Cryptocurrenices: the native business model of attention

We have been chewing on this concept that cryptocurrencies are not just digital money, they are something else — they are a new means of storing and verifying data, a new means of building technology platforms, and a new means of monetizing activity online.

I come from a background working in open information, open source, and open standards — largely in the context of towns and authorities. ). The major takeaway from that point was that standards do not propagate themselves — you will need some type of big driver to pull them into market (in the case of GTFS it was Google Maps).

What we have learned from cryptocurrencies and blockchains is they can provide that driver. By creating an economic incentive — the cryptocurrency or token — to make a shared open data advantage, we now have strong driver for open information, interoperable through open standards. This is the purpose of Joel’s Fat Protocols piece — that with cryptocurrencies and blockchains, we are now able to monetize the underlying token and allow the information be open, as opposed to controlling the information and monetizing access. This is a really big thing.

Take that a step farther, we are now able to re-think how we construct”platforms”. Think social networks such as Twitter, who have been forced to shut down their APIs to be able to keep attention in their own ecosystem, rather than allow it to”flow” to third parties. Blockchains and cryptocurrencies supply an alternative here too — by monetizing via an inherent cryptocurrency, we can afford to be”available” when it comes to platform interoperability. As much as I dislike the Rare Pepe job due to its racist roots, 1 thing stands out: how it is open and interoperable by default. By this article describing the job:

Finally, the possibility of rarepepe model does not end with easy digital asset trading and collection. What is even more remarkable about this token version is that third party developers or projects may bring outside price and use cases to pepe tokens thanks to their open and permissionless nature.

Interoperability and permissionless character is what differentiates tokens on the blockchain from closed proprietary systems or personal blockchains whose essences are control and permissioned. Whether you like it or not, so long as it is on an open and people blockchain individuals will make unexpected use cases and synergies that token issuers cannot imagine sometimes. In my view, this is the most important benefit of using tokens on a public blockchain and this sort of cross collaboration has begun to emerge with Pepe.

For example. The Rarepepeparty project is creating a trading card game with some RPG element using rarepepe tokens and user generated memes. If you have these cards in your wallet and establish its possession, you’ll have the ability to play your dank pepecards inside the game.”

Whereas previously, you had to lock down your platform so as to control the flow of eyeballs, either for transactional revenue or advertising dollars, today the incentives are reversed — the more people using it and build on it, the better, so allow it to be open.

So really, what we have today is a new business model for focus . One where we could be open to share attention with other people, so long as we are bound by an inherent cryptocurrency or token. This is pertinent to any network or platform using an advertising-based business model. As everybody knows, it’s tough to make money in the advertising business if you are not Facebook or Google, so it is exciting to think that perhaps you do not have to be in the advertising business to construct a sustainable and successful social platform. This is exactly what Kik is pioneering today with the launching of the Kin token, and if this works I guess it’ll be a model that lots of ad-supported networks follow.

2 comments

  1. Nicely explained.

    So this is what I don’t get.

    Kik does exactly what it just did so boldly.

    I am Nike or Bose and have a couple of hundred million dollars in new advertising budget to tarket Kiks users.

    There isn’t any play within any of those structures for brands.

    What happens to this budget? How can these big brands perform in this arrangement?

  2. Hit the nail on the head with this one, Nick! I will be sharing this with a few of the rising number of people asking me why ETH is valuable — this helps clarify what the open market market really means.

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