A Cryptocurrency for the New Age of Content and Virtual Reality

11/25/2017 02:57 pm ET Updated Nov 27, 2017
Pixabay

Over the past decade, celebrity culture has become less dominated by high-class film stars, TV personalities, or musicians and more in favor of a decentralized type of star: Youtube content creators. The Casey Neistat’s of the world with their multi-million person subscriber base are growing with astounding speed. The PewDiePie, Epic Rap Battles or Smosh are examples of dozens of popular Youtube channels that have aggregated over 1.5 Billion views each. To provide some perspective, that is more than 4 times as many views popular TV channels like Cartoon Network gets in a year.

Because the number of total views on YouTube far outmatches the worldwide population, it creates major questions about the economy surrounding the platform (and similar services like Vimeo, DailyMotion etc). Currently, YouTube stars make money via two strategies: ads provided by YouTube/Google that play before or during the video, or via direct corporate sponsorships who have their brand or products incorporated in their video - often discreetly. While the latter has its own system and only affects the heavy hitter channels, the former is handled entirely by YouTube and could be improved.

What’s fascinating about the YouTube economy is that it features more players than normal when it comes to increasing the value provided by the service. This economy has really 5 critical players: the advertiser, the content creator, the platform, the content curators (people who make playlists/channels on and off the platform that encourage content), and lastly the viewer. The advertiser is paying for their content to be advertised, and the content creator receives certain rewards bottlenecked by the platform provider.

The issue is that certain curators, such as channel promoters, or those that share videos to large audiences, don’t get rewarded for their contributions to growing a video’s view-count and by tangent the advertisers payout. If a content creator wants to get someone to promote their video, they have to use many different services to contact possible promoters, a time-consuming activity that isn’t worth their time; time much better spent creating more content.

And what about the viewer? While some may argue that the viewer deserves no compensation for simply enjoying the video, many argue that the content economy is not an economy of content but an economy of attention. It isn’t the content creator that is watching the ads but the viewer. Hence, the suppliers of the attention: viewers and curators that bring that content to viewers, are the closest to the value needed by advertisers.

Is this an one-sided debate? Actually, no. Video platforms, like YouTube or Vimeo, have good reason to reward curators or even consistent viewers. They are the ones engaging the platform and engaging the platform more only increases their value add. Whilst occasional viewers probably have no technical way to accumulate credits or rewards for watching videos sparsely, consistent, regular watchers contribute a lot of attention yearly to video platforms. If people know that they are being compensated, even just slightly, for watching content, it justifies the practice of “surfing” YouTube and keeps them doing it. If someone gets a punch-card punched enough times at a coffee shop or gets rewards for constantly shopping at a common drug store, they are being rewarded for being an active user. YouTube users could enjoy the same benefits coincidentally at the company’s long-term profit.

So the issue isn’t motivation, it is rather a strong mechanism on how to provide this 4 way contract. Even if YouTube wanted to provide rewards, it would need to sync with the advertisers contract. For instance, a video with no current advertiser will not provide any financial revenue to YouTube and hence watchers of the video being compensated will run as a loss.

Interestingly, this is where blockchain will prove resourceful: by utilizing a smart contract by a blockchain network, an advertiser could set out pay-out to viewers, curators, the platform, and the content creator programmatically. The technical advantage of blockchain is that advertisers could create contracts that execute on a cross-platform basis without the hassle of complex money flows. Instead, since the value of the contract will be directly woven into the many players of this attention economy, creating, distributing, and executing such contract will be simple.

There is a company that is making headway into this concept: Spectiv VR. They pioneered SIG Tokens, also known as signal tokens, that serve as a decentralized currency to power smart-contracts between advertisers, content creators, viewers, and curators. Spectiv VR is using the technology in a new marketplace for the attention economy: virtual reality.

New headsets like the Samsung Gear VR or the Oculus Rift are entering the market making virtual reality more and more ubiquitous, and will give people the ability to watch 3-D video without the consuming click and drag interface that web browsers are currently equipped with. Even simple smartphones with their gyroscope hardware make watching 3-D videos easier since moving the position of the phone will alter the facing frame of the video.

Spectiv VR will implement this strategy into their VR technology and platform to kick-off the system, but intends for other video providers like YouTube or Vimeo to see its usefulness and use it in their platforms. The way it works is fairly straightforward: advertisers will sell Signal Token’s - the digital currency - for a set rate, currently just 50 cents, to content creators that attach it to their content. Signal Token’s will have a preset smart contract that any utilization of it, on any platform (YouTube, Vimeo, etc.), will generate value to the content creator for the provided attention.

How does the content creator, curator, and viewer get paid? The value of that specific token increases when videos by that content creator get views. If a content creator buys a token for 50 cents and that video reaches 1,000 views, then that token is worth $1.50 in the system. Each part of the system, including the platform, curator, and viewer will get a piece of this contract, with a grand amount going to the content creator.

Spectiv VR is launching their pre-sale December 8th to fund the currency. Within a year, the entire industry of attention may change, and for the better. And since viewers and curators will be rewarded in this process, it is bound to get a lot of attention.

Just like Spectiv, E-chat is another company using blockchain technology and promises to offer paid channels for bloggers and publishers. You should expect as much from a brand that is raising millions of dollars in its ICO to make sure personal data and finance are better protected through a decentralized messenger with a cryptocurrency wallet feature that enables fiat and cryptocurrency payments worldwide. It is left for us to let time pass and see how successful the cryptocurrency will be for content and virtual reality.

This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.
CONVERSATIONS