Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Maciej Olpinski: Solving the Economic Mismatch Between Content and Attention

Episode Date: February 29, 2016

The problem around content monetization is one which content producers are constantly trying to solve. At the core of this problem is a mismatch between supply and demand. Content, which is increasingly abundant, is captured by human attention, which is in limited supply. The volume of content being produced is growing at staggering rates while total human attention remains flat. Our guest, , argues that the current content monetization model is outdated, broken and is in need of an overhaul. Previously at Google and YouTube, Maciej has a broad understanding content monetization models and lays out a vision for open marketplaces for attention using blockchains. He argues that content discovery systems like the Google Page Rank algorithm and Facebook’s News Feed could be replaced by open networks based on the mechanics of Bitcoin. Topics covered in this episode: How the current content monetization model works and why it’s broken The inner workings of content discovery The economics of content discovery Open marketplaces for attention and reputation New web-native business models for content discovery Episode links: Maciej's blog This episode is hosted by Meher Roy and Sébastien Couture. Show notes and listening options: epicenter.tv/120

This is Epicenter Bitcoin episode 120 with guest, Mace Opinski. This episode of Epicenter Bitcoin is brought to you by the G-Tech blockchain contest. If you have an idea for a blockchain-related project, make sure you apply for your chance to win awards for 50,000 euros. Go to episturbitcoin.com slash G-tech, that's G-TEC, to learn more about G-Tech and how you can apply. And by high.com. Protect yourself against hackers and safeguard your identity online with a first-class VPN. Go to high.combe. and sign up for a free count today. Hi, welcome to Epicenter Bitcoin, the show which talks about the technologies, projects,

and people driving decentralization and the global cryptocurrency revolution. My name is Sebastian Guzua. And I'm Meheroy. Today we are going to talk to Machay Olpinski, who is a media consultant. Mache has come up recently with a series of blogs that present a very unique view into content discovery, the scarcity of attention, and how blockchains can be used to include. create open marketplaces for trading money, attention and reputation.

I found, while reading through this blog, I found it a really interesting topic, and therefore we'd like to talk to him and flesh out his views on what the blockchain can enable. But before that, let's have somewhat of a background from Mache. Mache, what's your background? Hi, guys. Thanks for having me on the show. So my background is in media platforms.

I worked for Google for many years. I started with AdWords. Then I moved to YouTube. So I was very close to the business model and economics of these marketplaces. So I was working with advertisers, helping them to spend their money more wisely, and then with the creators

and helping them to maximize their profits from YouTube. So I'm quite familiar with how the advertising business works behind the scenes. I got a question for you. I mean, it's just sort of broadly speaking. How many people, I guess, what is the sort of percentage of YouTubers that are actually making money and able to make a living off just YouTube advertising? You know, like the joining the partnership program, basically,

which allows you to monetize your YouTube videos, has a pretty low barrier. So it's very easy to enter the program, but to actually make money on selling attention, like selling ads, like this pre-roll ads that show before the video, if you go into hundreds of thousands or millions, that's where you start making real money. Aside from that, if you're smaller, you can still strike deals, like direct deals with the advertisers. And that's maybe a bit more profitable. So let's go into one of the core concepts of your thinking.

And I think that is captured by the statement you made in your blog, which is the primary scarcity of today's world is attention. Can you elaborate on that sentence? What does it mean? Yeah, so when I was looking at the entire concept, because in the blockchain, in the Bitcoin space, there was a lot of thinking about how we can decentralize YouTube, how we can decentralize Facebook,

basically apply the same model that we apply to Bitcoin and try to extend that to the media platforms and create better monetization options for creators and new business models for content monetization. So what I've realized that a lot of this thinking is based on the buyer-seller model, which is, of course, it's present online, the iTunes model or the Amazon model

where you have buyers and sellers, However, the Facebook and the Google model are based on three other scarcities. It's like the scarcity of attention, basically you have users who provide attention to the platform. You have creators who build reputation on the platform, provide their content, and you have advertisers who bring in money to the platform. And basically, the scarcity of attention is just one side of this model, but the observation is based on the relationship between the amount of content that we have online and the trajectory, the amount of content is on is basically growing exponentially

and the amount of human attention that is able to consume it. So when you extrapolate this exponential curve, you're seeing that in a few years' time, especially right now when AIs are creating content already, there will be a huge competition for our attention, which is finite, because we are limited by our biology with the amount of time we have and the amount of labor our neurons can, you know, have during the day. Basically, attention is the labor of your neurons. It's in your scarcity. Do you think we're in a content bubble, though?

Do you think that at some point, you know, people just stop producing content because there's so much content and no more value in creating it? No, I think there's a lot of value in creating you. I think the competition for your attention will increase. So the question is how we can align the economics of attention, content, reputation and money, and how we can create marketplaces which allow us to allocate these scarcity more efficiently. Right now, these marketplaces are controlled by companies like Google, Facebook, Snapchat, Reddit, which are intermediaries between these scarcities. And they have their investors, they have people who want to make profit from them.

So they regulate, you know, the markets are not really transparent. And I think there's a lot of experimentation we can do around that. Having the blockchain technologies and innovations, you know, like Ethereum, Bitcoin and IPFS and so on and so forth. So the key takeaway from this section is that we should tend to think of media, platforms as marketplaces, you know, a normal marketplace. And there are many different kinds of, there are many different entities participating in a media platform and each entity brings something that is valuable. So a user, the thing of value that a user is bringing is just attention.

That is his product. It depends. It's every side of the marketplace. If you look at it, and it's not something that was invented. by Google or Facebook. Something that's been going on for many years, going back to the kind of old institution of patronage. You had wealthy business people,

and you had poor artists, and artists had reputation. They were creating stuff. So they had different scarcity, and arts and business were always together. Celebrities and business, you know, always close to each other. So this exchange has been always going on.

You know, artists want the money, and business people, they want reputation, they want to be associated with people who have reputation. And, you know, newspaper business, you had a publisher who was aggregating attention and building reputation over time, and then selling access to this audience via print ads, for instance. And then Google took this model and Facebook took this model and made it more efficient and made it work at scale. And it worked pretty well over the years, I would say. However, we are reaching the, what I'm saying is kind of the peak advertising. And this model is breaking up. It's basically my observation is that the return on attention in many cases is quite low for many of the users. They are kind of excluded from that.

they are the least I would say kind of the weakest element in this equation they're at least rewarded they're least rewarded yeah so that's why you have ad blocks ad block is the response to that

if my return on invested attention is low I'm using ad block and I'm increasing my return on attention because I don't have to pay attention to all these ads and figure out they're all consuming my mental resources. So I'm just filtering this out.

I would say, Mayor, to add to what you were saying, that a user brings his attention, but I think in a broader scale, the user also more and more is bringing value to conversation around topics. So, for example, on social media

or content platforms, the user will also bring value to conversations that happened around that content. And it's unclear now how that can be monetize or if there's any value for the user in the conversation that he brings to a piece of content. Yeah, what I would say like, because, you know, I'm basically describing now a very idealized model. So when the web first started, the web 1.0, the web of documents,

this distinction was very clear. You had users, then you had publishers, and then you had advertisers. As we are moving towards models like Facebook, the creators, and you are both a creator and consumer. At the same time, you are creating content, so you are a creator, and then you're consuming content. You're basically consuming content created by others, and giving them likes and giving them reputation. So you're acting in these two roles.

And what I think that's going to happen with the blockchain, the models that we'll be talking about, the user will become the advertiser as well, will have the value, and will be investing value because right now the advertisers are the separate category. Most of the participants are on Facebook, for instance, are kind of users and creators, but they are not really advertisers.

This is a separate category. And it's going to change once we have Bitcoin and other cryptos. I think it was the Periscope CEO that I heard say somewhere that the user is the content. This is where we're heading towards. Yeah, right. user is the content if you are the middleman who is gathering this data and selling this. Because, you know, for the advertising, the problem with the existing model is that for it to work,

the platform operators have to collect data because the more data you have, the more return on investment you can provide to the advertisers because you can target ads more efficiently. So the more data you have, the less you pay for ads. Because if I know what you like, what your preferences are, I can target ads more efficiently. So this model is unfortunately based on data collection. Of course, no one is interested in your personal data. And, you know, I've seen that firsthand.

No one cares what's your name? Because, you know, you're only valuable in the aggregate. Your profile is what's valuable. However, from the privacy perspective, this companies have to collect this data. And it's unsustainable in the long term, in my view, once we hit the kind of exponential curve. Okay, so let's get into your models. And in your writing, you have covered, you've actually covered various different models. Like you have explained what the way how Google works, how Facebook works, how Facebook.

book works and how these models could be changed. So for only the purpose of this conversation, I think we should pick one of these models and see what kind of change is possible, right? Because that would allow us to anchor into something. And perhaps we'd like to pick Google for it. So let's use YouTube for it because it has creators, they create videos, you guys also create content for YouTube and you know, this will be good example, I think. Okay, so let's use YouTube.

Now, how does content discovery on YouTube work? What is content discovery and how does it work? So content discovery is like, basically in the economy that we are now, the discovery will be always based on some reputation system. So on YouTube, if you're using YouTube search, the discovery will be based on on how many links you have, how many views you had, how many subscribers, what kind of tags you have on your video. However, in the kind of more social way of discovering,

this will be based on who are you following, which YouTubers appeared in each other's shows. So there are many ways of discovering content on YouTube. So for example, in YouTube, we have the users that are selling their attention basically, you have the content creators and you have the advertisers. Yeah. And we have sort of this link structure, like you said, right?

That videos linked to each other, the users linked to each other by subscribing to contents. So is it the case that this link structure is actually the heart of how YouTube works? Yeah. So, yeah. Now I understand your question. So, yeah, so every social platform, and I would say, you know, even the web with hyperlinks, Facebook with likes, sent YouTube with subscribers, has its internal model of transactions. So, you know, basically users can subscribe or users can like something or I can hyperlink, you know,

some website from my website. And so it all creates a kind of a local reputation system that's, that's, that's, used for discovery. So my observation is that these are all local kind of link structures that are assigned to a particular platform. However, when you look at the Bitcoin blockchain, and essentially like, you know, in blockchings in general, the transaction structure between addresses can be considered like a link structure like we have on this social platform. And this can be used, you know, and this link structure is also used for discovery already. So we have these companies like, you know, coin analytics, chain analysis, which are basically

parsing the Bitcoin blockchain. Of course they're doing this to discover, you know, fraudulent transactions. Maybe the fraudulent transactions, they want to kind of sell compliant services to the banks. Whether you consider it, whether that's good or bad for Bitcoin, you have the reputation system on the blockchain in the same way you have a reputation system and the link structure on YouTube. They are just used for different things. Let's take a short break to talk about the G-Tech blockchain contest.

G-tech, the German Tech Entrepreneurship Center, is a new center in Berlin for entrepreneurship, and they want to support exciting projects happening in this space. That's why they're running a blockchain contest together with RWE, which is one of the largest energy companies in Europe. and Globomba's Foundation supporting entrepreneurship. You can participate by submitting your idea for your project and win up to $50,000 in free grant money. That's equity for you.

Just take the money and do what you want with it. Anybody can apply whether you're an early stage startup and perhaps you just have an idea, a blossoming idea, or you can apply if you've already raised funding and are well on your way to becoming the next multi-billion dollar company. And anybody can apply whether you're in Berlin and Siberia, in Shanghai or in San Francisco,

there's no geographical restrictions, and anybody who applies can win up to 12 months of free office space in Berlin, free mentoring, legal support, et cetera. Of course, that's totally optional. If you want to stay in Siberia and work on your blockchain startup, you can also do that.

The application deadline is March 31st, so make sure you submit your idea as soon as possible. You can learn more about the contest and apply by going to EpicentonofBitcom slash G-Tech, that's G-TEC. And we hope you'll win. We hope you'll make it to Berlin to collect your money and that we'll get to hang out in person.

Now, we would like to thank G-TEC, R-W-E and Clubbombus for their support of Epicenter Bitcoin. So actually, let's take an example to clarify it. And let's take the example of this channel itself, Episand-a-Bitcoin. Now, at Episputt of Bitcoin, we are creating content. And ideally as you're saying, like, we have to think of EpiSend of Bitcoin, any content creator as trying to build its reputation or trying to get, trying to communicate to other

people that, hey, here's something that's valuable and follow us, listen to us. And yeah, just like consume our content, right? And the higher reputation we have, the more people we like to follow us. And what kind of starts to become important to us is that somebody tweets our video. Let's say we make a video with you and somebody on Twitter tweets this video 10 times. So basically the act of somebody else tweeting that video generates reputation for us because somebody will see his tweet and come to our channel. The problem, maybe not a problem, it's a feature of Twitter and it's good to use these platforms. The problem is that epicenter Bitcoin has many identities online.

There is YouTube epicenter Bitcoin, there is SoundCloud Epicenter Bitcoin, there's iTunes Epicenter Bitcoin. So all your identities, so what I'm arguing in my articles is that your content is, your content can be copied. I can go to your channel and copy your video to my channel and it's going to be as valuable. You know, a few people will have the same show. But what's important is the link structure. And the list, this link structure is locked within YouTube, locked within SoundCloud, locked within iTunes. So you cannot take this link structure out with you and you don't control this link structure. So all these reputation systems are locked. But at the same time, and this is the example I can

maybe used to make it more clear, you have your tipping address, yeah, on your, in your description below the video on YouTube. So you have your tipping address and you are collecting tips. So imagine now, like, you know, you will have a commercial break. Like we have, you have these commercial breaks. So somehow you are selling this reputation that you have, this very abstract reputation that was built on all these platforms. You're selling these to advertisers. Probably you do it. directly, you have a deal with someone, somebody's like paying you to reach your audience. But this you have to do directly.

So imagine if you would use this tipping address, and you can make this experiment even on the show, that you will say that now you are selling 10 seconds slots on your show or like 50 words slots. and from the block number X, whoever sends you a transaction with the link in Op Return or you can even use the blockchain info public notes. You know, they have a feature when you can attach the note to the transaction.

And basically you can start selling your ad space on the Bitcoin blockchain using a very simple system. People can pay you for these slots and attach links. with a message or with a link or whatever they want you to read. You can even create a simple auction system where you say like if I receive more than, you know,

10 offers, I will choose the ones with the highest bid or you can use the timestamp as a ranking factor. So suddenly you are able and people will have this reputation of you because, you know, collected via Twitter, YouTube, SoundCloud, but suddenly you will have this avenue on the Bitcoin blockchain where you can actually start selling these. People can start linking to you on the platform which is not owned and controlled by anyone else. I don't know if that maybe gives you a better understanding of what I'm trying to convey here. Yeah, I mean, so the idea here is that

you would use a Bitcoin address attached to a piece of content in order to send value you to that piece of content. And what you're saying is that by having it on the Bitcoin blockchain, regardless of whether your content lives on SoundCloud, iTunes, YouTube, your website, or Medium, or one of these multiple platforms where people produce content and publish content today, the content is attached to a canonical Bitcoin address. And that canonical Bitcoin address is where people send, what they feel the content is valued at?

No, they actually, they don't even tip you. You know, you can use the example, and that's maybe even a better example, of the Genesis blog and the Satoshi's kind of address. Everybody's considering this is owned by Satoshi, and if you go to blockchain.info and check this address, there's a lot of transactions that are being sent there with public notes on blockchain.comfo,

and people are advertising their sites, why are they doing this? They are doing this because this address has reputation. They know that people are looking at what's happening at this address, and they are basically trying to get exposure to that. So imagine now if Satoshi sends one Satoshi transaction from his address to one of these sites. Like he links back.

the value of this like the Bitcoin value of this transaction will be very low just few Satoshi's a couple cents but the economic value in terms of attention and reputation for the site that was

linked by Satoshi you know it's huge so this is the attention reputation that can be traded in this way okay but so this this I guess how this works

so you you have a a way of attaching data to a transaction, which only exists in blockchain. Not info, but let's say it's generalized. Yeah, yeah. Let's say you can,

it's like generalizing the protocol and you can see it on the ledger. Yeah, yeah. Any block explorer can read it. That still lives a side of the content. It doesn't exist in the content. And if you want to advertise something, for instance,

because that's what people try to do, right, with content, is they want to get attention in order to be able to push products and services through advertising. If you do that, it still lives on a side of the content. It doesn't live in the content. You still have to go and find it. It's not clear to me how that's valuable for someone trying to publish some sort of message or advertise some service or product. Yeah.

What I'm saying is that the discovery, like the blockchain becomes maybe it's very slow. and that's not visible to everyone yet. But these behaviors show us, like, you know, people sending links to Satoshi or if there is a kind of synchro ceased coins address and it's being advertised on Reddit, then suddenly people start sending messages, you know, sending transactions. I'm saying blockchain.info because they have this public note feature, people are just basically using that.

What I'm saying, that blockchain becomes a discovery layer for content. And discovery is everything. Like, you know, who owns discovery, you know, makes money. So that's why, of course, like the web is open, but Google owns discovery and Google makes money because, like, you know, everybody's going to Google and, you know, to find websites. So what I'm saying is that by using these addresses

and by using identity, which is not tied to any particular service, and the blockchain identity will be able to send and receive transactions and these transactions will have some metadata attached to them. We can start thinking about the protocols where basically likes and links and the subscribes are the same kind of first-class citizens as value. So the value can be transmitted in the same way the likes are transmitted. And we can build all sorts of... I know it sounds very abstract because all sorts of applications could be built on top.

The observation is that we can have attention and reputation and value traveling on the same network. Because right now it's not the case. I have sort of an imagination coming and maybe that helps clarify or maybe it leads to a different question. So let's take Epicenter Bitcoin itself, right? what epistence of Bitcoin, like as a rational economic agent wants, is to maximize the views, right? Like how many people are going to see the totality of all the content we have produced over time. Right. Now, whenever we release an episode, I always see that Sebastian, for example, goes to LinkedIn,

and there's a Bitcoin P2P currency group, and he posts on that group that, that, you know, this video from us came out. Now, what Sebastian has really done is he took, like, our, our, the address of our video and created a link to this address of this LinkedIn group, basically. Man, that I didn't do anything. Buffer just does all that automatically. Yeah. Yeah.

It just goes right. So, so basically you can think of, like, you can think of it as a link between these two things. Now, why do we do it fundamentally? We do it because in the hope that perhaps there's some other guy who's who is going to discover our content based on some conversation that happened on that post in LinkedIn. Yeah. Right. So, so this link is kind of a generator for us. Yes.

This link allows us to generate a path, a road from which new users can come to our content. Yes. Right. And for Epicenter Bitcoin, it's just not this one link, but like for every video, we are creating a lot of different links. And then we are also linking the videos to each other. So say, we might, you know, do a set of videos on, say, zero knowledge proofs. Yes. And these videos, you know, depend on each other.

So if somebody sees one video, then automatically we say in the description that, you know, see this other video if you like this one. So, you know, all our content is also linked. And all our content is linked to things in Twitter, things happening on LinkedIn, things happening on Facebook, etc. Yes. So in a very rough sense, you can imagine as like spiders trying to build this web. Yes. Right?

And the better a web we build, the more people can come to us. Yes. Right? Now, what you're saying essentially is, that today, like, we have this link structure, not only Epicenter Bitcoin, but each content creator has this link structure. Yes. But this link structure is owned by the platform,

maybe Google Search or LinkedIn. Exactly. And that's the most valuable thing, this platform own, because you can take out your content and copy it, but only these platforms can see the full picture of this social graph that's being built. And unless we can build the alternative, which is open and transparent,

take, basically use the existing reputation, mobile reputation system and being in parallel start building something on the transparent public ledger, the blockchain, whether that's the Bitcoin blockchain and some other blockchain, and then we can start replicating that. But what we have on the Bitcoin blockchain is that we have the same linking capability,

maybe not as scalable as on the centralized platforms, but we also have immutability, so you can always see what happened and the history cannot be changed. And we have value. So suddenly links can transmit value. On Facebook, you know, the dollars are on the separate network and the likes are visible, but there is no value

which is traveling in the system, like, you know, the monetary value. There's a reputational value and there's attention. So what I'm saying is that basically right now Epicenter Bitcoin has all these identities within the system, like all these identities on all these different platforms and your ability to get monetary value for your work, but basically your ability to exchange reputation and attention for money is limited by what the platform operator allows you. Because on YouTube, you will be able to do AdSense. On iTunes, you'll be doing subscription, and so on and so forth.

But you're limited by that. So imagine that suddenly there is epicenter Bitcoin identity on, let's say on Ethereum, and suddenly we can start receiving links along with money on the blockchain, basically on the link structure and you control. Because we are focused right now in the narrative that we have around content,

in the blockchain space is that we should own our content. What I'm saying is that we should own the links that are pointing to our content because this is where the value is, because all the reputation systems and the discovery models which will be built on top of that will have to be built on top of the link structure because this is the reputation system that you have. Okay, I think I start to get it. So one of the statements that you made on your blog is that Google Bank is the

central bank of links. And when you describe this type of link structure, you basically have several central banks. Like you have Google and page rank. Yes. And you have YouTube and SoundCloud or all these models that we've been talking about. What you're saying is as content producers need to own the link structure. Yeah. Okay.

So then they own the link structure. But that's still, to me, there's still a piece missing, which is the user interface part. like Google has the search results page, Facebook has a feed, YouTube has suggested videos or whatever. How do you, because you can't have one without the other. You can't have the link structure without the discovery interface. Actually, you like... Or can you. You can. Actually, you can. It's, of course, like, the only way we've seen this combined was like, because when you look at Facebook, You don't think about the infrastructure, the database, the reputation system and the discovery model. These are all are combined. But what decentralization is doing is what's going to be happening is all these components will be unbundled.

So imagine that Facebook, like Facebook graph is available to you not via an API that just gives you part of the picture. it's available. So everybody can build, so for instance, Buffer can compete with Facebook in providing a better interface. And if Buffer provides a better interface, they suddenly control attention

and suddenly they start making money. So imagine with Google, imagine if everybody would have access to Google's graph of the web, and everybody could build a better Google. So like with a blockchain, we have the full picture. Like everybody can build a wallet. Everybody can build a blockchain explorer.

What I'm basically saying is that you can take the blockchain explorers analogy and apply this to discovery and future interfaces for future social platforms. They will be like blockchain explorers. Every blockchain, like the blockchain explorer will have to give you the same kind of view of the system. because they want to provide the objective view of the blockchain. But imagine blockchain explorers with various ranking systems. So at the end, you control your links, like you control your wallet, but you will use the blockchain explorer,

which provides you the best return on your attention, and you'll be discovering other content through these other interfaces. So suddenly you control the links, and you have a marketplace of interfaces. I don't know if that's clearer now. Because of the unbundling, you cannot have the interface tied to the link structure. It does make a lot more sense now. Now, the question is these block explorers or content delivery platforms show the objective view of what this link structure is,

how would they monetize? I guess it's another question. They will never show the objective view. The objective view is only in the Bitcoin's case. Facebook never shows you the objective view of the Facebook database. They always show you kind of the subjective view, which is tailored to your preferences on Facebook. Reddit shows you a different view, which is based on some other ranking system. And Snapchat will use a different, like Twitter is objective in the sense that there is time.

timeline and everything is ordered by time. So you have all these ranking systems and all these like the difference between Twitter and Facebook essentially is just the interface. Well, Twitter is changing too. You know, Twitter also has an algorithm now which puts content. Yeah. Yeah. Yeah. Yeah. Exactly. But in this system, you could have an open market for these interfaces. You know, you own the links. You own the, you own the underlying, the objective layer. Competition is on the subjective layer, because you can never look at the entire blockchain. You can never look at the entire Facebook. The system can be decentralized, but we as humans are centralized.

You can only look at one thing at a certain time. And we will never be able to go beyond that. Decentralization is the feature of a system, but you can always discover stuff through a certain interface. And that's where the value is. Where attention goes, the money follows. Today's magic word is attention. A-T-T-E-N-T-E-N-T-O-N. Head over at let's-stock bitcoin.com to sign in,

enter the magic word, and claim your part of the listener award. Let's kind of recap and kind of summarize what we have covered, because it's important. So what you're saying is in any platform, Let's take the example of Facebook. In Facebook, I have an identity and I have content that I've created and this content is linked to what other people have done. Like if somebody posts something and then I comment on it so you can imagine it as like me creating content that is linked to something that was created by somebody else, which links to say a YouTube video created by something else, somebody else.

So what all of the web is essentially what you're saying is, is these links of content and identities from and to each other. Yes. And now what you're saying is there is an objective reality, which is the link structure as it is in Facebook's database. And then there's a subjective view for each viewer. So Facebook owns this, has knowledge of what the link structure is, of all. all of this content that is on its platform. It sits in its database. Yeah.

And then when, say, let's say, Sebastian newly joins Facebook, Facebook creates a feed for Sebastian. Yes. But it is giving like a subjective view into this link structure to, so it's like you can imagine it like there's the microscopic world, and then there's a microscope that allows you to see it. So what is happening is like the microscopic world is, like, you know, this link structure that Facebook owns,

but not only does it own that link structure, but it also owns the microscopes through which you can see that link structure or the devices through which you can see that graph of content, right? And this microscope, this discovery model, is optimized in a way that the objective is to keep you engaging Facebook. because like if you are engaged in Facebook, this is how Facebook makes money. So it has to be optimizing. So if you have a lot of like viral content and it's like people are clicking and sharing stories that are sensational, but it's like it keeps them, it's in the interest of Facebook,

but it's not really in the interest of users because the return on attention they're getting in this model is lower than it would be in some kind of other model where there is no Facebook in the middle. Everything is optimized. So your attention is optimized in a different way. Okay. And now what you're saying in essence is, what if this link structure was built on Bitcoin, you know? Or the blockchain, possibly.

Bitcoin is maybe not too, like not that scalable to build something like that. You know, I would go even further. I would say it's already being kind of built naturally. Of course, and this is what the chain analytics companies are doing. Of course, they're kind of at the same time, you know, maybe destroying the fungibility of Bitcoin because, yeah, if you can assign certain identities and see, like, you know,

so they're basically building reputation systems for Bitcoin, for compliance reasons, of course, and then they're selling it to banks. But if you take a different perspective, you could, if you could have contents in this, like, you know, links between Bitcoin transactions, you could build a discovery model on top of that, in which people would own these links, own their identities, and they could plug into different interfaces. So, for instance, like, from the perspective of the user would be, you know, I can take my Twitter history and plug into Facebook or plug into, you know,

whatever new social media platform comes up and social media platforms would be essentially interfaces and the barrier to entry would be really low so you just create a better interface and attract users. So in a way like with YouTube, like in the past, everybody could be like to broadcast video

to millions of people, the barrier to entry was huge. You would have to have like you know the equipment and the legal issues you would have to be sorted out. Right now you can do it on YouTube for free as we're doing it right now.

If this evolves in a way that I'm seeing this, the same will happen to Google and Facebook. You will, like, creating your Google or creating new Facebook, if you have the public ledger with all the social transactions on it, will be just creating a new interface. And everybody can switch.

immediately. Like you can switch a channel on YouTube. You have a new YouTuber who's coming up with a new content and people can start watching him immediately and the cost is negligible. So in this world, in this world where there's the link structure is open and then there are explorers built on top and anybody can build an explorer for cheap. What does, what do business models look like? How does the market between advertiser content, get changed in this model? Actually, the basic principles, I'd say they're the same. You know, it's like attention, reputation, money are these essential

scarcities that have been with us for centuries. Just the platforms and the underlying technologies change. So it's the same, you know, Bitcoin made me think about that. The essential value of money was always the same, this abstract. value. You know, we had shells, then we had, you know, fiat currencies, we had gold. Now we have Bitcoin and it all represents the same value, but it uses a different medium. So essentially, this wouldn't change. But what would change is that because we have suddenly, suddenly we have the objective time, what the blockchains give us and the centralized platforms

don't give us is the concept of the objective time. Right now, for instance, the time, at the time is locked to specific platforms. So, for instance, you cannot say, who was the first person to link to Justin Bieber? Who discovered Justin Bieber? Like, Justin Bieber uploaded the video. He was always, like, you know, later he was discovered by some talent scouts, and he got super famous.

But who was actually the first person to link to Justin Bieber? It's impossible to tell. Because Justin Bieber, in his digital identity, lived on YouTube, on Facebook, or somewhere else on a WordPress blog. And you didn't have the objective time. With the blockchains, we can always tell, you know, who was the first to link to someone, to send a transaction, to pay for something. So you can imagine that some kind of speculative models can emerge.

Like right now, you know, I'm basically saying that, you know, speculation is one of the killer apps of cryptos. Like people love to speculate, people are always speculating. So imagine that if you could speculate, you could invest money in someone. Like, you know, imagine you the first person who discovered Justin Bieber. So like, and you are the first person that links to him. And then he gets big. And everybody looks at the blockchain as the canonical reference of, you know, what happened.

So suddenly you get big. You get a lot of attention for that. So you could buy, for instance, like attention futures in some artists. Like, suddenly you could have, like, it's already happening. These people are talent scouts. People are scouting for talent, you know, investing reputation and money to discover future artists. So in the same way, you could have a system where this is disintermediated and decentralized. And, you know, I'm tipping.

And it's not tipping anymore. You know, it looks like tipping. I'm sending someone a small amount of crypto, but not to kind of. express some gratitude, but I're actually investing in a link that's going to stay there. And if they get big, the discovery model will emerge

in which I will be ranking really high because, you know, I'm the first in the objective history of time. I'm the first person who linked to them. I don't know. That makes sense. I know it sounds very abstract, but it does make sense theoretically. I understand the speculative model behind it. However, I don't understand what the incentive is. If I'm just like me

and I, you know, Sebastian and I happen to find Justin Bieber and I link to him okay, I'm perhaps I want people to come to me for other things like consulting, you know, because

that's what I do, but like as as I guess I guess the attention that I would get from being the first to link to Justin Bieber is not going to serve me as just an individual or as a professional in my line of work. I would say it would serve you a lot.

Like, you know, it's happening like, you know, you hear this often with like, you know, models and singers. Like, no, they were discovered by X, Y, Z, you know, first discovered by X, Y, Z. You have professionals who are doing this for a living. Of course, they don't do it on the blockchain. It's all. Yeah, but they do it for a living. I don't discover artists for a living.

I like music and I may discover an artist and I may want to share that with friends. Like if I discover an artist, if I like, and this has happened before, like, where I've discovered like this really kind of really cool 70s rock band that nobody knows about and I go around and like tell all my friends about it and I'm all my friends like it. And they somehow think that I like, I'm, they're, what I get from it is the reputation of being someone who likes, good 70s rock music. Okay. Well, that may serve my ego, but it doesn't really serve any economic,

I don't have an economic incentive to do that. It just serves my ego in this very small circle. No, it affects economically. This is what I'm kind of trying to explain here, that economically in the context of your social circle, your reputation goes up. He's the guy who was like, you know, first could discover someone. And this is what people, I would say, naturally do.

Like, and it's like, you know, translating this to page rank. If you have an old website, like domain that's been there for ages and Google recognizes that, you know, you can rank really high. Or if you get a link from a really reputable website or you got it in the past, you know, in certain Google's algorithms, this might be considered as a reputational signal, which is positive. So what I'm just saying is that this concept of objective time can be used to create all sorts of interesting models that are not possible right now. And these models could be based around speculating about somebody's future. Like, you know, if you're buying a cryptocurrency and you're speculating on, like, for instance, Bitcoin.

So you're investing one Bitcoin like, you know, $100 now, and you're expecting that you're expecting that you're, make $500 in a couple months. So imagine if you would be linking to someone or tipping someone, expecting that their reputation will go increase in the future. So you will not receive direct monetary reward, but you will have a reputational return on investment. Because you can play with all these scarcity. Let's take a short break and talk about

hide.me. You know, setting up a VPN on multiple devices can be complicated. It's say you want to do like three devices and you have 10 different exit nodes that you want to configure. Well, that's 30 different configurations that you have to do manually in each of those devices OS and that can take a long time. Hide. Me makes this super easy with their apps. So they have apps for Windows, MacOS, Android, iOS, and Windows phone. So you just install the app, log in and boom, you're ready to use VPN with hide.me. So this is perfect if you're trying to be. you just install the app on your devices and say you're using public Wi-Fi, you turn on the app, you connect, and you're completely protected against hacking, men in the middle attacks,

or any type of malicious activity. And of course, the apps work with their free plan. To try out their free plan, head to hide the me slash epicenter. It includes two gigabytes of data which is more than enough to keep you protected when you go traveling. It also includes three exit notes in Singapore, Amsterdam and Montreal. Montreal and if you use all your else or high top me slash epicenter it's going to give you 35% off if you ever decide to sign up for a premium account and their premium account includes unlimited data it includes up to five devices connected simultaneously so you can put your

grandmother using a VPN even your dogs tablet you can put on a VPN and you can use any of their exit notes and they've got 30 exit notes all over the world and And of course, you can pay with Bitcoin. So give it a try, and we would like to thank HaTotMe for their support of Epicenter Bitcoin. What are we speculating with? So if I put a reputational token towards a new artist that I discover, what does that represent? And how is your scarcity created around that so that I can't just create new ones? Are we talking about a different currency than Bitcoin?

Or is this something that's built on top of Bitcoin in the way that you can see it? Like, how do you... The blockchain, the interesting scarcity in the blockchain that I think that hasn't been explored yet is the scarcity of time. The blocks just increased one by one. And you cannot roll that back. So the scarcity you have is the kind of reputational scarcity that back in times, like, you know, oh, I wish I bought Bitcoin, you know, back in 2011.

So in the same way, I wish I was the first guy who kind of liked something, like this guy or like this meme or like something else. So right now, there is no discovery model in existing social networks that exploits that. My insight is that there is a lot of interesting models that we could explore here that are not possible under the current parallel. But I understand that to make it more clear, it should be kind of embedded in a really particular application. But the possibilities for applications are really endless here.

So, yeah, like the idea itself is very interesting, but I somehow feel that like Bitcoin, although Bitcoin is the kind of the perfect thing for having an open link graph because you know you can have data, reputation, identity and money on the same network and on the same data structure, that data structure is just isn't scalable. Like you can't, it, data such a growth because transactions get added every 10 minutes, but it grows only very slowly. and the data structure of information on the web grows so fast because maybe thousands of links

are being added per second. Somehow I feel that there's a mismatch between what the system offers Bitcoin and what you are proposing on the other end. Yeah, just to make things clear, I'm not saying this could be built on Bitcoin. Bitcoin is just like the first step and it's showing.

shows us that there is an emergent kind of a reputation system that happens on the blockchain, and this is what the blockchain analytics companies are actually trying to leverage. However, if we wanted to build Facebook equivalent, like a decentralized Facebook, it would have to be built on a more scalable infrastructure. And of course, we could go into details, and I'm not. competent enough to kind of deeply explore all the scenarios and options. However, innovations like, for instance, Big Chain DB is really interested what the company called Ascribe IO is doing. They're taking a different approach in terms of the application because they want to do

like copyrights management and provenance of artists' work on the blockchain. However, the technology they've built is really interesting and could be leveraged. something like that. On the other hand, identity, I think Ethereum offers a lot of very interesting possibilities for building reputational systems on top and these are being built as well, so they could be leveraged for these kind of models. So I had another question also regarding the evolution of the content model. You mentioned before that we had the Web 1.0 and the Web 2.0 and and how things have evolved since then. We had publishers and content producers and advertisers.

And it seems now that what we're moving towards, rather than having one canonical source of content where people used to say, you know, experts used to say, post content to your blog, and that's one place where you post the content, and then you link to it on different social networks, that, of course, has changed now. And content producers leverage multiple platforms, and the content lives where the users are.

So, for example, a company like BuzzFeed, their website is nothing but an experimentation platform, and they publish content to Facebook instant articles, to medium, to just about everywhere where their content consumers are. So essentially it's omni-channel for content. And so there's no longer one canonical place where content can live. It lives everywhere. It lives in different places and multiple places at once. in this model So the page rank model

sort of in my view isn't really compatible with that because page rank wants there to be one canonical source and this reputation graph that you described also follows that same type of model where you have one canonical source and you want that one canonical source to be highly regarded and have high reputation.

So how is that compatible with the new paradigm of how the internet and content is now being distributed and published online. Yeah. So, yeah, I'm not saying that the model I'm actually exploring is going to, it's like either or. It's something that's additive. It's going to be additional. So what you're getting is, like, you know, in addition to your LinkedIn, Twitter,

Instagram or whatever your main social media channel is, you are receiving, like, you have this extra. identity, which is controlled by you. And you can leverage this identity to, as I said before, you can start selling, you know, ad slots. Or for instance, you can, like on platforms like Snapchat, people can start bidding for your snaps. So they can start, you can start selling your, for instance, Snapchat reputation. But you can do it outside of the Snapchat platform. and you know you could potentially use like oracles which check whether a particular photo

you know somebody's bidding okay if you post this photo on Snapchat I will pay you one Bitcoin you post the photo of Snapchat you know the Oracle transfers the Bitcoin and but this creates a record in your reputation so basically you can start building your reputation in addition to all those social platforms that you are already using. This is how it happened with the, like, you know, the beginnings of YouTube were such that people were uploading, you know, VHS content to YouTube and basically then the YouTube built its own native content. But, you know, the beginnings were like, you know, you were pulling content from some

other platforms. And the same thing would happen here. It's just an additional avenue that you control and you can build. build it out and you control the links. And the incentive is that, you know, if this takes off, so whoever is first, if this becomes big in the future, so whoever is first will be like kind of Satoshi in Bitcoin, you know, will be in the Genesis blog or in the one, you know, in the first block. So they will be getting a lot of attention.

You know, these guys were pioneers. You know, so there is a built-in kind of an incentive mechanism for joining early. but the rewards are of a different nature. Rewards in the future attention and reputation on the platforms that will emerge. Does it make more sense now? Yeah, I mean, it makes more sense. Like, personally, I've never been good at discovering music. Because I'm a follower when it comes to music.

I got lots of blogs for it. you want. I can search a whole bunch of places where you can discover all kinds of music. Yeah, but like, but like recently, uh, because the value of the ether went up. And I was talking about ether to my friends in, say, August when the blockchain was released and, you know, all my friends back, back in India is like, we are just talking to them ether, ether. And like, now ether went up. Not only did I make money out of it, but what the valuable thing I really made by ether going up is that now suddenly my view counts for a lot more like you know if I if I if I say some other currency is useful then my view counts for a lot more so

it's it's it's like I told them about something it's like I link to content I link to content about ether and because I did it early I am valuable because I discovered ether for my for my friend's circle. Yeah and your like reputation now is probably higher of course there is no record like so it's only like a word of mouth but in your social context in this particular discovery and reputation system now you're getting you're being rewarded but you're not being rewarded with money you are being rewarded with reputation. Of course, now you can go to them and say, look, guys, you know, I want to sell you this.

And they will say, wow, yeah, I will buy this from you because your reputation went up. This is exactly what's happening, you know, on the web every day. However, it all goes through the middleman. So if you are selling ads, if you're selling your commercial breaks in epicenter Bitcoin, you are either going through a middleman through an ad network

or you're doing this directly but there's always a middleman. What I'm saying is that what if this could be done in a peer to peer fashion that there is no middleman and like in the same way I'm liking you on Facebook

I could send you value or I could invest in you or we could build like endless amount of different models based around that. So, very interesting. Like, it slowly starts to make sense. It starts.

Yeah, I know. You have to digest it. Yeah. Well, to me, it's slowly starting to make sense. I think I just have to listen to this interview again. Or perhaps make more. The trick, the mental trick you have to just make is recognize. It's the same mental trick that was necessary for understanding Bitcoin.

But value is something more abstract. And you don't associate value with. with a piece of paper, you know, with a dead politician or a king and the number printed on it. It's not in this, value is something more abstract. This just conveys this value. So in the same way, you have to think about likes or subscribers or HTTP links. They just, they're just a medium of exchange. But what's being exchanged is something much more universal.

It's attention and reputation. And we had that before the Internet. And it was always like that. And attention, money, reputation. And it was always there. And we can separate this from the existing platforms and build the more kind of abstract models. We can make a giant attention money reputation network or blockchain or Merkel tree, basically. A giant attention reputation value Merkel tree.

Yes, but the attention will be like the way, I don't want to go too deep into that, but these are different types of scarcity, which humans naturally recognize. Like people are competing like, you know, with selfies on Instagram. Everybody's like, you know, go to Instagram and see what's happening there with teenagers,

like, you know, taking selfies and tagging. You know, there's no money to be made there, like directly. There is money, but it's indirect. But what they're collecting, his likes and followers, so there's attention, reputational currencies. And people want that, like, because it's a part of human nature, in the same way, people want money. And people will quickly recognize what's the internal reputation system of the platform,

and they will optimize for that, consciously or subconsciously. So is this like something you're doing in theory, or are you trying to build a proof of concept, are you trying to raise money for it, What's these status? Yeah, so what we just talked about is, you know, I'm trying to understand and kind of, this is the drawing board stage, when I'm trying to actually figure out what are the general principles of the social platforms, like the media platforms, and of course the next step is to experiment with proof of concepts. And I have several proof of concepts in mind.

So if anyone is working on projects which are related to monetizing content online, please reach out to me. I would love to connect with people working on the same things. But for people, like, you know, the applications that are based on this model should be what I'm saying, like Tinder simple, Snapchat simple, super simple. They should embed these building blocks. but for the user, we have to experiment with something which is really understandable with these principles in mind, because people will optimize for these principles.

Like it's happening on Snapchat and people who go on Snapchat or Instagram, they don't think about economy, like, you know, attention, reputation, but they intuitively know if they get followers, they can sell it, it's valuable. they immediately trade. Like kids are immediately inventing money. They don't know anything about the economy, but just it's a building the human nature.

So, yeah, I'm very interested in experimenting with proof of concepts. And once this proof of concepts validate certain of these ideas, because these are just kind of certain observations that I just presented you, yeah, then possibly maybe raising money or if this takes off, maybe it could be self-monetized in a way,

because this would be getting attention and reputation, which could be being sold immediately. So if this takes off, this will get attention in reputation. I hope this just doesn't create a way to monetize being an attention whore because that would just suck. People are just such attention whores already. If you also add a monetary incentive to do so, and it wouldn't it wouldn't be anything new it would be right that's already happening but just on the

different infrastructure and in an open and a transparent way because in this system all the money flows are visible like right now you don't know what youtubeers are really making you ask me this question so on this platform you would see like you know how much money is flowing where to whom for and for what so this is like you know the face Facebook ad platform, which is suddenly visible to everyone. What Mark Zuckerverse sees now, in this model, everybody will see and could kind of base their decisions on that. So where can people find you in your writings?

Yeah. So my Twitter is Machie Olpinski. You know, I'm at Machia Alpinski. My website and the blog and the mailing list is at macha alpinski.com. Maybe you can put it in a show notes because. Yeah, we'll put it in the show notes. I won't be spelling this. No one will just get it.

So if you can put it in the show notes. And I'm very interested in connecting with people who are working in similar problems because a lot of work is being done on these things right now. But however, a lot of people are working on the infrastructure, like we're interested in the technology aspect.

And I think the media economy aspect sometimes is being like left out a little bit. So I'm focusing, I'm focusing solely on that. Well, Mascha, thanks for joining us today. It was a great conversation. Thanks, guys. I'm looking forward to your next blog post. I found them to be incredibly insightful and very well written. So thanks a lot for coming on and for the great content. So to our listeners, thank you for listening. We published new episodes of Bitcoin every Monday. We are part of the Let's Talk Bitcoin

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