First came the internet, and the opportunity for anyone to be able to publish content on websites. Then came Web2, and the rise of Silicon Valley giants like Google and Facebook, which provided a means for creators to attract audiences and monetize them.
Now we are on the cusp of Web3, a decentralized online ecosystem built largely on blockchain. What that means for creators is freedom from corporate policies and whims and ownership over the value they produce. In fact, proponents argue that the shift could be nothing short of revolutionary. Here’s a brief explanation of what they are talking about.
The Silicon Valley companies that defined the Web2 era all followed more or less the same playbook. Imposing order on the initial chaos of the internet, they sought out first-mover advantage, they captured as much of the market as possible, and they rode the network effects they generated.
Eventually, users needed the platforms more than the platforms needed them. Creators stayed out of fear of losing the followings they amassed. Their audiences stayed in order to access content from their favorite creators. The feedback loop concentrated power, and allowed the corporation to wield almost total control over the market, crushing competition and forcing creators to live with whatever its terms were.
I call this the “platform capture effect.” Here is a simple illustration of the concept:
Blockchain has the potential to radically change this dynamic. It provides a structure where creators can establish a unique identity that they can use across platforms. In other words, you will be able to take your audiences with you. Imagine the possibilities.
We took a close look at different types of creators to see how specifically their relationships with platforms would change in Web3.
YouTubers, TikTokers, and other video creators
You will be able to raise money by using your ad revenue as collateral: YouTubers and TikTokers sit on top of proven passive income-generating assets with their videos. However, they are unable to use them to raise capital because the revenue is not recognized as legitimate collateral by financial institutions. Thanks to social tokens, video performers would be able to raise money through crowdfunding and offer investment vehicles to fans and investors.
You won’t have to worry about arbitrary content restrictions:. When the coronavirus broke out, social media platforms immediately set out to censor and deplatform any creator who suggested the virus escaped from a Chinese laboratory — under the assumption that the theory was being espoused as a form of anti-Asian hatred. Commendable though their motives were, the platforms clamped down too hard and too soon. It turned out the lab leak idea wasn’t merely a conspiracy theory. The World Health Organization found some credibility to it, and noted that it was a plausible hypothesis.
Currently, there can be a heavy cost incurred by creators who advance an unpopular idea. Again, while the intention of platforms “canceling” popular accounts when there is public uproar is often good (to stamp out hate speech, for instance), the effect can chill worthy intellectual discourse.
"Decentralized platforms, owned by their contributors, by and large have economic incentives to preserve content that advances the community as a whole, however it defines success."
The combination of crowdsourcing of ideas and the transparency of the blockchain can do a better job of sorting hate and misinformation from valid theories than a media platform cherry-picking what content to suppress. On decentralized curated spaces, an ecosystem of platforms where inputs are validated in a distributed fashion will ensure that creators’ contributions are not pulled down on a whim, or based on a faulty assumption. On the blockchain itself, data cannot be removed (though it is not easily discoverable without curation).
Decentralized platforms, owned by their contributors, by and large have economic incentives to preserve content that advances the community as a whole, however it defines success.
You can be judged on your work, not your appearance or demographics: Although the current iteration of the internet allows for anonymity, Web3 can enhance those protections — while allowing you to develop and maintain a following. You are also able to operate multiple pseudonyms as a creator the same way a media company can own multiple brands. The bottom line is that you can associate a unique, readable textual identifier with your economic activity.
In Web3, you can receive payments on a crypto wallet that no database can link to your name. If you convert it to fiat, it is possible to identify you, but not if you use cryptocurrency only. You can be a fully pseudonymous creator in Web3 (even to platforms, that is) and turn a profit from your craft.
Being anonymous doesn’t mean you won’t be able to have a presence audiences can connect with. Today, there are technologies that transpose your body language and facial expressions to an avatar (an upgraded version of animated emojis). Video makers can thus use NFTs to maintain pseudonymity even with a visual identity. Web3 pseudonymity enables free speech within agreed-upon social contracts with curated platforms while protecting your economic livelihood.
You won’t be at the mercy of algorithms: Decentralization can allow you to unleash your creative freedom from algorithmic pressures. The curation and discovery mechanisms in Web2 platforms are a one-size-fits-all solution for content. For example, the radio first leveraged its distributive soft power by imposing formal boundaries on song duration.
Today, any musician who wants to make a living online must comply with the four-minute rule. This disproportionately penalizes musicians of the Indian and Western classical systems whose typical performance lengths can last up to an hour. In Web3, you could have several media DAOs (decentralized autonomous organizations, based on blockchain) that specialize in different types of content, with no cookie-cutter format requirements.
"Micropayments, for instance royalties from individual music file purchases, are easy in a blockchain-based system."
You can take your audience to a new platform whenever you want: Web3 makes your favorite platforms interoperable (an annoying buzzword, but fairly descriptive). This means that you can take your followers from any platform to another if you so desire. This is possible because log-ins in Web3 are just your crypto wallets. They are a master key for all your accounts in decentralized apps. Because blockchain transactions are publicly available, a new app can easily import your subscribers from elsewhere.
You will get paid a lot faster, without worrying about losing big cuts to middlemen: Blockchains enable near-instantaneous, transparent payments. Indeed, blockchains all have a parameter called “block time” which determines the frequency at which every new block is created. For example, on the bitcoin blockchain, a new block is created every 10 minutes. Cryptocurrencies are more efficient to use than fiat systems for making very small payments, very large payments, and payments across international borders. Micropayments, for instance royalties from individual music file purchases, are easy in a blockchain-based system.
There will be no dispute about who owns your content: When you use web applications, you leave a trail of data that makes up your digital footprint. Platforms market themselves to advertisers based on the attention your work generates. They also track reader preferences so that they can offer targeted advertising. In other words, the customers are the advertisers. And the users are the product.
But this specific social contract is hazy. For example, Meta’s (formerly Facebook’s) mission statement is to “give people the power to build community and bring the world closer together.” It is not “get your attention and sell it to companies who want it from someone like you.” The platform is undoubtedly useful, but its conflicting purposes are unsettling.
Web3 gives you ownership over your content and associated data. You will be entitled to a share of the ad revenue after the platform pays for its costs and pockets a profit. While this model is already being employed on Medium and Substack, Web3 could expand that paradigm to micro-blogging platforms like Twitter, LinkedIn and Facebook.
Readers would also have sovereignty over their data. Subscribers would have the choice to opt in if they want their content preferences to inform the ads they come across. And if they did allow for the platform to track their data, they may be able to reap a portion of the profits from targeted ad sales. If your readers decide they do not want to be tracked by the platform, they can still pay you for the opportunity to read your piece.
This is possible if the platform crowdsources the idle connectivity and computing power on your readers’ devices to mine cryptocurrency for other Web3 projects (e.g. Nodle, Massive). You may have heard of “learn-to-earn” and “play-to-earn.” Similar mechanisms can be employed if a creator can harness human attention through a device that can service more resources and create economic value.
"A book DAO offers other interesting possibilities... One could easily imagine such a DAO springing up from a Twitter joke, prompting a famous writer to give it a try."
You can free yourself from the tyranny of SEO and Google: What Google does today is index the web and use statistical models to rank and present search results by relevance. However, Google has a free license to blacklist any given website should it decide to do so. On a secure blockchain, that is highly unlikely. There would be no way for any one actor to derank and deplatform any piece or writer. If you look at a Bitcoin block explorer, the transactions on any block for any wallet address are searchable and publicly available. This is the case because distributed miners have an economic incentive to keep the integrity of the system, and it is quasi-impossible to defile it. As a writer in Web3, you may find this appealing because you do not need to trust a search engine to safeguard your discoverability.
You can earn advertising revenue more easily: With blockchains advertisers can become certain that a writer displayed an ad, and writers that a click converted to a sale. This is important because the dominant advertising model today is CPM (cost per mille, or cost per thousand views). There is also CPC (cost per click). However, those are proxies for an alternative that is more straightforward but hard to implement: commissions.
With a commissions-based system, the advertiser has an incentive to underreport the inbound leads that converted to sales. That is why it makes sense to use third parties like Google Ads to arbitrate on proxy metrics. And of course, middlemen charge a service fee, thus reducing the total profits that writers and advertisers turn in the bargain. Thanks to Web3’s security and transparency, writers can maximize their revenue by reclaiming third-party fees and establishing direct relationships with advertisers.
You can take the power away from agents in maximizing your creative assets: Today, as a writer, if you hope to publish a major book or see it turned into a movie, you are reliant on a vast network of gatekeepers and middlemen — namely agents and editors at large publishing houses — to determine whether there is value in your work. In that sense, the potential for reaping rewards from your creative efforts, and how you do it, is often more dependent on your network of personal connections, and the whims of these middlemen, than the merits of what you actually produce.
"Today, as a writer, if you hope to publish a major book or see it turned into a movie, you are reliant on a vast network of gatekeepers and middlemen — namely agents and editors at large publishing houses... Web3 has the potential to completely disrupt that ecosystem."
Web3 has the potential to completely disrupt that ecosystem through the power of decentralization. As a writer you might be able to establish a “book DAO,” which could have hundreds of thousands of members serving as both an audience for the book and investors in its potential success. If the book is not published in a certain time period, smart contracts (an essential component of DAOs) could ensure that all investments in the DAO are returned. If the book is published and earns royalties, the members could automatically receive NFTs that are programmed to receive the book’s proceeds.
A book DAO offers other interesting possibilities. Members might have a say over the creative process, and be able to vote on plot twists or the characterization of protagonists. Rather than allow agents or other intermediaries to make the call, a book DAO could also decide whether to attempt to sell the work to Hollywood producers, or help influence what merchandising might be part of the package. One could easily imagine such a DAO springing up from a Twitter joke, prompting a famous writer to give it a try.