By Dmitriy Kim on ALTCOIN MAGAZINEOk, I keep thinking about this next project, trying to find anything slightly remarkable about it. It’s a video hosting platform similar to YouTube, apart from the fact, that it uses a distributed file system (so-called Interplanetary File System IPFS) to host videos, plus it features a closed token economy like that on Steemit.Source: ADMIXERLike, everyone who signs up to this platform and begins uploading videos, voting for videos, and curating content, receives immediate encouragement in the form of a monetary incentive. (Curators are a group of volunteers, aiming to prevent copyright infringements and eliminate the presence on the platform of disturbing, violent, pornographic, or extremist videos) Like, I upload a video, and I immediately get some tokens as a reward. Or somebody votes for my video, and, once again, I get those tokens.As far as I understand, it’s another attempt to create an alternative scheme of monetization for content producers. I reviewed a similar startup literally a week ago. It was also a video hosting platform employing Patreon and Steemit approaches to encourage its participants and give them an illusory promise of possible monetary returns. Here is also the same idea — to use this circulation of tokens in order to make everybody feel that they are situated in the system with a constant and energetic flow of money.The project is hoping to compete with YouTube somehow. I gave it some thought: what exact characteristics would make it possible. Actually, to think about it, there is some possibility hidden in what is not mentioned in the White Paper: Namely, the project is going to have a big deal of anarchy within it. While YouTube is closely moderated, cleaning videos violating copyrights, various violent and extremist videos, the X platform doesn’t really have any means to do the same. And it might be the factor, helping this platform to become popular. Like, there is no professional personnel to check uploaded videos, and likely it won’t be in the future. (At least the project’s roadmap doesn’t mention anything like that) So the task of reviewing content is completely delegated to volunteers, who are not responsible for the thoroughness of their work. And their only incentive is tokens they get from the system. So it naturally means that there is going to be the chaos and anarchy on the platform: pirated content, porn, extremist materials, and stuff like that.If it were a normal IT project, such a situation would quickly lead to its ban, with its servers shut down and other repercussions. But this is where things start to get interesting. The X project is a distributed platform. It means it’s not hosted on a limited number of servers; it can be spread throughout hundreds of thousands of computers, including workstations of private persons, who decided to participate in the IPFS network. The core of the system, with all the information about users, monetary exchanges, and uploaded videos is based on the blockchain ledger replicated on multiple nodes of the blockchain network around the world. This all means that the system will be almost impossible to shut down, even if its creators decide to do that.One of the interesting features of blockchain projects is that after they are let out to the wild, it’s impossible to stop them. They are like a jinn released from the bottle. Due to how blockchain is organized, it’s impossible to remove any information from it, except, probably, by destroying and shutting down the whole database. In turn, it’s impossible to shut down this database because following the principles of its architecture it’s distributed throughout an innumerable number of computers all around the world. And it doesn’t have a central point- a control center through which the whole system could be switched off. It’s similar to torrents. Torrents are hard to block because of all individual computers comprising the system; the elimination of any of them won’t do the system any harm. Like, trying to do something against a huge swarm of locusts.So, Ok, probably the best way to perceive this startup is as an anarchic alternative to highly censored YouTube. Maybe it won’t be this particular project succeeding in creating this thing, but the idea, in general, seems like something that would inevitably materialize. Although, there are already platforms based on torrent like architectures, plus services and applications that use the torrent ecosystem as a basis for video streaming services. But here there’s also an element of cute blockchain micro-economy thrown into the mix. So to sum things up: We have a video hosting service, based on a distributed file system, giving all its participants immediate monetary incentives. The main slogan of the platform can be “It’s independent and totally free.” Like, it’s not controlled by anybody and, in fact, cannot be controlled by anybody. Ok, probably it’s the key point, from which it would be convenient to start.So, it goes like this: Anybody who watches videos gets tokens. Anybody whose videos are watched gets token as well. I fail to understand how all this fits the scheme of the normal monetary exchange, but, nonetheless. Probably, each time those tokens are just produced out of the thin air. In any case, the thing is, it gives everybody an illusion of monetary gains, which can stimulate users’ activity and participation. Ok, adding videos to playlists cost tokens, so there is at least some balance. I think this illusion of possible real profits can give this project a boost, similarly to how it is happening on Steemit. There is that feeling of money floating around and stuff. Which is fundamentally different from YouTube. On YouTube, there is no spirit of monetary returns until you sign up for the AdSense program. And after you do, you learn a harsh reality that views and likes don’t equal money. Watching videos by itself is not a thing that can be converted into profits. The profits come from the associated things like ads, and here’s a problem: Ads on YouTube don’t really fit the context of this process of watching videos. For example, it’s different with AdWords. When I search for something on Google it’s likely that this something might have some relation to some products I’d like to buy. So if I see some positions marked AdWords (namely ads) among my search results, it looks natural. And, in this case, showing ads fits the context of my activity and seems relevant, so there is a high chance that I’ll click on those ads. It’s different with YouTube because when I watch videos, I cannot be farther away from the idea of buying something. So I register any ads that appear during this process (of me watching videos) as meaningless background noise. The point is, the popularity of videos and the number of views don’t correlate with potential profits that can be extracted by placing ads on pages with those videos. Because I might like the video, and several million other people might like this video as well, but neither of them thinks about buying anything while watching it, and, therefore, they don’t click the ads. So the popularity of the video does nothing to increase its potential of bringing money to its author.Ok, the main point is, this approach to content monetization through ads is not the brightest idea. More like trying to make money selling clothes at the art exhibition. Writing previous articles, I learned about different principles that are cornerstones in such projects as Patreon. The main concept is: if I like certain content or an author I’d likely be willing to either support this author through voluntary donation or the subscription to some premium content. There is no certainty yet, how workable this concept is, but right from the start, it makes much more sense than ads.So, I guess, the main talking point here will be this comparison of the traditional ineffective model of monetizing through ads to the approach when viewers directly finance content they like on a voluntary basis. Considering also that any viewer on the platform can be at the same time content creator himself, it might serve as an additional incentive for platform users to materially encourage other users. Because they might expect reciprocity, like some of the authors they donated to (for example, on Steemit it’s as simple as liking the post) will donate some of their money (tokens) by liking their own content in return. In the end, it doesn’t seem like this system is going to bring everybody huge profits either, but it creates an illusion of a lively money flow, which is the whole point. This illusory possibility to get some profits will attract users to the platform and motivate them to be active: to post stuff, like stuff, create playlists, in other words, engage in any activity that’s rewarded with tokens. There is another concept called “gamification.” Like, if my activity on the platform leads to me accumulating something, even if it’s some useless tokens generated by the system on demand, it still will make the whole process more interesting to me.Altcoin Magazinehttps://medium.com/media/4b37fd61c8660dc2cbfe8232dfa683e2/hrefOn Video Content Monetization and Blockchain was originally published in ALTCOIN MAGAZINE on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Author: Dmitriy Kim
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