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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Welcome to the April media roundup! This month’s podcasts go deeper into stories I’ve covered in past segments. I think you’ll enjoy the extra details.
Also, welcome to newsletter #52: Block & Mortar has completed its first year of publication! Whether you’re a longtime subscriber, or you’ve just joined, I appreciate you coming with me on this journey.
(Listening time: 4h, spread across five episodes)
To operate a scam is to run a race against a system destined to collapse. Scammers know this, because they’re the ones who propped it up in the first place. Their bluster and dishonesty are why this rickety machine appears functional, and why it defies the laws of physics long enough for them to run off with the money.
Maybe this is why I enjoy exploring scams (and their cousins, asset bubbles)? It’s one thing to map out a process that was meant to last. Quite another to reverse-engineer something that teeters on the edge of reality. The real fun? Identifying what I call the “FAFO inflection point: the precise moment when when the “f*k around” ends and you start down the path of “find out.”
While that could describe any crypto crash, I’m talking about the Terra/Luna meltdown from last year. The one where yet another algorithmic (not-so-)stablecoin entered a death spiral and wiped out $40B in wealth. This story entered a new chapter when its primary auteur, Do Kwon, was arrested last month.
Even though I was already familiar with the technical side of the story, the Crypto Crooks “Lunacy” arc provided a lot more detail on the Terra and Luna tokens, Terraform Labs, and Do Kwon himself. Fellow students of financial history will appreciate episode 3, in which host David Z. Morris draws a connection between algorithmic stablecoins, George Soros’s 1992 move against the Pound, and perpetual-motion scams from the days of yore.
“Lunacy” is a harsh reminder that we have always fallen for blowhard con artists. And we always will.
But what about the scammers-in-founders’-clothing themselves? The money is just a bonus to them; what they really crave is the adventure. Whether it’s slipping past the individual intelligence of investors (say what you will about some of their crazier moments; they are not gullible people) or overcoming the collective intelligence of the masses (by swaying them with self-confidence), the big-time fraudsters are chasing the high that comes from narrowly avoiding detection. Every day, they get to look in the mirror and say: “I’m so smart. I get through this world on pure brainpower.”
So we can nod approvingly when crypto con artists face the justice system. Sure. Let’s also remember the key lesson about FAFO: while the FO part really hurts, the FA part is a hell of a fun ride.
(Listening time: 1h15)
Sharp-eyed readers will ask me, “hey didn’t you mention the a16z State of Crypto report last week?”
Yes. I did.
“So aren’t you cheating by pointing to the official a16z crypto podcast on that very same report?”
I bet some subscribers didn’t have time to review the 60-page deck. Others needed more context on what they saw. And then there are the folks who figured it’d be dangerous to read the report while driving. So the podcast gets extra points for safety.
When you’re not behind the wheel, be sure to check out the show notes. There are links to the articles and books that the participants mention.
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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