The internet is essentially an ever expanding collection of information. As such it holds immense value. In the early 90’s and up until the read-write era of web 2.0, the creator of a website would produce the value - they published the content and hosted the site. Now, with social networks, the users of the platform bring the value. They create content, moderate and rank content, and generate data about their identity.

The internet holds value as a collection of information, as entertainment, and as money. It holds value as a tool to connect people and to help them educate themselves. In 2018, businesses directly involved with the internet generated an estimated $966 billion. With much of the web free to use however, how are people expected to transform this value into actual money?

In the beginning, without a secure way to transfer money over the internet, people sought other forms of monetization. The first, and to this day, the most dominant way to extract value from users is through advertisements. Ads are a common way to offer content for free while still getting paid for the value created.

In the traditional online advertising model, a website or application generates value through their content, users visit the site, and advertisers pay the website for their users’ attention. In essence, the website is selling the user to the advertiser.

Because of this, advertisements can be exploitative and annoying. Websites collect user data to offer advertisers a model of who users are and what they might want. This practice becomes predatory when users are unaware of what information they are giving up and exactly how it is used.

While ads do enable value extraction without requiring users to pay, this form of monetization doesn’t work well with media platforms like youtube and instagram. In this case, users themselves are creating value (in the form of photos, videos, and personal data) while only receiving a fraction of the money generated from ads. This leaves creators underpaid and without control over how their content is valued.

Direct monetization in the form of subscriptions and paywalls is becoming an increasingly popular method of value extraction. Direct monetization enables creators to engage with their audience in more intimate ways.

Imagine a platform where content creators can offer a premium experience to their biggest fans. Exclusive messaging privileges, access to content, and increased status are a few of the incentives offered to fans who are willing to pay. Creators earn more money and fans benefit from a more intimate and privileged experience.

Direct monetization works well in other areas of the web too. Netflix, the popular video streaming service is a great example of a subscription-based platform. They offer value (in the form of movies and tv shows) that people are willing to pay for. This allows them to make original content without influence from advertisers or production studios.

Overall, direct monetization in conjunction with web3 technology circumvents platforms’ influence as tax collectors and enables payments directly from consumer to creator. In an era where creators are producing value for the platforms that host them, it is increasingly important that they are compensated appropriately.

Implied value to explicit value

the transition from web 2.0 to web 3.0 will be characterized by the explicit valuation of almost all forms of data

In the near term, more online creators will move to platforms that allow them to monetize their content directly. Advertisements will continue to exist on the internet but they will be opt in and users will be paid for their attention.

Soon, we will begin to see the most obviously valuable things on the internet come with a price tag (ex: video paywalls, micro transactions for music streaming, platform subscriptions). Eventually services like search, social, and email will require some form of payment. Ultimately, the transition from web 2.0 to web 3.0 will be characterized by the explicit valuation of almost all forms of data.

With cryptocurrency, the value transfer will become effortless and automatic. Payments will be public and transparent. And the internet will become more fair, fun, and trustworthy for all.

The internet is essentially an ever expanding collection of information. As such it holds immense value. In the early 90’s and up until the read-write era of web 2.0, the creator of a website would produce the value - they published the content and hosted the site. Now, with social networks, the users of the platform bring the value. They create content, moderate and rank content, and generate data about their identity.

The internet holds value as a collection of information, as entertainment, and as money. It holds value as a tool to connect people and to help them educate themselves. In 2018, businesses directly involved with the internet generated an estimated $966 billion. With much of the web free to use however, how are people expected to transform this value into actual money?

In the beginning, without a secure way to transfer money over the internet, people sought other forms of monetization. The first, and to this day, the most dominant way to extract value from users is through advertisements. Ads are a common way to offer content for free while still getting paid for the value created.

In the traditional online advertising model, a website or application generates value through their content, users visit the site, and advertisers pay the website for their users’ attention. In essence, the website is selling the user to the advertiser.

Because of this, advertisements can be exploitative and annoying. Websites collect user data to offer advertisers a model of who users are and what they might want. This practice becomes predatory when users are unaware of what information they are giving up and exactly how it is used.

While ads do enable value extraction without requiring users to pay, this form of monetization doesn’t work well with media platforms like youtube and instagram. In this case, users themselves are creating value (in the form of photos, videos, and personal data) while only receiving a fraction of the money generated from ads. This leaves creators underpaid and without control over how their content is valued.

Direct monetization in the form of subscriptions and paywalls is becoming an increasingly popular method of value extraction. Direct monetization enables creators to engage with their audience in more intimate ways.

Imagine a platform where content creators can offer a premium experience to their biggest fans. Exclusive messaging privileges, access to content, and increased status are a few of the incentives offered to fans who are willing to pay. Creators earn more money and fans benefit from a more intimate and privileged experience.

Direct monetization works well in other areas of the web too. Netflix, the popular video streaming service is a great example of a subscription-based platform. They offer value (in the form of movies and tv shows) that people are willing to pay for. This allows them to make original content without influence from advertisers or production studios.

Overall, direct monetization in conjunction with web3 technology circumvents platforms’ influence as tax collectors and enables payments directly from consumer to creator. In an era where creators are producing value for the platforms that host them, it is increasingly important that they are compensated appropriately.

Implied value to explicit value

the transition from web 2.0 to web 3.0 will be characterized by the explicit valuation of almost all forms of data

In the near term, more online creators will move to platforms that allow them to monetize their content directly. Advertisements will continue to exist on the internet but they will be opt in and users will be paid for their attention.

Soon, we will begin to see the most obviously valuable things on the internet come with a price tag (ex: video paywalls, micro transactions for music streaming, platform subscriptions). Eventually services like search, social, and email will require some form of payment. Ultimately, the transition from web 2.0 to web 3.0 will be characterized by the explicit valuation of almost all forms of data.

With cryptocurrency, the value transfer will become effortless and automatic. Payments will be public and transparent. And the internet will become more fair, fun, and trustworthy for all.