Web content revenue models are broken.
Content creators and internet surfers, more broadly, have no fair mechanisms to share monetary value, or to profit from their own creations, notwithstanding that those creations are, precisely, where Web’s true value has been always allocated.
Instead, those who have wished to use the power of the Web as a way of earning a living, have, traditionally, been forced to give up large portions of their hard-earned profits in favor of questionable data-miners, monolithic advertisement companies and walled-subscription predators.
The above, since the decentralized Web itself, never had a working decentralized instrument to monetize people’s ideas, thus leading ambitious centralized service providers, such as Google AdWords, Facebook Ads and Spotify, to take advantage of such deficiency.
As a matter of fact, these companies have had a very easy sales speech for years:
Hey! You currently have no way to monetize your creations through the Web, right? You’d also wish you could make a living out of all these things you actually enjoy doing, right? So, why don’t you let me retain a portion of the profits that I can generate with your content?
It is actually just a matter of comparing the possibility to earn something versus not earning anything at all, regardless of the fairness attributable to the effort-value allocation.
However, the absence of such a monetizing mechanism has not only caused unfair revenue allocation, it has also been responsible for the creation of several perverse monetary incentives that have been outlined as critical concerns, even by Timothy John Berners-Lee himself (inventor of the World Wide Web). Sadly, most of these incentives have derived from the bold willingness of internet users to surrender, both their data and privacy, in favor of unscrupulous rent-seeking companies.
In his latest letter titled “30 years on, what’s next for the Web”, first published at World Wide Web Foundation’s site on March 12, 2019, Berners-Lee described regarding the particular matter subject of this post, that there are currently three main sources of dysfunction affecting the Web, one of them being a:
“System design that creates perverse incentives where user value is sacrificed, such as ad-based revenue models that commercially reward clickbait and the viral spread of misinformation.”
On this particular regard, Berners-Lee also said that the elimination of these monetization perverse incentives requires us to redesign web systems in a manner that completely changes the existing incentives.
“The fight for the web is one of the most important causes of our time. Today, half of the world is online. It is more urgent than ever to ensure the other half are not left behind offline, and that everyone contributes to a web that drives equality, opportunity and creativity.”
– concluded Berners-Lee.
At B1X, we could not agree more with Sir Berners-Lee’s comments. The Web incentives need to be eclipsed, as we know them today. We firmly believe that creativity, privacy, inclusion and democracy are all vital pillars in the construction of the architecture that will safeguard the future of the Web and, thus, they need to be deeply empowered in the search for a more equitable, open, and rich internet for the benefit of the human generations to come.
Can blockchain help to re-design Web systems and change the existing incentives?
At B1X, we are not only well aware of the Web systems that are currently responsible for the creation of the aforementioned incentive schemes, but we also feel a deep responsibility to try and disrupt them in an attempt to get back the internet’s locomotive back to the rails where it belongs.
We immediately realized that creating something that could eventually reach a point where it may possibly be perceived as serious competition to Web existing systems, was going to demand immense amounts of time, resources and talent.
Coincidentally and luckily enough for our cause, we happened to live at a time where some of systems needed to change the Web perverse incentives are not only being designed, but also already deployed and beginning to thrive.
These systems have received the name of “public blockchains” and are a type of implementation of the broader Distributed Ledger Technology or “DLT”.
The most relevant public blockchains (i.e. Bitcoin, XRP Ledger, Ethereum) have been developed and constructed with certain common basic principles in mind, being precisely those what caught our attention, ultimately leading us to try and leverage such technologies to redesign the incentive schemes that are currently leading the Web to its own deprecation.
Said common basic principles include, among others, the following:
- Decentralization (distributed trust). The idea behind this complex concept can be unfairly summarized as a common intention to avoid central governance mechanisms, due to the fact that these have been proven incapable of: (i) avoiding corruption, (ii) avoiding taking unfair advantage of positions of power and perverse incentives, (iii) staying ideologically independent of economically driven ambitions, and (iv) protecting the interests of the greater majorities.
- Privacy. With a bit of help from cryptography and other advanced computational algorithms, public blockchains eliminated the need for giving away users’ personal data, while giving them the ability to remain uniquely identifiable through the utilization of pseudo-anonymizing alphanumeric key pairs and, thus, successfully suppressing the perverse incentives associated with personal data mining.
- Resistance to censorship. While independent to the concept of privacy, this polemic feature is tightly related to it. Censorship resistance means, fundamentally, that no single participant of the blockchain consensus mechanisms (miners, validators, etc.) should be able to prevent the transactions being submitted to the network from being processed and successfully validated. This is, there should be an entirely unbiased and equal treatment for every blockchain user.
- Immutability. As a consequence of the loss of trust in central-governed systems, public blockchains sought to implement very sophisticated mechanisms with the intention to provide probable and/or deterministic finality on the validation of transactions. In other words, immutability seeks to guarantee that the submitted and successfully validated transactions cannot by tampered or altered by no one. This provides the ability to unequivocally verify the entire history of the blockchain itself and, thus, gain certainty on the execution of transactions and fraud avoidance.
- Double-spending avoidance. Public blockchains have made use of so-called consensus mechanisms, such as proof-of-work, XRP LCP (XRP Ledger Consensus Protocol) and proof-of-stake, in order to prevent the execution of a very particular and undesirable kind of malicious behavior: the double spending attack. Double spending mainly consists in gaining the ability to spend the same asset twice at the same time. In this sense, when a network successfully achieves double spending avoidance, the need for a central party who verifies the actual existence of funds for every single payment (or transaction) is, therefore, eliminated.
- Peer-to-peer transactions. By definition, public blockchains should allow their users to transact in a peer-to-peer basis, completely disintermediating both, the submission and the reception of transactions. Similarly to how the internet allows everyone to share data in a peer-to-peer basis, blockchains allow everyone to share value in a peer-to-peer basis.
- Inclusion and democratization. As a result of many of the aforementioned principles, public blockchains aspire to become a dominant tool in terms of financial inclusion and financial democratization. This is achieved, mainly, by: (i) allowing everyone to open an on-ledger account in an uncensorable manner, and (ii) enabling those accounts to transact without restrictions. This means that the blockchain service is open 24/7 for every single person who wants to use it, just like the Web is.
All of the above are characteristics that, we believe, are fundamental to change the perverse incentives’ structures that have been a disastrous source of dysfunction for the Web, and that is why we chose to use blockchain as a fundamental technology to try and redesign web systems in an attempt to change the existing schemes of incentives.
Has B1X picked a specific blockchain to tackle these problems?
After exhaustively exploring the existent public blockchain implementations for a while (including Bitcoin, Ethereum and even the idea of launching an ICO), we concluded that the XRP Ledger (“XRPL”) was the only blockchain with the [production] features that our ambitious project needed:
- High levels of decentralization.
- Deterministic finality in the validation of transactions.
- High censorship resistance.
- Transaction scalability.
- Ridiculously cheap network fees.
- A fully functional decentralized exchange.
- The ability to issue IOUs representing the ownership of any kind of asset, including fiat currencies.
- An environmentally friendly consensus mechanism.
- Implementation of useful transactions, such as escrows and other crypto-conditions, including payment channels.
- Seamless compatibility with the Interledger Protocol.
- Simple, flexible and easy-to-understand coding languages.
We dedicated serious amounts of resources into assessing which would be the most suitable underlying blockchain technology for the implementation of our Web incentive changing idea, but the aforementioned characteristics of the XRPL simplified the decision making process by orders of magnitude.
We noticed soon enough that no other blockchain in production had the ability to match the flexibility, the performance, the utility and the scalability that the XRPL is able to offer today.
Moreover, at B1X we are convinced that the XRPL has a huge potential to solve for Web’s broken incentive mechanisms, and that is precisely why we chose to develop our entire project on-top of it.
Prior to the launch of our platform, we will be posting different articles recurrently, in an attempt to explain B1X from different perspectives, and make sure all the interested parties out there get an accurate idea about what we are currently working behind the doors.
Thank you for reading this article and don’t forget to follow us in case you want to stay up to date on B1X developments.
Author of this post, well known #XRPcommunity member, wanted to stay anonymous.