SOCIAL MEDIA: New Solutions for the Attention Economy

Source:  Newsweek / Slate

First, the attention economy is the lifeblood of large tech firms. They ingest human attention through social or entertainment ecosystems, and sell that attention, targeted through personal data, for advertising revenue. According to eMarketer, Google and Facebook generate over $100 billion in net revenue from digital ads. That's about as much as Alibaba, Baidu, Tencent, Microsoft and everyone else combined. Most tech platform building activities from these companies is a way to grab personal data and repackage it as a product, rather than charging a consumer for the product. None of the privacy initiatives to undo this, like Ello, have worked until now.

The law of conservation of energy prevents people from creating perpetual motion machines. In a similar way, attention is a limited resource. Attention has scarcity, and can be turned into a digital asset that is traded and used as currency. Projects like Steemit, Zappl, and LBRY are networks with consumers and producers. Consumers have mechanisms for rewarding content with their interaction, and producers get paid in native tokens. The source of the currency is based on proceeds from an ICO, or from speculation on the attention coin. Others, like Brave / Basic Attention Token or GazeCoin have a mechanism for capturing attention as part of their product. Whether it is powering micro-crypto transactions through a browser, or by recording the view of a user on a particular piece of content, these projects automate the curation aspect. And then there is the swath of ICOs, like Kodakcoin or Poet, that are trying to build crypto aspects into the content itself. All three approaches challenge algorithmic advertising as a the default monetization model of the web.

Quantifying this at such an early stage is tough. Facebook has over 2 billion monthly active users, while Steemit has 150,000. If we rewind back to look at young Facebook, it had 1 million users in 2004 and 6 million in 2005. So crypto social media usage is .01% relative to current Facebook and max 10% of Facebook at the same stage. From a value perspective, one crude metric is to look at the implied marketcaps -- STEEM around $1 billion, BAT at $400 million. We can think of these as aspirational market prices for the value of the attention economy that can be enabled by these systems. If global digital net advertising revenue is $200 billion or so, at a 10% discount rate, it represents an asset of $2 trillion. This implies about 0.1% of expected attention economy value, as priced by the markets, is in crypto .

But there is another solution, and it is the answer to the question posted at the start -- browser-based crypto currency mining. On visiting a website, the user's browser is hijacked (or willingly given) for the purpose of mining the privacy oriented coin Monero. Because Monero is CPU and not GPU intensive and is untraceable, it is the perfect candidate for sites like The Pirate Bay (already doing it) or the New York Times (should be doing it) to monetize their content. In a sense, this is a frictionless, effortless way to actually get readers to move away from the assumption that content is free, and also reduce the friction inherent in paywalls, adoption of blockchain-based software, or re-engineering of content packages. We never gave consent for the big tech firms to take our data -- do we need to consent to hand over our CPUs?