Web3 and the New Creator Economy
The first time I tried to explain Web3 to my grandparents, I walked them through the evolution of the internet: Web1 as the era of information, Web2 as the era of creation, and Web3 as the era of ownership. Admittedly, it took a little more detail than that to get Grandmom and Granddad up to speed, but even when someone that works in tech or owns a little Eth asks me to explain my job at Space and Time, that narrative is typically where I start.
When the average person hears “Web3” they picture Bitcoin and a Bored Ape, and if you introduce concepts like smart contract automation or decentralized off-chain compute, their eyes start to glaze over. But blockchain technology is more than a novelty; it’s empowering real change in spaces that we all participate in and are affected by. In my opinion, the most important vessels of this empowerment are the ‘picks and shovels’ projects that lay the groundwork for mass adoption of Web3, like the decentralized data warehouse we’re building at Space and Time. But, to the Bitcoin and Bored Ape naysayers, making the connection between a Web3 data warehouse and positive change in their everyday lives is a substantial leap.
If we’re going to evangelize, we have to work backwards, starting from easily digestible use cases. I’m a GenZer with a background in content marketing, so while the people in my life know next to nothing about data warehousing, they’re very familiar with things like content creation, social media, and the creator economy. I like to work backwards from there.
Creator economy: a relic of Web2
The creator economy is an internet-empowered system where people earn money by creating content and marketing it on an online platform. Unlike in the consumer economy of the 20th century, where media was curated and controlled by big studios and conglomerates, anyone can participate in the creator economy, so long as you have a smartphone and an internet connection (and, arguably, some talent).
Now, as a musician for example, instead of relying on a record label to distribute your music, book your tour, and sell your merch for only a small portion of the profits to be returned to you, you can upload your music to Spotify and YouTube and generate revenue through ad sales, sponsored content, or paid subscriptions. You have more freedom in where and when you profit from your content, and you have access to your fans and community. The problem, though, is the same: only a small portion of the profits are returned to you.
If you’re a TikTok creator with a certain number of followers, you get paid for the views you generate. Your content creates revenue for the platform, and TikTok rewards you by sharing some of it. How and how much you earn is completely at the discretion of TikTok, governed by the sovereign and opaque ‘algorithm.’ Even more, TikTok can at any point revoke your earning ability—when you violate the terms of the vague, inaccessible, ever-changing community guidelines, or when their advertisers decide they don’t want to be associated with your content. This is the best model for TikTok, because it keeps TikTok in control. But it’s not the best model for you as a creator, and certainly not for your earning potential or ownership of your work.
And in the Web2 creator economy, the platform not only owns your content, it owns your community too. If Instagram shuts its doors tomorrow, Cristiano Ronaldo’s half a billion followers go with it, even those that may have joined the platform for the sole purpose of keeping up with Ronaldo’s content. If a creator like Ninja decides to move from Twitch to another streaming platform, there’s nothing stopping Twitch from turning his channel into an advertising medium for other channels, forcing unrelated content on the community he built. Each of these platforms has complete control over all community activity—like whether members can access the platform or whether they get to see content from accounts that they follow.
In reality, media in the Web2 creator economy is not all that different from that of the consumer economy. Instead of Fox and Comcast controlling what we see on the nightly news, Meta, TikTok, and Google control what we see 24 hours a day. Creators and communities aren’t at the mercy of agencies and studios, but they’re still at the mercy of advertisers and algorithms.
Ownership and community in Web3
Web3 offers a new paradigm: immutable reward and transparent ownership for creators and their communities. As Web3 advances, the creator economy is transforming itself from a one-sided big tech playground to an equitable marketplace for all by reimagining the earning model and eliminating the middleman between creators and their communities.
Let’s go back to the musician example. In Web2, you can record your music, post it on Spotify, and get paid $0.0033 every time someone listens (which won’t be often unless you’re part of a recording label that can get your songs added to Spotify’s editorial playlists). But in Web3, instead of trusting Spotify to properly monetize your work, you can cut out the intermediary entirely, create an NFT of the original recording, and receive recurring royalties every time it’s bought or sold. Not only does this process simplify and transparentize the monetization of your music, it puts you in charge of deciding how valuable it is.
And you’re not the only one who benefits. As a creator in Web3, you could also create a fungible token that your fans can mint to receive access to special events or co-creation opportunities, while sharing in the appreciation of your brand as a creator. As your content grows more popular, your token-holding supporters see their reward grow in value. You profit, your community profits, and there’s no centralized middleman taking any of that profit away.
Immutability and transparency through smart contracts
This new model is achieved with smart contract technology. Smart contracts are self-executing immutable agreements that facilitate transactions on the blockchain. They employ simple if/then logic to execute a payment, trade, or transfer of NFT ownership, for example, when a certain condition is met. Smart contracts remove the need for intermediary enforcement of agreements and offer transparency. Instead of trusting that Instagram’s creator algorithm will pay you out the way you expect it to, a blockchain-based social network, like SoMee, pays you out automatically using an on-chain, immutable, fully transparent smart contract.
The problem is that smart contracts are extremely limited in the logic they can execute. They can facilitate on-chain payments for a social media platform, but they’re not equipped to power the platform itself. While a smart contract might be able to say, “If Creator A gets X number of views on her video, she gets paid Y amount,” what about more complex earning schemes? What if we want to reward each view differently based on where in the world it comes from, or what time of day it happened, or whether it’s the viewer’s second or third time watching? Smart contracts don’t have the compute power to factor in these kinds of insights, so the only way to facilitate rewards like these is to leverage scalable off-chain compute—which historically hasn’t existed in a decentralized, trustless environment.
What’s missing? Big data
Space and Time is a decentralized off-chain data platform that connects trustless on-chain and off-chain data and analytics directly to smart contracts to enable these sort of sophisticated use cases. With Space and Time, a smart contract could query the data generated from a social media dapp (with cryptographic guarantees) to facilitate new immutable earning schemes for creators on chain. For the platforms, this means leveraging more complex compute around in-platform activity. For creators, it means transparency in when and how your content is rewarded. For the community, it means a new imagination of how to participate in your favorite creator’s success.
Smart contracts and blockchain have ushered the internet into the era of ownership, empowering new use cases for every industry in the world. As online creator technology becomes increasingly integral to our daily lives, and public opinion moves in favor of data privacy and ownership, the creator economy will continue to decentralize. Web3 is maturing a creator economy that serves individual participants, not just big tech companies, and Space and Time is building the essential foundation of this new model, ensuring that the data and compute remains decentralized, trustless, and transparent.
This article is also available to read on Medium.