So, as I continue thinking about this project in question, (which claims that it can somehow challenge the Google AdSense monopoly in ads business) I can see the three major points this project emphasizes, describing the problems with AdSense.
First, the advertisers are concerned about the opaque nature of algorithms Google uses placing their ads. Naturally, the company owners are worried that the wrong placement can damage their brand. For example, if their ad is shown on the sites with inappropriate or extremist content, it can lead to the situation when their brand would be associated with the content of those sites (inappropriate or extremist.) There was a scandal related to YouTube placing some ads on the pages, containing videos of extremist organizations, which eventually led to some brands withdrawing from Google marketing programs altogether. I don't think it's a systemic problem; the referred case is more of an exception. But the thing is, AdSense algorithms are really not transparent, so nobody can predict where their advertisements are going to end up, and, naturally, it can be frustrating.
The second point the company X underlines is that the majority of site and blog owners are generally frustrated by the fact that they cannot make any noticeable profits off ads. Most likely it's their own problem, maybe their sites and blogs are not that interesting and have few visitors. Plus, I think this also can be due to the presence of ad blockers, and the fact, that few people have a habit to click on ads. Maybe the whole concept of placing ads on the sites is wrong, like maybe those who read those sites to glean some valuable information about the world, say, some new ways of making pastries, are not at all interested in clicking on the banners or buying anything. (In my opinion, tv ads, for example, work differently and utilize that subconscious subliminal effect, which manifests itself much later.) Ok, another major butthurt of publishers is that AdSense has the rules they need to follow in order not to be penalized or outright kicked out of the program. There is apparently an element of truth in that Google has a huge amount of rules concerning ads that are difficult to remember. Plus those rules can change every now and then, which makes things even more confusing. In general, anybody, who's trying to make a living by placing ads on his/her site, faces the constant risk of being sanctioned by Google without any preliminary warnings or subsequent explanations.
The third point: The users who visit those sites with the ads on them unintentionally share some valuable information about themselves that can be used for marketing purposes. And since, as the company X claims, it's valuable information, those users shouldn't share it for free. They should be paid for those incalculably precious insights into their psyche and patterns of consumer behavior. In my personal opinion, it's pervasive bullshit, and I keep seeing those notions about "valuable" user data again and again. It's like a conspiracy theory in some ways.
So, anyway, this company X intends to solve those problems, although, it's not particularly clear how. At least outlining those partly made up problems helps to make an educated guess. First, as opposed to AdSense opaque algorithms, company X will allow advertisers to control where their ads will be placed. Taking into account human nature, it means that none of those ads are ever going to be clicked upon, but, nonetheless, it's a good intention, one of those paving the way to hell. The second challenge the company X is planning to overcome is making publishers satisfied with their ad revenues. It's likely that AdSense really somewhat rips off publishers, taking a lion's share of their profits. Plus, there are other inconveniences with this system like bureaucratic procedures the users need to pass to be able to receive their earnings, plus an inability to withdraw money immediately. So the company X is going to take much lesser commission than Google and to allow the publishers receive their earnings right away, and in general, making things more simple and convenient. The third thing, it somehow will allow users, visiting those pages with ads, to be rewarded for the statistically valuable information they inadvertently provide just being on that page. Ok,
Ok, 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 distributed file system (so-called Interplanetary File System IPFS) to host videos, plus it features closed token economy like that on Steemit. Like, 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 - a group of volunteers, aiming to prevent copyright infringement and eliminate the presence on the platform of some disturbing, violent, pornographic, or extremist videos) Like, I upload 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. The similar startup I reviewed 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 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 platform X 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 the volunteers, who are not responsible for the thoroughness of their work. And their only incentive is the tokens they get from the system. So that naturally means that there is going to be chaos and anarchy on the platform with pirated content, porn, extremist materials, and stuff like that.
If it were a normal IT project, such situation would quickly lead to its ban, with its servers shut down and other repercussions. But that's where the things start to get interesting. The project X 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 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 the 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 those separate computers comprising the system, elimination of any of which won't do the system any harm. Like, trying to do something against the 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 torrent ecosystem as a basis for video streaming services. But here there's also an element of cute blockchain micro-economy thrown in the mix. So to sum it 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 the videos gets tokens. Anybody whose videos are watched gets token as well. I fail to understand how all this fits the scheme of normal monetary exchange, but, nonetheless. Probably, each time those tokens are just produced out of 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 the 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 happens 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 to AdSense program. And after you do, you learn the 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 the 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 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 the potential profits that can be extracted from placing ads on the 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 to bring 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 were made cornerstone in such projects as Patreon. The main concept is: if I like the certain content or the author, I'd likely be willing to either support this author through voluntary donation or to subscribe 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 the viewers directly finance content they like on 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 the 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) in return by liking their own content. In the end, it doesn't seem like this system is going to bring everybody huge profits either, but it creates an illusion of lively money flow, which is the whole point. An illusory potential 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 for it 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 for me, motivating me to engage more actively.