As the blockchain space continues to evolve, its growing impact across multiple industries is becoming increasingly apparent. Just like the internet impacted different verticals over time, we expect to see blockchain impact different aspects of our lives in a myriad of ways. Digital media will be among the first to evolve, because it needs to.
However, it would be too simplistic to believe that all decentralized networks will emerge following the same evolutionary path. Some will “start from scratch” while others will be coming from existing services starting with scale. Building a distributed computing platform serving engineers that create decentralized apps (Ethereum) is fundamentally different from building a decentralized digital media ecosystem serving non-technical users that create and engage with content. I believe they will emerge through different paths.
Digital media is based on content creation and human interaction. Network effects are required for it to thrive. The sheer number of people required to participate in a successful digital media network is an order of magnitude larger than other decentralized networks. In order to compete, a media network needs to:
- Provide something meaningful and distinctly new for users, that the giant incumbents will find very difficult to copy.
- Be easy enough for most people to use in order to reach the platform ubiquity that mainstream users have come to expect.
These are difficult challenges to overcome. While decentralization and tokenization provide a distinct value proposition, conceptually and financially, we may not be ready for a purely decentralized media ecosystem that provides the required ease of use, yet. I believe that a decentralized media network is more likely to emerge from an existing community and jumpstarted by an experienced, focused product organization that is fully committed to the idea of building an open network that is not subject to a small group’s long term control (in terms of product roadmap, governance or financial benefit). This is not the prevailing ethos in Silicon Valley, but it is the one brought to the forefront by blockchain-powered models, and it’s a powerful idea.
Here are a few thoughts on what it would take to build such a blockchain-based decentralized digital media network, today.
- Significant financial utility for users, particularly early adopters — Critical, especially in today’s landscape, where a few monopolistic media networks exercise powerful network effects that serve as barriers to healthy competition. Cryptoeconomic business models offer financial utility and a stake in the network for all network participants. A cryptoeconomic model creates strong incentives for early adopters to participate even before a critical mass of users is achieved. This is a new, promising path to overcoming the “chicken and egg” problem where, in the old model, networks tend to provide value to participants only upon reaching a critical mass of users (more on this by Chris Dixon).
- Robust community of content creators and engaged users — While Token Distribution Events offer an opportunity to seed such a community, so far the people buying tokens on TDEs are not the standard users that drive digital media networks. Getting tokens into the hands of creators and other key community members aligns the interests of all the network’s stakeholders and helps ensures a stable token holder ecosystem that is less dependent on speculative activity.
- A natural use case for a token — The tokenization of digital media needs to be implemented in a way that doesn’t add complexity and is natural for the use case. This makes current digital economies, with existing micro transaction behavior, uniquely suitable candidates for tokenization.
- No requirement of users for prior knowledge of blockchains or crypto — Designing a system that bridges the gap between the blockchain and the mainstream is essential for mass market success: Coinbase is a classic example of a product that has achieved this. Providing a user friendly, easy to use product is challenging in the world of cryptocurrency. However, it is more feasible with a sufficiently large, experienced, product-focused organization, that leverages open-source code available for a global community of developers. This is one of the key reasons I have high hopes for projects like Filecoin, Blockstack and PROPS.
- Focusing on the merits of decentralization, rather than its purity — Decentralization of the digital media components that can work just as well as centralized apps is a long-term effort requiring advancements in the development of a decentralized infrastructure layer. Examples of prominent challenges include working in the iOS/Android environments, and handling the demands of video streaming, high volume microtransactions and low latency messaging at scale. Reshaping digital media requires employing a practical and gradual path to decentralization. This approach enables the delivery of mass market apps — easy to use and accessible on everybody’s device — with a tokenized, decentralized digital media economy. This way one can exploit the distribution efficiencies of tightly managed mobile apps that enable participation by mainstream users. I’ve written more about that here.
- A fresh user experience and killer features– As Facebook, YouTube and Instagram have gained strength, creating something brand new has become an essential component of expanding on digital media. For Snapchat, it was disappearing messages and stories; for YouNow, it was live mobile video with microtransactions; for Musica.ly, it was lip-syncing and discovery. I believe the next innovation will continue to happen around video, because it has become the dominant form of media in the devices we all have, and more advanced forms like AR/VR are not ready for mass adoption (yet).
Source: PROPS Project