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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I know, I know … Just last week I said that I was going to slow the pace. Block & Mortar had hit 100 issues and the older, wiser newsletter was going to pull back from the First Thing Tuesday Morning releases. And yet here it is, in your inbox, first thing Tuesday morning. What gives?

It’s simple: when I made the decision to loosen up the schedule, I was well aware that newsletter #100 would land just two days before big news was due. This current phase of Block & Mortar is called “something particularly interesting has happened in web3; let’s talk about it.” And, well, something particularly interesting has happened in web3:

$400M per year

Sam Bankman-Fried, having been convicted in November for – ahem – losing $10B of customer funds, was sentenced last Thursday to twenty-five years.

That’s $400M per year, if you’re doing the math.

This sentence is five times what his legal team had offered up. It’s also half of what prosecutors had proposed, and a country mile from the century that was in the cards.

Some will quip that the sentence was too light. “Looks like April Fool’s day came a little early.” Others will cry “It’s not as though he killed anyone, right? It’s just crypto!” Then there are those who will compare SBF’s sentence to that of other convicted fraudsters, such as Bernie Madoff. The socially-minded crowd will point out that white-collar sentences live in a different universe. And so on, and so forth.

I’m sure there’s merit to all of those claims. But I see something bigger here. The take-home lesson for me is:

We, as a society, keep falling for fraudsters.

And as such, fraudsters are going to keep up the act.

I’ve read up on several cases of … shall we say … “business sketchiness” over the years. SBF’s FTX routine is cut from the same cloth as Wirecard, Theranos, the 1MDB scandal, and many more. Those involved know how to treat people’s minds as a stage, using a magic act so the audience lowers their guard.

And if they get caught, they simply … try it again.

I mean, SBF has already dropped hints at a repeat adventure.

He’s not alone. Prison doesn’t work on everyone the same way. Yes, there’s the running (half-)joke that prison is like grad school for criminals. But it runs deeper than that. There are certain people for whom a prison stint is a chance to recharge and plot their next move.

And, I dunno, I almost have to admire the single-minded determination of it all.

Almost.

So will this be the last we hear from SBF?

Unlikely. I imagine he’ll appeal. Even if that falls through he will probably be released early. (Double points if his “good behavior” includes hosting classes on math, probability, and game theory for fellow inmates.)

Will this be the last time a con artist whips a crowd into a frenzy and walks off with their money?

Well … hmmm …

Let’s just say: I can’t wait to see what we fall for next.

In other news …

• Over in Complex Machinery I’m talking about chatty connected cars and rogue chatbots. (That second one is poised to be an evergreen topic. Just ask anyone who lives in NYC.)
• Not everyone is happy with the Vision Pro. But perhaps some of them went in with very high expectations…?
• Bitcoin’s “Halving” leads groups to replace and/or relocate their mining rigs.
• Blockchain-based “play-to-earn” games were supposedly on their way out, thanks to Crypto Winter. But maybe they’re back?

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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