe that. But this video, which walks through several AI-related crypto projects, is certainly food for thought.

The wrap-up

This was an issue of Block & Mortar.

Who’s behind Block & Mortar? I'm Q McCallum. I've spent the past two decades in the emerging-tech space. And I'm very interested in web3 use cases.

Credit where it's due. Big thanks to Shane Glynn for reviewing early drafts. Any mistakes that remain are mine.

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