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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#48 - Media roundup: March 2023

It’s the end of the month! (Well, almost.) So that means it’s time for a rundown of the web3 podcasts I’ve enjoyed over the last few weeks.

February’s roundup leaned into web3 gaming. This time around, it’s more of a grab bag.

Using AI to price NFTs

Web3 Breakdowns: Algorithms We Live By

(Listening time: 1hr)

Podcast guest Nikolai Yakovenko honed his ML/AI skills working at Google and Twitter before moving into finance. The first half of the episode is his primer on how AI works. Yakovenko’s take aligns with my experience in that field. I encourage you to listen to his version so you don’t have to sit through all of my ramblings on the subject…

Around the 34:00 mark, the discussion shifts to using AI to price NFTs. Yakovenko provides his thoughts on how to approach this sort of project, and describes some benefits of pricing digital goods over physical objects. One key perk: you don’t exactly have to kick the tires on an NFT to make sure it still works.

As the episode wraps up, Yakovenko talks a fair amount about how to value NFTs in general. And while he doesn’t outright say it, it’s clear that it’s wise to develop domain knowledge even if (or, “precisely because”) you’re pricing without a model.

Given his career trajectory, I can see why Yakovenko launched a company to price digital goods. They’re somewhat similar to stocks, in that their prices change over time and their ownership changes hands electronically. If you treat “one company’s stock” as a single unit, and “a bunch of companies in the same sector” as a collection, then the NFT connection is a little stronger.

(And, before you ask: no, that was not me weighing in on the “are NFTs securities?” debate. Just pointing out that there are some similarities.)

The shape of trust

Reimagining the Internet: Why Would People Trust Crypto? with Finn Brunton and Molly White (Trust episode 2)

(Listening time: 40mn)

People often describe cryptocurrency as a “trustless” medium. I prefer to say that it “automates trust” because it relies on code to manage the sticky bits of interacting with strangers online.

Still, I acknowledge, my framing is incomplete. There is no absolute trust; only tradeoffs. Choosing which part of a system to trust usually boils down to what matters most to us and where we perceive meaningful risks.

Or, as this episode of Reimaging the Internet points out:

Crypto forces us to ask: what shape does our lack of trust take?

The first interview is with Finn Brunton, university professor and author of Digital Cash: The Unknown History of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency. In addition to a brief history of digital currency, Brunton shares stories of the original darkweb site Silk Road. Sellers mostly provided good merchandise and buyers mostly paid for their goods, which made Silk Road surprisingly trustworthy for a site that dealt in illicit goods.

The second interview is with crypto writer Molly White, If you like Block & Mortar’s Things Go Wrong™ segment, you’ll definitely enjoy her website Web3 Is Going Great.

White opens with a solid explanation of stablecoins. (It’s a far better, and shorter, summary than my usual. So if you haven’t already read my take, stick with hers.)

She then looks into what it means to trust others with this “trustless” currency – where those so-called others are Community Members In A Reddit Group Or Discord Channel as well as Established, Registered Financial Institutions That You Would Rightfully Believe To Be Real And On The Up-And-Up.

Trust, indeed.

Out there, in plain sight

Unchained: Have Crypto Detectives Killed the Cypherpunk Dream? - Ep. 461

(Listening time: 1h15)

A cryptocurrency “account” is really a string of numbers we call a wallet address. Setting one up doesn’t require any central authority to perform know-your-customer (KYC) checks and verify your identity. It’s easy to see why so many people have mistakenly believed crypto to be anonymous.

In his book Tracers in the Dark, author Andy Greenberg points out that people – criminals, especially – have learned the hard way that “no KYC” is not the same as true “anonymity.” Use of cryptocurrency just transfers the role of the centralized bank to the decentralized, publicly-viewable blockchain. And with that, it only takes time and data analysis to uncover the entities involved in a transaction.

In the first half of the interview, Greenberg shares some vignettes on how investigators have unraveled criminal transactions on the dark web. The second half digs deeper into the double-edged sword of privacy in transactions and the ethics of blockchain analysis companies. (One could argue, they aren’t so much “breaking” or “reversing” blockchain user security as much as they are putting a visualization layer on information that is already public.)

Greenberg also highlights the irony that, as far as we know, the only Bitcoin user to have retained true anonymity is the person (or people) who created Bitcoin in the first place: the pseudonymous “Satoshi Nakamoto.”

So, per the episode’s title: have crypto detectives killed the cypherpunk dream? Or was it ever alive to begin with?

“Permissionless” cuts both ways

Empire: Ordinals Will Spark Bitcoin’s Application Era | Muneeb Ali

(Listening time: 40mn)

Muneeb Ali is the founder of Stacks, a group building smart contracts on the Bitcoin blockchain. He was also the very first guest on the Empire podcast. For his return appearance, Ali drops by to discuss the (sort-of-)NFTs-on-Bitcoin project called Ordinals.

Ali notes that Ordinals has brought a lot of attention to Bitcoin. It has roused dormant coin holders, sparked outside interest, and convinced developers to start building on this blockchain again. I’ve noted before that this attention frustrates the so-called Bitcoin maximalists, because they believe that Bitcoin should have a very narrow purpose. One that does not include anything remotely NFT-like.

To that point, Ali reminds us that crypto being “permissionless” cuts both ways. The maximalists may be the loudest voices on social media and such, he says, but they don’t have absolute control over Bitcoin. Ordinals is poised to move ahead without their say-so..

Stick around till the end of the episode to hear Ali’s take on how the Bitcoin ecosystem might look like a year from now.

The home for your identity

The Defiant: Unstoppable Domains’ Matthew Gould Unpacks Digital Identity in Web3

(Listening time: 45mn)

A web2 internet domain name is a convenient, human-readable identifier that spares you from having to memorize some company’s IP address. A web3 blockchain domain is the same deal, but for a crypto wallet address. Why risk fat-fingering a destination wallet address (or falling for an address poisoning scam) when you can just send tokens to Your Friend’s Name dot Eth?

Matthew Gould, founder and CEO of web3 domain registrar Unstoppable Domains, joins host Camila Russo in this episode to describe how registering a blockchain domain can help an individual establish and manage their digital identity (while still maintaining privacy). And since blockchain domains are intended for individuals – as opposed to web2 domains, which are mostly for businesses – that makes for a market of billions of users.

Gould also shares his experience growing Unstoppable Domains to three million users, the company’s brand protection program (to manage domain squatting), and how they plan to make money on identity-related services.

So is this fun, or is it just work?

The Defiant: GameFi is just getting started

(Listening time: 6m)

This video clocks in at just six minutes. You definitely have the time to watch. Or listen, if that’s more your style.

In short:

Gamification meets finance.

What could possibly go wrong?

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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