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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#86 – Shopping for visas, pixelated clothing, and some maybe-not-benefits

description: A close-up photo of a US passport. Two plastic figurines – people pushing luggage carts – are positioned on the page. Photo by mana5280 on Unsplash.

Hedging your bets

Do you have an extra million dollars burning a hole in your crypto wallet? Maybe you’re riding high on that recent Bitcoin price boost? Then El Salvador wants to talk to you.

The country has launched a visa program for the crypto set. Invest $1 million in tokens – Bitcoin or Tether – and get citizenship in return. There are one thousand slots on offer, meaning El Salvador stands to pull in a billion dollars in total.

That’s a billion dollars in present-day cryptocurrency prices. While Tether is a stablecoin pegged to the US dollar, Bitcoin’s price fluctuates. If the price goes up, El Salvador has the option to sell some tokens and get fiat money in return. If the price goes down, well … so what? I expect the visa’s actual cost to the state is a rounding error compared to the $1 million price tag. That means El Salvador can sell the Bitcoin at pretty much any price and still yield a profit.

Sum total: this is (near-)zero-risk a way for El Salvador to get exposure to Bitcoin. They don’t even have to set up mining infrastructure, like Bhutan did.

That’s a good deal for El Salvador on the sell side, then. What about the prospective citizens on the buy side?

If you loaded up Bitcoin back when it was worth pennies, well, a million dollars won’t set you back much. May as well grab that visa. And maybe a spare yacht or two.

If, on the other hand, you need to be a little more discerning with your digital wealth, consider that a variety of other crypto-for-visas programs exist. Most of them cost far less than what El Salvador is asking. Are you really going to put all of your crypto eggs into that one Salvadoran basket? Or will you spread that $1 million across multiple, cheaper visas? The latter option strikes me as a better hedge.

Maybe those prices reveal something about the various nations’ offers, though? Quoting the CoinTelegraph article I linked to earlier, El Salvador does offer some perks:

[C]rypto investors could be swayed to move to El Salvador due to the pro-Bitcoin policies enacted by President Nayib Bukele, which included recognizing Bitcoin as legal tender and scrapping income and capital gains taxes for tech companies investing in El Salvador for the next 15 years.

Not bad! But there’s also this:

Bukele has also attempted to stem El Salvador’s murder rate, which was one of the highest in the world when he took office in June 2019. His crackdown starting in March 2022, while successful, has seen 66,000 mostly arbitrary detentions and “grave human rights violations,” according to an April Amnesty International report.


Meta doesn’t sell these … yet

A pair of VR goggles allows you to fly over virtual terrain, slaughter pixelated zombies with your friends, and visit an art gallery. All while sitting on your couch.

These immersive activities are examples of simulations – synthetic environments where it’s safe to test ideas and practice working through situations. VR has gotten some traction in workplace training for this very reason.

Why should people get all the fun? Now we have tiny VR goggles for mice. Researchers have created a tiny set of VR goggles for lab mice. Before you think Meta and Apple are vying for that oh-so-hot rodent market, this isn’t for entertainment purposes. This is all for brain research.

(I’d prefer to think that this lab is really a front, and they’re secretly training the mice to serve as a tiny army. Just let me have this, OK?)

How soon till this kind of research involves human subjects? I imagine a wave of Stanley Milgram-inspired social experiments. But instead of working with actors, participants would interact with simulated environments through VR.

New ways to wear those pixels

Luxury fashion house Burberry now counts Hollywood stylist Kate Young as an advisor. Specifically, she’s helping them with digital platforms like Roblox and Second Life.

Digital goods are of growing interest across the entire fashion sector. It makes sense that Burberry would enlist a high-profile stylist to help them get a piece of that pie:

[T]he metaverse fashion economy is expanding. Metaverse revenue is slated to reach $400 billion by 2030, up from $48 billion last year, says analytics firm Globaldata. More than half of Gen Z users are willing to spend up to $10 each month styling their avatar, according to a Roblox study. In 2022, fashion items on Second Life alone generated more than $12 million, according to the company; in the first nine months of this year, Roblox users purchased 1.65 billion digital fashion items, which is up 15 per cent compared to last year.

Even if you’re not interested in fashion, I’d encourage you to check out the linked Vogue Business article. It offers some interesting thoughts about shifting into a digital world.

It’s as much about a change in mindset as a change in materials. Going digital is, writ large, an opportunity to re-think an entire process and product. Consider Young’s take on the matter:

There are no limits. If you want to make pants made of fire, you can. Designers don’t have to create with certain body types or income brackets in mind — they can create collections that cater to diverse avatar shapes at much more accessible price points. They don’t have to worry about sourcing certain fabrics — they can test any fabric imaginable and see how it falls on multiple consumers. This expanded definition of ‘target customer’ and freedom from the limitations of a traditional supply chain could supercharge a wave of innovation and experimentation for designers.

If you’re looking for more ideas, you’ll want to give Chris Anderson’s Free a read. He wrote this at the dawn of the digital goods era, when the focus was on “shipping” electronic books and music. The lessons still hold in this age of digital clothing and experiences.

NFTs Without Benefits™

Long-time readers are probably tired of hearing me mention NFTs With Benefits™ – you know, where an image on a blockchain doubles as a loyalty card or event ticket – but I still say it’s a solid web3 use case.

To balance out my enthusiasm, a Block & Mortar subscriber told me about a very different scenario:

There’s a … ahem … well-known former government official selling NFTs. Buy the entire set and you’ll get some perks, like a dinner with him and a bit of memorabilia.

Except that, y’know, you might not get dinner with him. Nor the aforementioned bit of memorabilia. Someone who read the fine print noticed:

[T]here’s a chance the cards’ purchaser never receives a physical card or piece of Trump’s suit at all.

“In the event the Bonus Physical Card cannot be fulfilled due to an issue in the manufacturing, production, or delivery on the Bonus Physical Cards, individuals who qualified for the Bonus Physical Card will be awarded a limited edition Trump NFT in lieu thereof, as determined by us in our sole discretion,” the terms and conditions say.

This sounds like one of those “buy one, get one free” promotions. But more like “buy one, get one.” Maybe even “buy one, get half.”

Why should crypto get all the fun?

There’s a story making the rounds. It’s about a hot-shot tech wiz who found himself leading a large financial operation. His company was later accused of fraud. And some money went missing. The tech wiz-turned-executive disappeared and hasn’t been seen since. The end.

While that could be a story about any number of crypto personalities, I’m actually talking about Jan Marsalek of Wirecard. The company was a player in the lending game (specifically, supply-chain finance) and briefly a symbol of German startup pride before it all came crashing down.

The next time someone gives you grief about crypto scams, then, you can remind them that Wirecard’s (alleged) fraud had no blockchain roots.

Oh, and if you’d like the full Wirecard story, I highly recommend Dan McCrum’s Money Men.

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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