Daniel A. Nagy: Decentralized Social Media Incentives | Swarm Orange Summit Madrid 2019

so hello everyone and unlike the previous speaker right now I'm going to talk about high-level incentives like why would people create and share creative and how creative content on swarm based social media platform so there's currently a project called bfree in development which is a separate project from swarm but we're working in close cooperation it is going to be a library of components from which you can create social media applications and in this presentation I'm going to explore how consumers and creators which sometimes overlap of creative content will be able to cooperate and I also would like to leave plenty of time for a Q&A so that this presentation is a bit more interactive so I would like to have a chronological overview of how how the incentivization of creative content has been done in the past is done in the present and how it might be done in the future and so the kind of solutions that we have today I put it in quotes because they are getting increasingly inadequate for the kind of technology that we're using so one of the primary tools of financing creative content currently is copyright it has one very important role that we would like to carry over to the kind of decentralized systems that we're building and that is attribution so copyright prevents or at least seeks to prevent plagiarism which is taking credit for other people's work and reaping the various benefits of being the original author and I believe that given the blockchain and given the kind of primitives that swarm has which are actually very similar to get for those of you who are doing software development so you can actually you will have a much more fine-grained and much more reliable way of attribute inverse of of you know intellectual creations to the original author because you have a immutable time stamping service in the in the blockchain itself and you have swarm which just like git will let you trace the various parts of of what you're sharing to whenever it was first uploaded and you know anchored into the blockchain but other than that there are a few restrictions of copyright with which I think we will have to do away with one is artificial scarcity so copyright is a monopoly on copying and given the fact that copying in the digital world is basically how information moves and we're making copies all the time imposing this artificial scarcity is increasingly difficult and it it in many ways it it does more harm than good so I think that the fact that creators of creative content also happened to be its largest consumers you need to you know to be exposed to a lot of creative content in order to be able to contribute in a meaningful and interesting way even if everybody pays their fair share there's a huge additional cost of enforcing this and given the arms race between enforcement of copyright and the kind of censorship resistant infrastructure that we're building and I think that the censorship resistance and the free dissemination is clearly winning that arms race I think that this this cost of of enforcement that society pays as a whole is is no longer justified and another very interesting consequence of not having copyright or not relying on copyright in financing creative content is a renewed cross-pollination between various creations so and here I would like to make a little cultural detour so in this talk I won't be able to answer all questions of you know how we're going to incentivize this particular type of creative content moreover I think that it's entirely possible that the answer is that we cannot and that is not necessarily a problem because for example since it's not possible to enslave tens of thousands of people humanity no longer builds pyramids and you know it's a valid answer like how are we gonna build pyramids without enslaving tons of thousands of people and it might well be the case that we don't build pyramids anymore even though pyramids are you know magnificent monuments to human ingenuity and creativity it just doesn't happen anymore and you know it might entirely be possible that making high budget feature films with the Stars earning millions of dollars will not be will not happen I don't know I'm not claiming that it will not happen but it's possible that it will not happen but I think that culture is financed and what kind of creative content gets created are very intimately interlinked and there are consequences in how culture develops from how culture is funded and for example what copyright did it basically killed off folk art because folk art evolves by you know imitating what other people do and you know adding your little bits and pieces but if you look at for example folk music or folk songs it kind of stopped in the first half of the 20th century because when the recording industry became dominant copyright simply didn't leave a space for that kind of creative process so I think that the kind of things that we're going to see are not what we have seen so far they will to some extent change so that's that's one way of how things have been done in the past and to a large extent are being done in the present and the other is advertising funding creative content through advertising and product placement which also has very well-known drawbacks namely first of all that is very often spam which is simply interfering with enjoyment when you're watching YouTube videos and they get interrupted by advertising it's it's really annoying and it's in many ways not only to the consumer but also to the Creator it kind of interferes with the with the intent of of the creation and also sometimes the interests of the creators and the advertisers are not aligned and therefore certain types of content cannot be adequately funded by advertisement or vice versa the needs of advertisers drive culture in ways in which it is probably not in the interest of either creator or consumers but the way we're building be free we definitely don't want to preclude monetizing creation by advertising so I'm not saying that this is bad or evil or anything I'm just saying that it has been up to up to now basically a the only way of freely sharing content without really relying on copyright royalties and in this presentation I will present many other ways of funding creating content which will relegate advertising to a particular niche where it makes most sense so and we will actually give the tools to those creators who want to fund their creations through advertising to do that so there's a number of transitional models which exist both in centralized and decentralized implementations and I would like to quickly go through them as well so there's a Spotify model Spotify still uses copyright but does not actually critically depend on it if you release music under some creative content Creative Commons license where you let other people scope it really you could still earn money on Spotify so the Spotify funding model even though it still uses copyright is not critically dependent on it which is a huge step forward however there are some concerns about its fairness and both can some consumers and some producers are unhappy with how Spotify works and it is not that Spotify as a company is poorly run it's the very model that consumers subscribe to the whole service and then this revenue is proportionally distributed um the creators in proportion to you know how much of it is consumed and it is particularly unfair to some niche subcultures so for example if you think of a black metal band which performs in some language other than English it might have its loyal following which could be perfectly adequate to fund what they do but on Spotify most of what they pay will go to just the most popular artists and there will be a misalignment between how much these people pay and how much the content which they can the creators of the content that they consume get paid for it so that's kind of the weak spot of the Spotify model but again this is a funding model that we would definitely like to enable because as I said it does not critically depend on the artificial scarcity created by copyright and given the smart contract infrastructure of etherium it is actually doable in a decentralized fashion another interesting model is Yandex music unfortunately outside of the former Soviet Union you cannot access that website unless you have a VPN but the way it works is that it's a music streaming service where you can put some constraints on what kind of music you want to listen to and it just dreams you music for free and you can and and it is music you know where the copyright holders are the usual publishers like Universal and and those other ones so how do they do it why do they allow why do they allow it so the reason they allow it is because it's analytics driven so the payment the way Yandex music pays for just broadcasting this music as a streaming service is by providing analytics to the publishers and whenever they want to try out something new so there's a new artist that they want to test how popular it will be or they are for example preparing a album release they record one or two songs for the album they release it on the index music and then they will get a glimpse of how popular it is how well it does with the audience they got lots of analytics down to like personalized personalized preferences like what kind of demographics listens to it and so on and by this from this data they can make decisions as to whether to fund it or not or in which markets to release it and so on and so forth so it's critically depends on there being some other distributions channels for which the analytics collected at Yandex music helps so it's not something that would stand alone but again this is a interesting model which in many ways is very liberating in that there are no Edward there's no advertisement and no no restrictions no artificial scarcity so we would like to enable that but there's a huge challenge how to do analytics in a decentralized setting and we have some ideas but it's very much a open research topic so those of you who are from the academia I really encourage you to study the possibilities of doing analytics in a server less peer-to-peer infrastructure because I think it might be might be a huge enabler for all sorts of business models and finally the third of these transitional models that work in a decentralized setting is actually a decentralized example stream it for those of you who are not familiar with it it's very similar to Spotify except that it uses a blockchain it uses its own token and the consumers of the content can vote buy these tokens to the kind of content that they approve of and the content creators can earn in proportion to how much of these approvals they get from the audience and also steam it does an additional service which is ranking so when you're looking as a consumer you're looking for some type of content than from these these votes by the consumers of the creative content steam it will be able to aggregate some kind of a relevant score according to which you can benefit and it immediately points to the weak point of this model which is that it negatively discriminates against let's call them minority cultures which typically Fork steam it I don't know if the spanish-speaking world has its own steam it but I would not surprised if it has but I know for sure that there's goalless which is the Russian language steam it it's a straight for coughs timid there's no innovation in addition to what steam it does and the reason they for it is because it being a much smaller culture than the English speaking culture you know their content will always be downgraded and down ranked by the algorithms of steam it and there they would never be in the top and it would be difficult to find so they had to work it but this actually points to to the way forward because on swarm for King is really easy there so as Aaron explained in the morning working a whole application and changing something including your user so the for King includes the user based the data everything is very cheap on swarm so this thing that was a painful and difficult decision to fork steam it for the russian-speaking audience in this case it would be the natural thing to do on a swarm based social media platform so if you want to apply the business model for a particular community or a subculture you just do it if work it and you hope that your fork will become a focal point for that particular for that particular content so these are the business models that I view as transitional and then we have some emerging alternatives which are which do not depend on on on the artificial scarcity at all and don't even use it one is pre-funding or crowdfund crowdfunding in advance there you don't you don't need artificial scarcity and you don't don't use it because it actually stands in the way so the simplest is the typical crowdfunding model which was pioneered by services like Kickstarter or GoFundMe that you you put a financing target you say that I want to do this here's the amount of money I need here's the deadline by which you guys need to collect that amount of money and if you collect that amount of money then I will do it if you don't then everybody get their contributions back and this is very easy to do on the blockchain in a decentralized fashion so you don't actually need intermediaries like Kickstarter it is very reliant on reputation so you need to have a track record in order to successfully conduct such campaigns and the bigger the contribution the bigger the amount of funds that you need to collect is the more risky it gets both for creators and consumers consumers risk of course that even though they collect the money the end result will be a huge disappointment whereas the creator is risking the fact that if they you know if they miss misjudge the amount of funds that they need they will not be able to to deliver so the the risks grow and the typical consequence of this is a shift first of all to smaller forms of of creation and the second is to break up bigger works into smaller pieces which are crowd funded independently so for example novels are published and crowd funded typically by chapters you don't you don't you don't do a whole now you don't crowd from the whole novel you do it chapter by chapter and another thing that I've never seen implemented so far but it's very interesting is the so-called rational street performer protocol or RSVP so for now it's only a bunch of research papers I don't think that workable implementations exist but it kind of takes this quantitative aspect that how how how many chapters people want or how many a sequence people want to a movie or how many episodes they want in a TV series it kind of let's let's let's the producers and the consumers too to negotiate this this kind of quantitative aspects in a crowdfunding fashion so it's a very interesting thing that I definitely suggest everybody to look into and the other one is basing funding on rankings so the analogy is the you know the phoning or the SMS type voting so followers of particular creators are willing to pay for their their favorite creator to be higher in some ranking that we had that is validated that has been already established that people are willing to you know to push their favorite artists higher in the charts and that can be used to actually fund the creation of con and it also saw solves the problem of improving search relevance so this kind of refers back to the previous slide that you can use approvals by the paid approvals by the audience to improve search quality for that particular content and this is my last slide so there are some directions that have not been explored at all and which I kind of expect to emerge and which radically differs from what we have now so collaborative creation so it will be just like in free software I would expect some large works large creative works to emerge as a collaboration of various people with clear divisions of labor you know some people write the music other people will do the animations and so on and we might even see things like component libraries of creative work where people can draw upon other people's creative work because they are good at let's say drawing animations but they don't want to write the music because they're not musicians but there's a library of ready music and there can be libraries of you know scripts from which they can shoot movies we will also see Forks of of creative work I think that will be actually very common that's my expectation you know if you feel strongly about one shot first you can just work Star Wars and create a version which has both the digital digital goodies and Han shot first of course copyright will prevent that in this particular instance but you get the example and you can kind of bounty the creation of missing parts so if there's some missing part of a piece of creative content you can post bounties for it and see it done by the community so basically those are the things that I wanted to go about so thank you so much for listening and I'm open for the Q&A session [Applause] is there any question I appreciate your presentation and am i right when you said that in swarm is cheap to fork the application with users is it true yes and what is the purpose of for working all the systems all system with users and users are know it that when the rules will change well the rules don't change they are using some application they can continue using it there's no nothing nothing changes there's nothing that they will they have not been allowed to they were allowed to do up till now and from now they're not so it's it's never a you know it's never a tightening of the restrictions but what you can do is you can look at a you can look at a tap and it up it doesn't even have to be a social media DAP you can clone it together with it with its user user database and you can say that here's this new app which you can if you had at if you had a login into that app you automatically have login into this app so you forged a DAP together with its user user database and it's cheap like you don't have to actually copy information you just need to put in a few references here and there so the application was changed well the old application is still there it's a fork it's not a change it's a different application so in that case we have two applications of therefore yes yes okay I will ask you personally thank you any other question I found some attempts at collaboration online like writing novels shooting movies something together and I wonder why they have failed well I think that the reason they have failed so far is because of coordination problems so it's very difficult to commit to something right now online without you know using the blockchain and using the blockchain is difficult because there are no no user-friendly interfaces to do smart contracts so this is one of the things that be free is going to address that it will present a interface which is usable by people who are not interested in the actual inner workings of it and it will give metaphors that are understandable by people who are into you know creating creative content rather than dealing with computers and distributed systems and I think that it's the it's the fact that there will no standard no no well-designed and no standard ways of coordinating people that if they try to spontaneously coordinate then very often they face difficulties because you know some of them will not do what they committed to do and so on so it's it's the lack of aligned incentives and and coordination that I think made some of the early attempts fail there's a question could there be another way to replace convert if you could prove in a way that the work that you're listening to that you reproducing belongs to certain person without having a an intermediary we have now organizations that that collect fees for that could be could that model be sufficient could we actually need another thing and another model to replace a copyright model well I'm not sure that I understood the question but so let me try to answer nevertheless so attribution on the blockchain is really easy and you can even do it in a fine-grained way so if you look at how swarm works if you take a you know a picture from some other collection and put it into your own collection then you can have something very similar to get blame where you can see that which part comes from where so actually it's very fine-grained and since you have time stamps and immutable records on the blockchain and Swarm uses the blockchain as the final anchor for like the ENS the etherium name system as the final anchor through which you find particular versions of the contract and it has built-in versioning attribution becomes like it comes naturally it's it's like in the fabric of swarm so if you if you want attribution if you don't want to deliberately anonymize what you're doing you will have it and whether business models will emerge that make good use of it I don't know but I certainly hope so and I'm going to do my best to help bring about these business models