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#65 - Media roundup July 2023

Description: Image of a microphone (in focus), with a computer screen in the background (blurry).  Photo by Will Francis on Unsplash.

(Photo by Will Francis on Unsplash)

Leverage. Complexity. Rigidity.

Odd Lots: What Ben McKenzie Learned When He Started Investigating Crypto

(Listening time: 1hr)

TV viewers will recognize Ben McKenzie as an actor on Gotham and The OC. Some university profs remember him as a guy who got an econ degree before going off to Hollywood. Now everybody knows him as an author and crypto researcher.

McKenzie’s interest in crypto started as pandemic boredom. Several rabbit-holes later, he joined up with journalist Jacob Silverman and the pair wrote Easy Money: Cryptocurrency, Casino Capitalism, and The Golden Age of Fraud. This episode of Odd Lots is an interview with McKenzie about the book and his take on all things crypto.

That’s right: while you were off making sourdough starters or hoarding toilet paper, McKenzie was writing a book. We all need to step up our game.

Two points from this interview stand out for me. The first is when McKenzie notes Bitcoin became popular precisely because it was poorly understood. Since it could be anything, people could hang any kind of hopes on it, so the fan base came from all walks of life. (For a similar story of popular-because-it’s-ill-defined, see AI.)

The second is McKenzie’s description of crypto meltdowns. I’ll spare you the full excerpt. Just know that it’s the source of this segment’s title. It all starts around the 15mn mark, when he describes testifying before congress with Professor Hillary Allen.

Humans gonna human

Money Reimagined: The Ascendance and Decline of SBF With Brady Dale: Exploring Our Innate Tribal Nature and the Necessity of Leadership

(Listening time: 45mn)

Every asset bubble starts with a flawed belief. Sometimes a crowd has fooled itself into believing in some Hot New (Soon-To-Be-Doomed) Trend. Other times, a local Pied Piper is leading that crowd down a bad road.

I thought about this while listening to the Money Reimagined interview with Brady Dale, author of SBF: How The FTX Bankruptcy Unwound Crypto’s Very Bad Good Guy. The book’s title gives you a hint as to Dale’s views on FTX’s former CEO, yes. But this interview isn’t just a dig on SBF; Dale explains why, as a society, we keep falling for the confident-yet-clearly-flawed person who ultimately betrays us.

Dale also shares his thoughts on the Effective Altruism movement (of which SBF was an adherent), why Dogecoin counts as an NFT, and how “the intentions of a [crypto project] creator are largely irrelevant.” The project can take on a life of its own and do things that the creator had never even considered. As summarized by host Sheila Warren: “humans gonna human.”

What we can learn from a vending machine

Law of Code: #104 - Wachtell Lipton’s David Adlerstein and Kevin Schwartz on Decentralization, Smart Contracts, Tornado Cash & NFTs

(Listening time: 1hr15)

Podcast guests David Adlerstein and Kevin Schwartz are attorneys at Wachtell Lipton, the law firm representing Coinbase in its … um … “complicated relationship” with the SEC.

While the pair don’t comment on the Coinbase case, it’s clear that they and their colleagues understand crypto and have a genuine interest in the topic. Just be careful how you describe their practice area. Adlerstein is quick to point out that, in his view, “there is no such thing as ‘crypto law,’ per se. Rather you have traditional legal disciplines, implicated by the many issues that this new field poses.”

Schwartz and Adlerstein are frustrated with the crypto field because it keeps re-learning why certain financial regulations exist. (I think they gloss over the wider point: lack of these laws is precisely what attracts some bad actors. They have a much easier time scamming people in a lawless space.)

The pair also explore the value of privacy in financial transactions versus the state’s desire to stop bad actors; compare smart contracts and legal documents; and explain how a vending machine represents a simple form of smart contract.

For more thoughts on the intersection of law and crypto, you can catch Adlerstein on the GBBC International Journal of Blockchain Law (IJBL) series “Hot Topics in Blockchain Law.”

The tourists are gone. Let’s party.

The Scoop: How AI can breathe fresh life into Web3 gaming

(Listening time: 45mn)

Crypto-themed investment is shrinking. According to Moritz Baier-Lentz (Lightspeed) and Sam Harrison (Faction) that’s actually a good thing. It means that the “tourists” are leaving the space.

Baier-Lentz and Harrison share a wealth of information on building products that will scale into “forever games that have platform-like dynamics.” For example: while it seems logical to hire web3 experts to build a web3 game, they’ve found it better to start with professional game developers and figure out how to layer in the blockchain functionality later on. They go on to explain players’ interests in paying for in-game cosmetic tweaks, and why this beats the tempting-yet-deadly practice of pay-to-win features. Game publishers, take note: relinquishing a bit of control to players (such as true ownership of game assets) can help you win in the long run.

Despite the title, this episode makes only a small mention of AI. But it’s a rather interesting one.

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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