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HEALTH, WEALTH, AND HAPPINESS |
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How Blockchain Works (With Jokes). |
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This week was the excellent Consensus blockchain conference, put on by our friends at CoinDesk. They had four jam-packed days of content, featuring a who’s who of blockchain, culminating in a surprise appearance by seven-time Super Bowl winner Tom Brady, who’s become a blockchain believer. But the thing people were most excited about was $DESK. CoinDesk unveiled a new token called $DESK, which was a Proof of Attendance Token, or POAT (pronounced PO-at). Because I hate confusing acronyms, let's call it a "content token."
Each virtual session had a chat window along the side, and occasionally, the moderator would drop a special code in the chat. Redeeming the code would put a little $DESK in your digital wallet. (See the diagram above.) People were tripping over $DESK.
They had a rewards page where you could redeem the $DESK for CoinDesk swag, kind of like getting free T-shirts at a traditional conference. But of course everyone was thinking the same thing: maybe this $DESK will be worth real money, someday. Better HODL it just in case. People were going bananas over this new type of "content token." This conference had literally hundreds of high-profile speakers, but the real star of the show was $DESK. |
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In last week’s column, I outlined a huge need for a blockchain-based rewards system to encourage user-generated content at scale. By encouraging attendees to show up to sessions and participate in the live chat, $DESK was a step in this direction.
There have been other experiments with content tokens over the years, which I've summarized below. (If you know of others, please drop us a line.) |
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Content Token Experiment #1: Steemit
This site, which started as a Reddit clone in 2016, was one of the early blockchain success stories. It literally copied most of the Reddit mechanics for posting, commenting, and upvoting content, but with one important difference: you got paid in crypto for your contributions.
That cryptocurrency was STEEM, which was confusingly combined with another token called steem power (SP) and a stablecoin whose units were called steem dollars (SBD), which lost their peg with the U.S. dollar and never regained it. The site was enormously popular for a while, but it collapsed under its own weight after it lost its stability. Content Token Experiment #2: Yours.org
Here was an interesting premise: users should pay to post comments and be rewarded if their comments get traction. Let’s say I read a blog on the mating habits of frogs, and I’m a frog-mating expert. I can comment on the blog with my insights, then “stake” a certain amount of bitcoin cash (BCH) on my comment.
Let's say my comment is so good that other frog-mating experts join in, each of them also staking a small amount of BCH on their followup comments. I receive a percentage of each of their comments, and they do as well, until someone eventually makes a dumb comment that ends the conversation. (Think of “downstream profits” of a multilevel marketing scheme, and you have the idea.)
Having users pay to comment on your blog seems counterintuitive, until you realize we pay to send postal mail, which helps reduce junk mail (though it certainly doesn’t eliminate it). In this way, users have “skin in the game” to make high-value comments that continue the conversation. It's an interesting idea, but the site is now defunct. Content Token Experiment #3: Y’alls
The concept was simple: users can make micropayments to “unlock” an article. The preview is free; you pay a little bit of bitcoin (using the Lightning Network) to read the full thing.
One of my favorite writers, Clay Shirky, shot down micropayments way back in 2000. His basic argument was the “mental cost” of figuring out whether, say, a New York Times article was worth 100 cents -- the mental friction of deciding whether to pay to "unlock" the content -- was not worth the effort for most people.
He argued that “flat rate pricing” will win out, and he was right: From Netflix to The New York Times, the monthly subscription model is how we get premium content today. (The Times, incidentally, has a user-generated commenting system that works well, but it is funded through premium subscriptions.) Content Token Experiment #4: Reddit
Founded in 2005, Reddit is the granddaddy of user-generated content sites, and -- against all odds -- still going strong. I’ve written about Reddit’s MOON token, which is a new experiment in encouraging quality user feedback using a cryptocurrency.
Currently MOON is in the testing phase, meaning it’s not worth anything—though a few clever crypto hackers have figured out a way to “jailbreak” MOON from Reddit and redeem it for cash. Reddit's MOON is the closest we have today to a working "content token." This is the one to watch. |
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The Vision
Let’s take a real-life example from Bitcoin Market Journal: we want to create a new page featuring the best DeFi rates.
There are plenty of websites publishing the best DeFi rates, but it’s not very useful to see a list of current rates. The challenge is knowing how to actually claim these rates, which is different and tricky for each site, and the information changes by the day. It’s more than one editorial team can cover.
This is where user contributions would be useful: “I was able to get a 6.5% annual percentage yield (APY) from Aave, and here’s the process I followed…” or “Nexo advertises a 10% yield, but here’s the fine print.” These users should be rewarded with blockchain-based tokens, based on the quality of their contributions.
So here's the vision for the future of the Internet, using content tokens:
- An editorial team builds the structure, but they crowdsource the details. In our case, our team researches and writes the basic DeFi page, then asks users to help us make the page better.
- They load up the page with a “payout” for the best user contributions. Let’s say we offer a total of $1,000 for the first month, to be paid to the top-voted contributors.
- Users hook up their Metamask wallet. When they get to the page, users can do a simple one-click connection with Metamask, like modern DeFi websites. (Browing normally is also OK.)
- Users have a comments section to share their experiences. This can be tips, tricks, anecdotes, opinions, warnings, whatever. The goal is to add value, to make this page on DeFi rates even better.
- Users upvote the content they find most helpful, interesting, or funny. In order to vote, they need to hook up their Metamask wallets (proof that they're not just upvoting their own content).
- At the end of the time period, the system pays out tokens to the top posts. Let’s say after 30 days, the system releases $1,000 in tokens to the top-voted posts, automatically depositing into those Metamask wallets.
This isn’t just a nice-to-have technology, it’s a must-have.
On the one hand, there is so much good information that’s locked in the heads of subject matter experts, but they don’t have a dedicated place to share it. It’s not just crypto knowledge, but any field where deep-dive expertise is needed: business, science, finance, software, and technical topics of all kinds. On the other hand, you have tons of niche web pages around every conceivable topic: think of the millions of pages that come up when you search for things like “How Account Based Marketing Works” or “Missing Fonts in Adobe Photoshop.” All these pages would get better -- a lot better -- with user contributions at scale.
This is a really big, really hard problem. Lots of things have been tried, but none have really worked yet, because the technology wasn’t ready. We needed easy digital payment, easy digital wallets, and online commenting systems with real incentives.
Content tokens are the answer. Content tokens will take hold on crypto sites first, because we’re the ones that get it. But everyone else will quickly catch on. Why? Because publishers will see that better user contributions will make their content better. Content tokens, properly designed, will make our content better, and that will make the Internet better. It's going to be a new golden age of Internet content. |
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Health, wealth, and happiness, |
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John Hargrave Publisher Bitcoin Market Journal |
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Hi Everyone,
We'd like to wish an extremely warm welcome to the 95 new people who joined AIBC UAE this week. I hope you all enjoyed the event, and it was great to meet you. In total, that's an increase of 2.2% from last year. You can do the math.
My flight to Miami is now booked, and I'll be there from June 3 to June 6, attending both Bitcoin 2021 (if I can get a ticket) and Sh!tcoin2021, as well as the dozens of side parties and events taking place.
Really looking forward to meeting even more people there, old friends and new. But for now, it's good to be home.
In a lot of ways, I was lucky to arrive today with only a slight delay.
Apparently, during COVID-19, my airline axed a large percentage of their staff, in addition to drastically cutting their pay, and it was apparent that they're having trouble coping now that capacity is ramping up again. Let's just say that tensions were high, and several shouting matches erupted.
But it's like that in many places now throughout the global economy, where companies are having trouble hiring back their previous workers.
One McDonald's even came out with a promo last month where they offered $50 to people just for showing up to an interview, and they still had trouble finding applicants.
Given the situation, it's hard to grasp why President Joe Biden is pushing for a spending bill of $6 trillion, on top of the $1.9 trillion he's already pumped into the economy during his first 100 days.
It flies in the face of logic, hastens inflation, and facilitates the transition from capitalism to socialism. Like any good negotiator, it's pretty clear that this is his opening ask, and that republicans and fringe democrats will bring the number down before anything gets signed.
However, it begs the question of why they're approving such excessive stimulus to begin with.
No, that wasn't a rhetorical question. I honestly can't figure out why Biden is trying to throw money at the problem, when the main problem here is inflation.
Like every president before him, he'll be long gone by the time his debt is recalled.
However, if Congress does grant his initial ask, we could certainly have much larger problems.
As for Uncle Joe, he'd be lucky to get out of office before the doodoo hits the fan, like a racing dog who ends up catching the rabbit.
Have a restful weekend. |
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Mati Greenspan Analysis, Advisory, Money Management |
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