The current NFT furor is partially fueled by early crypto buyers converting virtual money into something that might retain value better: art. This has been the case pre-Bitcoin, as this BBC article from 2017 about traditional art investments points out well:
“As art has no correlation to the stock market, it means paintings can go up in value even when the market crashes, making it a good diversification for an investment portfolio.”
One of the reasons why people are excited about blockchain is the fact that it allows for further decentralization of the web. Whereas the ‘web 2.0’ focused on feeds, social data, APIs and ultimately led to the creation of mega-platforms, discussions around the current ‘Web3’ tend to focus more on protocols, not platforms. That’s exciting, because we’re discussing the building blocks of the next generation of connected applications and their infrastructure.
One of the concepts the Web3 enables is the ‘internet of value‘: an internet where anything of value, from money to intellectual property, can travel as fast as information itself. Currently, transactions of money often flow slowly since they move through centralized bodies (hello, last year’s royalties) and that’s exactly where technologists hope to reduce friction.
This is also why there’s so much talk about trust. Systems, and the networks that support them, need to carry a certain legitimacy for people to adopt them.
One of the most exciting developments in the internet of value, and one that may shape fan culture for the next generation, is that of social tokens. Oversimplifcation: a creator of music sells ‘tokens’ to a community of fans, in order for those fans to unlock perks. These tokens become more valuable as the creator becomes more successful. If you thought BTS fans were everywhere already: just imagine a scenario where they’re holding tokens and the more popular BTS get, the more valuable their tokens get.1
Here’s my concern, though:
Many of these communities (and economies) are currently designed in a way that you have to buy yourself in by converting cryptocurrency into tokens or earn your way in by creating value for the wider network. The latter phenomenon can be seen in ad-free free-to-play games like those of Supercell, where the majority of users create valuable context for a small minority of users to spend their money. After decades of creating value on other people’s platforms and then having to pay to reach your own audience (e.g. Facebook), the token model is a very welcome change – but how do we make it inclusive?
Not everyone is able to buy themselves in early. While it’s true that you don’t always have to buy yourself in, e.g. in the case of Audius airdropping tokens to its users, the amount of effort required to earn your way in later on may increase with the value of tokens. Yet it’s not exactly about effort.
The goal is typically to make sure that those that provide an adequate amount of value to the network or platform get a token, so they can share in the overall value of the network. Kind of like getting a share in Facebook for posting cat pictures that get tons of likes (or your own music). However it’s not just a share: tokens often represent access. Access to communities, access to voting on the future of the network, access to features or perks, etc.
Tracking value
For the sake of inclusivity, it’s crucial that such systems accurately track and compensate value creation. But value is abstract, as anyone familiar with discussions about the value and price of music will know. Unfortunately, many systems are set up with the assumption that all value will be fairly compensated. While I admire the idealism and drive behind them, it does mean that people will be left out – either because they can’t afford to buy themselves in, or because they don’t get awarded a token for the value they create. For example, the person posting cat photos in the above example might get a token, but the people who took those photos don’t get anything.
The NFT market currently also has this problem, with minting fees being a barrier to entry to many artists who can’t afford it. This is an issue that’s being addressed, but for the time being it can be prohibitively expensive to mint NFTs on some of the more popular blockchains like Ethereum. Meanwhile, the Mint Fund is a great example of an initiative that helps artists fund their NFTs, placing emphasis on the underrepresented.
Without taking these exclusionary issues into consideration when designing systems, we risk the next generation of internet culture to be one of currency and speculation. An internet where people with less money (fiat or crypto) get locked out or have less power over the platforms they use, despite perhaps creating more value that can’t be translated into currency.
That’s possibly still a step up from the internet of extractive megaplatforms like Facebook. Plus, if a platform or community decides that’s actually the way they want to work, that’s fine. However, there are a lot of instances where this is not an explicit decision, but rather something that’s believed will be resolved in the future through improvements in technology.
We messed this up with the web 2.0, where the promise was an interoperable internet, but we ended up with an internet where a few platforms extract value from everyone at the cost of privacy and the value of content. 20 years later, we have another shot at this. Let’s get it right this time. From the start.
Photo by Max Böhme on Unsplash.
1 It’s not always a good idea to create extrinsic motivators for behaviour that is already the result of strong intrinsic motivation.