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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It’s been a year.
I mean, web3 has certainly been around for much longer than that. Sure. But I’ve been publishing a web3 newsletter for a year. I picked a hell of a time to get started.
First there was the Otherside land rush. Then, the fallout from that land rush. Plus the Terra/Luna meltdown. That was just the first three weeks!
The months that followed taught me a ton about the mechanics and use cases of blockchain, cryptocurrencies, and NFTs. (Especially NFTs With Benefits.) That included supply chains, loyalty programs, and event ticketing. Not to mention virtual clothing and digital twins. While I didn’t find the killer app for web3, I did develop a hunch as to how it may come about.
There was also plenty of crime. Rug pulls, phishing attacks, hacks, and (very strong allegations of) outright theft of billions of dollars. I came to understand that blockchain is permissionless (generating a wallet doesn’t require KYC/AML checks) but it’s still not anonymous (so a determined investigator has a decent chance of tracing a transaction). Some folks missed the lesson that you shouldn’t talk to journalists when your company’s just fallen apart. Others learned the hard way that you can’t run forever. And the guy who handled the Enron restructuring found out that he could still be surprised.
I saw VC investment enter the system. Then leave the system, to chase AI again. And then quietly re-enter the system, for some infrastructure plays.
Speaking of quiet, let’s not forget the companies that adopted a web3 backend while avoiding terms like “blockchain” and “NFT”. Maybe they didn’t want to be associated with crypto meltdowns and crime. Or maybe they wanted to focus on the product experience, without throwing tech buzzwords at their customers. Either way.
That was just one year, folks. May 2022 to May 2023.
What are the chances that my May 2024 retrospective will be anywhere near as exciting?
Remember Crypto Winter™? That one-two punch of investors abandoning the space while token prices tanked?
Apparently, it’s now over. And Bitcoin is poised to hit $100k. (At least according to some people.) That feels a bit of a stretch for a token that’s just barely cracked $30k (again). But, well, weirder things have happened in this space.
(Image credit: Google Finance, BTC/USD 1-year as of 2023/05/01 )
As long as there have been machines, there have been concerns about machines taking human jobs. “Automation eats work” has been a recurring theme in my career. Especially my last 15 years in what we now call AI, as those systems can handle more nuance than the
if/then statements of straight-ahead software.
Most recently, generative AI systems like ChatGPT have pushed this to the forefront. Every other headline I see – OK, I won’t exaggerate; it’s every third headline – is about people getting the chatbot to do their work.
And that’s been an interesting twist. Throughout history, when automation has replaced people in the workplace, the employers owned the machines. Now, with ChatGPT? It’s available to anyone with a computer.
This is why most of the ChatGPT articles I’ve seen have been written by people showing how they are using ChatGPT to do their job. (And the boss doesn’t know.) Some people allegedly use the thing to hold down multiple full-time roles.
The next level up occurs when the person is the company, and they are in control of deploying technology to automate themselves. That’s the case for model Eva Herzigová, who is creating a digital twin of herself:
“It’s not about freezing my image or trying to be younger — that has never crossed my mind,” Herzigová says, from a hotel room in New York, after a photoshoot. Rather, a key motivation was connecting with a new generation, while being more efficient with her time. “I am still working, but maybe this will permit me to stay home with the kids and not have to travel and be away. But, I really don’t know — it is a big question mark where this is going to go.”
(The time efficiency – the ability for her to “be” in multiple photo shoots at once – is key. Technology is a force multiplier that way.)
Block & Mortar covered a twist on this, in a segment on virtual brand ambassadors. But that was a story of humans lending their faces to digital modeling projects – and the modeling agency in question was attaching those faces to new, fabricated backstories.
Herzigová’s is quite a different arrangement. Her digital doppelgänger will really be a substitute for her. A specific person. One whose business is based on her likeness, yes; but people want that likeness because of the real person behind it. She is the brand, and the asset, and the owner. And now that she’s able to replicate herself, those clones can work even when she is unable. Or uninterested in appearing in-person. Or when the price of the real Herzigová is out of reach.
In turn, that opens up a variety of legal and ethical questions. Some of which are briefly mentioned in the Vogue Business piece I quoted above.
As long as we’re on the topic of legal and ethical issues around digital twins, let’s remind ourselves that there is a right way and wrong way to go about this.
A person digitizing their own likeness, to send on virtual photo shoots? Good.
Using an AI chatbot to simulate an interview because the person in question won’t talk to you? Bad. Very bad. And, per the title of an Ubermedien piece: “Zu dumm, um wahr zu sein”: “Too stupid to be true.”
[…] with the goal of also fostering community, loyalty and rewards. […T]he release of TIMEPieces marks the first time a major media brand has taken on a Web3 approach toward building community and using this technology as an innovative extension of our current Digital Subscription efforts.
I mention this now because Time Magazine will drop the paywall on its website in June of this year, in favor of an ad-supported model.
What does this mean for the holders of TIMEPieces? Opening up the website for free will eliminate one perk of the NFTs. Then again, per the 2021 announcement:
Owners of TIMEPieces will be able to connect their Digital Wallets to our site and receive unlimited access to TIME.com through TIME’s 100th Anniversary in 2023*.*
People who read the fine print would certainly have known that some kind of change was coming this year. So there’s that.
Since the Time folks knew that the subscription perk was coming to an end, I expect that they had already planned what to offer in its stead. This is their chance to expand and evolve the TIMEPieces benefits, which already include:
…exclusive invites to some of our future, in-person events and access to a variety of exclusive digital experiences. We will also be offering additional opportunities to owners of multiple pieces.
If your business offers NFTs With Benefits, keep an eye on Time as they navigate this change. I’m confident they’ll maintain the commitment to utility and community, keeping things interesting for holders. And holders’ views of those changes will be reflected in the prices of those NFTs on the open market.
Advertising’s a funny game. You
spam contact hundreds of thousands of inboxes and cry victory when more than two percent of recipients give you the thumbs-up. Simple math tells us that 98% of recipients weren’t happy to hear from you.
(As an AI practitioner, I’m supposed to tell you that data-driven targeting has turned advertising into a precision affair. But it has not.)
Advertisers will go to great lengths to improve that response rate by looking for curated lists of people. Some will even buy an outright fraud innovative startup in order to get access to a few million obviously fake totally legitimate e-mail addresses.
(Others will establish a data-harvesting operation under the guise of being a social network, and then accidentally damage democracy along the way. But I digress.)
Maybe startup EtherMail has a solution that will make everyone happy?
EtherMail features a platform called the “Paywall,” where users are able to define what kind of content they’re willing to read in exchange for rewards. Advertisers, on the other hand, have to pay in order to be able to access a user’s inbox. This provides the double bonus of rewarding users while also further protecting against spam.
I think this is worth a try. The end-users’ self-selection tackles the one side of the ad marketplace, which is “what does the person behind this e-mail address want to hear about?” The Paywall system addresses the other side, “I really need something in return for my attention.”
You remember Otherside, right? The metaverse property that was announced last March? And clobbered the Ethereum blockchain during its initial land sales that May? It then faded into obscurity, leading me to make the occasional “where is it?” crack in this newsletter.
Otherside parent company Yuga Labs (also birthplace of the Bored Ape Yacht Club NFT collection) has a new CEO. You may recognize Daniel Alegre’s name from that tiny, tiny gaming company called Activision Blizzard.
Two sentences stood out in the Bloomberg coverage of Alegre’s move:
The company, whose 100 employees all work remotely, began its expansion into video games last year, developing time-limited titles such as Dookey Dash and in the background, its own virtual world called Otherside. Growing the latter has been an area of focus for Yuga since Alegre joined, he said, as part of a shift toward a blockchain-based version of the internet known as web3.
I think we know what this means.
Start the clocks, everyone. Otherside’s finally happening.
(OK, this could actually mean any number of things. But it’s more fun to think about a proper Otherside launch. Just let me have this, OK?)
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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