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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Many of you are still digging your way out of your post-holiday inbox. So I’m keeping the newsletter light this time around: three short segments and just one minor ramble.
(For readers who aren’t based in the US: technically the holiday was just one day – last Thursday – but a lot of people mentally checked-out of the office earlier in the week. And then Thursday night was the start of our Season of Extreme Consumerism. If you’re having trouble reaching your American counterparts, this is why.)
Risk is a fascinating subject. That’s why I read Ed Harrison’s work. He launched his solo website Credit Writedowns in time for the 2008 financial crisis, then created the Bloomberg newsletter The Everything Risk earlier this year.
Last Tuesday, Harrison’s newsletter explored the FTX meltdown through the lens of historical embezzlements and what this means for the wider crypto space. Frankly, it’s one of the more even-keeled, dispassionate write-ups I’ve seen on this topic.
I won’t spoil it for you. But I think you’ll enjoy the read.
Continuing last week’s session of What You Say When You Are Clearly Not Listening To Legal Counsel, Sam Bankman-Fried has allegedly sent a letter to his former FTX teammates in an attempt to explain how everything fell apart.
(Will this letter be a key plot point in the various film adaptations of the SBF/FTX story? I can’t wait to not watch those.)
Sam’s letter feels a bit… lacking in places. So Quartz’s Zachary M. Seward went on an extended rendition of the “there I fixed it for you” meme format.
I won’t quote any of it here. It’s more of a visual.
I’ll just say: A+; no notes.
Last week I’d prepped, and then cut, a newsletter segment on how the Australian Securities Exchange (ASX) had scrapped a big blockchain project. A couple of days later some friends sent me a link to Tim Bray’s blog post on the same topic.
It’s a great writeup and I’d encourage you to read it in full. As a preview: Bray used to work in Amazon’s cloud computing division (AWS). He’d been running all over hell’s half-acre, on a mission from his boss to uncover blockchain use cases. At least for the clients he met, there wasn’t much to report.
Years later, Bray still doesn’t see much.
I can empathize. Much of my work these days is in the realm of machine learning and artificial intelligence (ML/AI). I, as well as many of my colleagues in this space, can tell a version of Bray’s story:
A company reaches out because they want to do something with AI. (Great. I’m all ears.)
They haven’t really sorted out what, in particular, AI will do for them. (Also great. The fun part of my job involves explaining AI to people and helping them uncover use cases. Count me in.)
Annnnnd they have already made up their mind that they will definitely use AI. (Hmmm.)
That last step is where so many companies get into trouble. The minute you have decided to use the ill-defined thing, you have committed yourself to The Unknown. That way lies tears. Tears and smoldering stacks of money.
(Want to see something funny? Find someone who worked in the data science space, say, 2011 to 2015. Whisper “Hadoop” in their ear. Trust me.)
So, yes, I generally agree with Bray’s blog post.
Yes, and …
… and that’s the thing with emerging tech:
There’s always a use case. It’s rarely as big as the die-hard fans say it will be, and it doesn’t always take the exact shape the true believers expect. But every technology fits somewhere.
There’s always hype. Hype is a fog that obscures the truly valuable use cases. Hype makes it easier for companies to hang their hopes on this new, amorphous silver bullet. Since no one can articulate what the thing actually does, that means it can do anything.
Use cases and hype. It’s a package deal.
And this is why working in tech can be difficult. It requires you to be two people at once:
One person to stay grounded, such that the company doesn’t follow some vendor off into the woods.
Another person to keep an eye out for The Possible. They will view the world through the lens of The New Thing, and see what crops up.
My hope is that you don’t walk away from Bray’s post thinking that blockchain has zero value. (He even says, “I’m not prepared to say that no blockchain-based system will ever be useful for anything.”)
What will be blockchain’s winner use cases, then? I expect they will be based on the idea of distributed trust: cases when multiple parties need to verify the same data, but can’t (or won’t) rely on one party to run the central data store. Think “supply chain” or “the energy sector” or maybe even “airline loyalty programs that need to track passenger activity across code-share flights.” Whether these pan out remains to be seen. But at least the core needs overlap with what blockchain provides.
The take-away lesson: the sin is not in adopting the new technology. The sin is assuming that it will be useful before you’ve done any homework.
Heading out for a nice autumn stroll? Trying to forget your uncle’s political hot takes from Thanksgiving dinner? I have you covered for about an hour:
This week The Defiant podcast hosted an interview with Bogdan Alexandrescu, co-founder and VP of engineering at SAGA. Alexandrescu’s company makes tooling and infrastructure for web3 projects.
In this interview he explores the importance of developing free, decentralized infrastructure and his take on what counts as “web3.”
(I am a little biased, because his views on what “the metaverse” means very closely align with mine. Hint: they’re similar to my views on what “AI” means.)
Have you heard any interesting web3 podcast episodes lately? Any series you’d recommend? Let me know.
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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