Matters Lab Salon Recap @ 706 LA | Shapes of Content Media in Web3 Movement
@Livid - Founder of Planet
Joshua - Founder of @rss3
@張潔平 - Founder & CEO of Matters Lab, Journalist
@刘果 | Guo Liu - Co-Founder & CTO of Matters Lab
What exactly is Web3?
More and more Twitter users have added an “.eth” extension to their usernames. The most famous one is vitalik.eth, who is the founder of Ethereum and the spiritual leader of the community. When I was first introduced to Web3, I was wondering if it seems like a traditional domain name, does it work like one? The answer is not exactly. But if we use Brave browser or add “.limo” domain extension to it, the Website can be visited.
And here comes the new concept, the content-based addressing of Web3. In the traditional Web2 Websites, the content of a given domain depends on what the server provides. Both domain and server are fundamentally owned by the database of a company, and the ownership of your content belongs to the company. But in Web3, we go directly to the content itself, which is quite similar to ISBN, the unique identifier of books. This time, neither the domain name nor the address is the property of a single company, rather, it is written on the blockchain infrastructure.
RSS (Really Simple Syndication) helps users keep pace with information, and RSS3 aims to support decentralized information distribution and help users to track information in a readable manner.
In the paradigm shift from Web1 to Web3, many things, such as the landscape of data, are going through drastic and complicated changes. Unlike Web1, our data in Web3 is owned by ourselves instead of big companies. But what remains unchanged is that developers are still in charge of information processing. For example, if you write an article on Mirror, your information and data are still stored in Mirror instead of the output end. It ultimately is yours, though. It is still not fully-developed or whole-packaged decentralization.
What is critical for Web3 is that everything can be tracked. In Web1 world, contents are created to be consumed. However, taking Bitcoins transactions for example, Web3 contents are not necessarily intended for consumption, but would nevertheless be recorded. So, we are expanding our understanding of “content” in decentralized networks as we see an upward spiral of different forms of content creation. For users, a revolution of intellectual property rights is happening. Meanwhile, it is a collectivist revolution for engineers and developers. Data is no longer owned by the creation platform, but shared by everyone.
So, we hit some bottlenecks in the process of translating Web3 information into human-readable form for the reason that data can be too scattered and cumbersome, or there is too much structured data. We need to present Web3 contents to users in a readable form. To address this problem, we had yellow pages, and then search engines, and then social media, and now recommendation algorithms in Web1 and Web2. We don’t know if Web3 will go down the same path but we know that basic information distribution form is on the horizon, be it search engine or newsfeed.
Web2 went through four stages of information distribution. From Web portals, to search engines such as Google, to social networks, and finally to recommendation algorithms such as Tik Tok. It gets more and more efficient for users. But another perspective to look at the problem is to explore the economic model behind different stages. All four stages rely on advertisement, taking content as fuel and cramming it into an attention-based machine.
In concurrence with the economic model is DBS, forum, or group, where basic logic is that everyone can post something on it, and what we read is based on certain community rules. BBS of universities, Douban Group, and Matters as well, to a certain extent, belongs to this category. Most media of this type is entirely non-profit.
Another type of information distribution is professional news agencies, like The Wall Street Journal, New York Times, and Initium Media. Once you subscribe, you can have quality newsfeed. What is unique about this type is that individuals are selecting and filtering information for you, which normally provides the best quality, and is thus excluded from internet’s development centering effectiveness.
Now we come to Web3. Web3 allows people to own their own data and digital assets, and its power of decentralization entails a new definition of property. It can be fungible like money, or non-fungible like NFT. Under this premise, what are the new possibilities and forms of discovering content? We know that business value is determined by how you capture and sustain users’ attention. Given that we have a new definition of intellectual property and consequently a new way of organizing people, how to create something new? It is both an opportunity and a challenge.
When we founded Matters in 2018, we had a vague idea. And as we explore the world of Web3, the vision becomes clear and we are coming up with solutions to meet up with the challenges. For example, when The Voice of April was censored on Wechat, Shanghai residents turned to NFT and it became an entity on the internet. Now, we are trying to figure out how to make content entities.
Also, in the process of content creation, a new role of curator emerges. Instead of relying on algorithms or human curation, the newsfeed of Matters is decided by users. And to voice one’s support to writers, you can choose to like, donate, or subscribe. We found that this mechanism encourages users to be more generous in donation because they are given ways to actively advertise for the creators they support. It is a win-win situation. Creators get paid, and readers get to find quality contents in a more efficient manner.
We started Matters.News, our first entry in 2018, with the worry of how content creators could survive? I didn’t expect that people were shocked creators are having trouble surviving. Theoretically speaking, people would say, if one is talented and a master of marketing, one can make loads of money. Another question raised to me frequently is whether this type of creators, namely those who are serious, important, intellectual, and public-oriented, couldn’t survive is really a problem. Historically speaking, they either spend their spare time writing, or are patronized by the wealth. So is there really a problem?
Indeed in democratic states, the quality media people count on that provides stable information output is either sponsored by the government or by large-scale foundations. It is the same case with artists, not to mention musicians who were once patronized by the royals. Market mechanism is never the answer to it.
However, from my own experience as a journalist and editor in media, it is structural injustice that helps reproduce the plight of creators. And decentralization and Web3, which I intuitively regard as an intellectual property rights revolution, could bring about fundamental changes.
The structural injustice can be simply put in two aspects, the mechanism of the internet and the system of China.
The Internet system is the attention economy that we have become so accustomed to over the past two to three decades. Attention has been centrally distributed by a large-scale winner-takes-all algorithm, leading to a severe disparity between the rich and the poor in the world of the attention economy. Addressing structural injustice of the Internet is attractive to investors. They know that long-term structural injustice means inefficiency and less profits since it reduces the incentive to create. If this could be changed, it would release a lot of creative energy and bring greater economic benefits. Web3 offers an opportunity for another recommendation algorithm that is community-based and more human, but equally efficient.
Secondly, creators in China are not on the same page with other countries’ since the support networks basically do not exist. On the one hand, Taxpayers' money will never be allocated to the creating sector as there is no democratic system. On the other hand, there are no major foundations or “the third sector” that is willing to support the creative soil on a long-term basis. Non-profit organizations are interested in solving this problem, but they are skeptical about Web3 and decentralization. I would argue that the only path is decentralization. Because China’s status quo would presumably remain, and it has already extended to Hong Kong, and possibly influence Taiwan in the future. But to make it work takes effort, and we have to find its resilience as soon as possible.
If Web2 and Web3 are both about winning people’s attention, what are the fundamental differences?
Most algorithms are based on what you have read. If you have seen anything you like, it keeps popping up. The reason why Matters takes a different road and chooses “donation” as its core mechanism of curation is that it carries more weight than simply reading. It is real money. It may not be much by the standard of cryptocurrency. But it is real money.
So it is interesting to look at the data. For example, serious articles normally receive more donations but comparatively little reading time. People pay respect but don’t necessarily finish reading it. In contrast, another type of articles accumulates more reading time but receives little donation. They are normally eye-catching, juicy or sexy. So, the measurement of attention can be so subtly differentiated in the process of production design. And different measurements correspond to different values and results.
It is true economic value comes down to attention, but attention can be distributed in different ways. The most common way is directing attention to advertisement, and another is directly to the work itself. From the perspective of the creator ecosystem, the latter benefits both parties; creators could find more loyal fans who are willing to pay, and readers could be exposed to more interesting contents. In conclusion, Web3 is able to move us away from an advertisement-centered economy, and progress towards direct payment.
From the perspective of information distribution, the difference is that Web3 allows us to know how the algorithm works while Web2 doesn’t. In another word, Users get to control the switch.
From the point of view on business model, is advertisement still an option?
The difference between the two is how you use advertisements and algorithms. Duckduckgo, for example, profits from advertisement but it is not about traffic. When decentralization is fully developed, new mode of advertisement and algorithms would emerge.
While not as efficient as Web2 in information processing, Web3 excels at processing assets. So the better the content is, the more likely it will embrace Web3.
Many teams are experimenting with advertising in Web3. The approach is different from Web2 though. Since we are able to capitalize content in Web3, we can directly bid for advertising space without knowing the traffic and CPR (cost per rating point) as we do in Web2. I believe we would eventually reach market balance.
From Web2 to Web3, how to make sure user experience gets better?
Actually, in the earliest stage of an emerging technology, those who appear to have a better development are those that conceal the changes from users. However, those who have survived the early stages are always the ones that allow users to distinctly sense the changes.
Another perspective is that on any platform in China, your account is always in danger of being entirely banned due to censorship. But if your articles or videos are on blockchain, we are certain that nobody has the power to delete it. So it may not be a matter of a better user experience, but a safer one.
Also, we don’t need to memorize passwords in Web2 now, but it is critical to secure your private key in Web3. So it becomes important to provide better service of protecting private key. Maybe using our fingerprint or facial recognition to log in our wallet? If that’s the case, we can really forget about our password one day.
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