Delve into decentralized media: Blockchain technology and the past, present, and future of the Fourth Industry

Delve into Decentralized Media: Blockchain Technology and the Past, Present, and Future of the Fourth Industry

原文来源： 深潮 TechFlow

introduce

Bitcoin's primary original function was as a financial instrument, but its connection to the media industry was obvious from the start. The initial block, or origin block, of the Bitcoin blockchain not only records transaction details, but also includes a piece of news from The Times.

After more than a decade of development, blockchain technology and cryptocurrencies have caused innovation in multiple fields and gained widespread attention, not only in the financial industry, but also in the media industry.

Due to its decentralized and transparent nature, blockchain technology has the potential to change the landscape of the media industry by enabling new business models, increasing transparency and trust, and creating new revenue streams for content creators.

However, despite such significant potential, the widespread adoption of blockchain technology and cryptocurrencies in the media industry still faces several challenges.

Recent surveys show that only a small percentage of Americans view cryptocurrencies positively, with many concerned about volatility in their prices, security and regulatory issues. In addition, prominent figures in the business and financial circles, such as Charlie Munger, have called for a ban on the use of cryptocurrencies, further fueling the perception of uncertainty and risk in this emerging technology.

That being said, the intersection of fourth industry and Web3 continues to innovate.

The purpose of this paper is to explore the history of the application of blockchain technology and cryptocurrencies in the media industry, and examine the challenges and opportunities of Web3 disrupting the fourth industry, with a view to ushering in a new era of decentralized media.

Part 1: A Brief History of Encrypted Media  

1. Crypto-centric News Media (2009-2015)

The emergence of any innovation creates a need for relevant knowledge and information. Due to the inability or unwillingness of the mainstream media to cover details about the development of cryptocurrencies and blockchain technology, several dedicated cryptocurrency media outlets emerged shortly after Bitcoin's creation. The most notable are Bitcoin Magazine (co-founded by Vitalik Buterin in 2012), Cointelegraph, and Coindesk (both founded in 2013), which remain important pillars of the cryptocurrency media to this day.

While critics will argue that the cryptocurrency media sometimes drives fraud and bubbles around cryptocurrencies, cryptocurrency media outlets play a crucial role in three ways:

1) Educate and promote the adoption of blockchain technology in the early stage;

2) Train and develop journalists with knowledge of the blockchain sector to fill traditional media positions as they expand their cryptocurrency reporting teams at a later date;

3) Alert fraud and potential systemic risk.

For example, a CoinDesk report revealing Alameda's reserves revealed the "largest ever" cryptocurrency fraud and contributed to the FTX crash.

In addition to news media, providers of on-chain data analysis and market intelligence also began to emerge during this period, most notably CoinMarketCap and Chainalysis, which were founded in 2013 and 2014, respectively. The existence of these information providers has increased market transparency to some extent and helped journalists investigate news stories.

At this stage, innovation and application of blockchain in the media industry is very limited. This is mainly due to the fact that blockchain technology was first made widely known through the creation of Bitcoin, which was primarily designed as a decentralized digital currency system.

Bitcoin's original white paper, published by anonymous creator Satoshi Nakamoto in 2008, did describe a system in which the blockchain could be used to time stamp documents and data, but the Bitcoin network was primarily for payments, with Nakamoto setting the maximum block size at 1 Megabyte (MB) in 2010, To prevent blockchains from becoming too large to be managed by a single node on the network. (As of 2023, this limit has effectively been raised to about 4MB per block.) So while miners can add some extranent data/messages to the transaction details of a block, as Satoshi Nakamoto did with Bitcoin's first block, applications beyond making payments on the Bitcoin network are almost not feasible.

In addition, the Bitcoin network has only a few apis (application programming interfaces) available for developers to interact with the network, further limiting the applications that can be built on top of Bitcoin. It wasn't until a few years later, when Ethereum launched in 2015, that the full potential of blockchain for data storage and management began to be explored.

2. Smart Contracts and Decentralized Content Management (2015-2020)

In 2015, Vitalik Buterin founded Ethereum, an important milestone in the development of blockchain technology. With Ethereum, Buterin has introduced a new blockchain architecture that allows for the creation of decentralized applications (dApps) that go beyond the scope of digital currencies. The Ethereum blockchain is equipped with a programming language called Solidity that enables developers to create smart contracts - self-executing digital agreements that automatically enforce the terms of the agreement.

The innovation of smart contracts on the Ethereum blockchain has inspired many innovations in the media industry. One of the most important applications of blockchain technology in the media industry is content management and distribution. With smart contracts, content creators can protect their intellectual property by assigning licenses and setting the terms and conditions of use for the content. Smart contracts also enable content creators to receive payment for their work directly from their consumers, without the involvement of intermediaries such as publishers or distributors. This creates new opportunities for content creators to monetize their work and generate revenue accordingly.

Steemit, for example, launched in 2016, is a blog and social media platform that utilizes blockchain technology. The platform is built on the Steem blockchain, allowing users to earn cryptocurrency STEEM tokens by creating and moderating content. Users' rewards are evaluated based on the popularity and quality of their content, as well as votes and comments from the Steemit community.

While Steemit attempts to develop a blockchain - and token-based version of Twitter, a number of other projects have sprung up to create similar decentralized video sharing platforms to disrupt the traditional video sharing giants.

Like YouTube, some notable examples include StreamSpace (founded in 2017), Flixxo (founded in 2016), Viuly (founded in 2017), and Viewly (founded in 2017, but no longer active).

Moreover, the application of blockchain technology in the media industry is not limited to content creation and distribution. It has also driven the development of new business models, such as decentralized advertising networks that encourage engagement by rewarding users for their attention and data.

For example, Basic Attention Token (BAT), launched in 2016, is a blockchain-based advertising platform that aims to disrupt the traditional digital advertising industry by offering a more privacy-focused and user-centric model. The platform enables advertisers to market directly to users and reward their attention by using BAT tokens.

In addition, blockchain technology is being used to solve problems related to false news and misinformation.

One such example is a platform called Civil, which launched in 2018 and uses blockchain technology to create a decentralized newsroom that allows journalists to publish and monetize their work directly, while providing transparency and accountability through its community-driven verification process.

At this stage, many blockchain and cryptocurrency projects are being generated through initial coin offerings (ICOs) rather than traditional venture capital funding. While this enabled the projects to quickly raise money and attract attention during the market hype, it also made the projects economically vulnerable when the cryptocurrency market crashed in 2018. It is worth noting that while many of these projects are marketed as "decentralized," some of them still rely on centralized servers, using token economics purely as an incentive. This lack of true decentralization has drawn criticism from many in the industry.

During the cryptocurrency hype from 2017 to 2018, other innovative ideas emerged in the market aimed at applying blockchain technology more broadly to various industries, including media and entertainment. One of the most prominent innovations is the non-homogeneous Token (NFT). The unique characteristics of NFT, such as verifiable authenticity, unique ownership, and the potential for new revenue streams, make them ideal tools for creators and collectors.

While NFTS were introduced as early as 2017, with projects such as CryptoKitties and CryptoPunks, it wasn't until 2021 that they gained widespread attention and sparked a wave of innovation in the media industry and beyond.

3. NFT, DAO and Decentralized Social Media (post-2021)

Ever since its introduction, blockchain had been a niche topic in traditional media until something dramatic happened in 2021. Prominent media companies around the world have participated in the so-called NFT craze, selling various forms of content, from text to video, as NFT on blockchain. The adoption of NFT by these high-profile media companies represents an important shift in the industry and demonstrates the growing interest and potential of blockchain technology.

The involvement of traditional media in NFTS has also brought some controversy, with some critics, including Bill Gates, claiming that cryptocurrencies and NFTS are based solely on "the greater fool theory." However, the adoption of NFT has generated new revenue for traditional media companies, such as Time magazine, which made over $10 million in profit in just 14 months with its flagship TimePieces NFT collection. And those profits continue to grow in the secondary market.

Not only does NFT offer content creators a new way to make money, it also offers unique opportunities to interact with fans. As a result, more and more decentralized platforms are emerging to take better advantage of this new technology, with Mirror.xyz being one of the most prominent examples. Founded in 2020, Mirror.xyz, often referred to as an encrypted version of Medium, is a decentralized publishing platform that allows anyone to create, share and sell their unique digital content as an NFT. It allows creators to have more control over their content and monetize it in novel ways.

With the growing popularity of NFT, we are also seeing the rise of media-related DAOs (decentralized autonomous organizations). These DAOs harness the power of blockchain technology to create decentralized ecosystems for media companies and their communities, with an emphasis on transparency, community participation, and shared ownership. By embracing DAOs, media companies can offer their audiences a new way to engage while building more sustainable business models that benefit all stakeholders.

Mad Realities, for example, is a Dao-style startup backed by Paradigm and several celebrities, including Paris Hilton. The company is a decentralized studio that produces reality shows and is funded by NFT sales. The owners of these NFTS have various governance powers and can participate in decision-making processes traditionally reserved for industry insiders. This innovative application of blockchain technology and NFT represents a major change in the media industry, as more companies seek to embrace a decentralized ecosystem and provide more direct engagement opportunities to their audiences.

In addition to Mad Realities, several other media-related DAOs have emerged, These include Friends with Benefits (FWB) in 2020, Bankless DAO in 2021, Pub DAO and Headline DAO in 2023. FWB is a token-based membership system where members can directly support and benefit from the success of their favorite creators. Bankless DAO is a community-driven, decentralized media organization where members contribute their skills and expertise, create educational content about blockchain and cryptocurrencies, and participate in decision-making and organizational governance. Pub DAO, on the other hand, is a decentralized media platform with an eye toward supporting independent journalists and content creators. The platform uses blockchain technology to make micropayments for articles and content, enabling creators to be paid directly for their work without relying on advertising revenue or intermediaries. Headline DAO, on the other hand, is a decentralized journalism "experiment" using NFT sales to fund independent journalism. NFT holders will be able to vote on which journalists they want to fund.

In addition to the rise of the NFT and DAO, 2021 will also see an increase in demand for decentralized social media/platforms. When Donald Trump was banned from major social media platforms, it sparked a heated debate over free speech and content management. There is also a growing awareness of data privacy and ownership issues, as well as the growing control of content by giant tech companies. This has led to a surge of interest in decentralized alternatives, where users have greater control over their data and content. That demand continued to grow after Elon Musk bought Twitter in 2022.

Decentralized social media offers an alternative to traditional social media platforms by utilizing blockchain technology to create decentralized networks that are not controlled by any single entity. Unlike many of the projects that claimed to be "decentralized social media" during the cryptocurrency frenzy of 2017/2018, the new project focuses on using alliance networks to build truly decentralized networks. The affiliate network uses a protocol called ActivityPub, which allows users to communicate and share content with other users on the same network, regardless of the specific platform they are using.

In a federated network, users can communicate and share content with other users on the same network, even if they are using different servers or nodes. This is done through a protocol called ActivityPub, which is used by many federated social networks to allow users to connect to other users, regardless of the specific platform they are using.

Protocols such as Lens, Nostr, and Farcaster all aim to provide such tools to help build decentralized social media applications. Mastodon and Damus are two notable examples of applications that go directly to the average user and leverage the Federation network and ActivityPub protocol to provide an alternative to traditional social media platforms. These decentralized social media platforms offer users greater transparency, privacy, and user autonomy. Users can communicate and collaborate with others in a decentralized manner while controlling their own data and content.

Part Two: Challenges facing decentralized media

The rise of NFTS, DAOs, and decentralized social media platforms demonstrates the potential of blockchain technology to reshape the media landscape, providing new ways for creators and communities to monetize and distribute content, and promoting a more democratic and transparent media ecosystem. However, these innovations still face significant challenges:

1. User adoption and scalability

The media industry operates in an attention economy, and its success depends on capturing the attention of a broad audience. However, while global Internet penetration has reached 64.4%, according to the World Bank, the global cryptocurrency adoption rate is only about 4.2% as of 2023, the same level as Internet adoption in the late 1990s.

It wasn't until 2020 that digital media adoption surpassed traditional media in the United States for the first time, thanks to COVID-19. As a result, a killer Web3 app in the media industry is a long way off, especially considering that only 8% of Americans view cryptocurrencies positively.

Public education through mass media is an effective way to promote the adoption of new technologies, but as traditional media brands embrace the concepts of blockchain and Web3, they face a difficult choice. While they welcome innovation, they also want to distance themselves from any risk that might involve cryptocurrency scams or bubbles in order to maintain public trust. This goes a long way to explaining why most established media brands choose to donate their "experimental" NFT sales to various foundations in 2021.

Decentralized social media platforms are still in their early stages, and it remains to be seen whether they can achieve widespread adoption and compete with mainstream centralized platforms. A major factor affecting its growth is the overall infrastructure development of blockchain networks, as decentralized social media platforms rely on the speed and scalability of blockchain technology. Until these challenges are addressed, it may be difficult for decentralized social media to gain enough attention and adoption rates to compete with traditional social media platforms.

2. Infrastructure limitations

Infrastructure takes time to build. Building blockchains is no longer a major hurdle for innovators, but new blockchains may struggle to gain traction and survive without active applications built on top of them. As a result, most innovators choose to build on existing active blockchains, such as Ethereum, despite its scalability issues. During periods of high congestion, Ethereum congestion can significantly reduce the user experience of network transactions and DApp interactions. During periods of high congestion, transaction fees can soar, making it expensive or impractical for some users to participate in the network. In extreme cases, network congestion may even lead to temporary shutdowns or other disruptions.

Because of these infrastructure constraints, most decentralized apps struggle to match their centralized competitors in terms of user experience, making it difficult for them to compete. Take Damus, the decentralised social network that has been backed by Twitter founder Jack Dorsey. Currently, users must upload images to a third-party server before Posting them to the app, and videos cannot yet be uploaded to the platform.

3. Volatility and inconsistency

The high volatility of crypto markets poses a major challenge to innovation in the media industry, with frequent boom and bust cycles making it difficult for companies to manage their employees and maintain financial stability. The challenges facing crypto media have intensified during market declines, when maintaining a business becomes more difficult.

In addition, decentralized social media startups often struggle to stay motivated during market downturns, because those who joined the buzz during the boom but didn't really believe in a decentralized future quickly left the market. This market volatility is also a major obstacle to the financial health and sustainability of start-ups and, unfortunately, has led to the closure or sale of several promising projects.

Civil, for example, closed in 2020, and Po.et, a blockchain-based platform founded in 2016 to manage the rights and ownership of digital content, also closed the same year. Steemit was sold in 2020, while TrusStory, a blockchain-based platform for fact-checking and verifying online content, closed in 2020 due to financial difficulties, despite initial investment from prominent members of the blockchain community.

4. Patchwork solutions and the creation of new problems

Decentralized applications (dApps) are a promising solution to many problems, but they also present new challenges and risks that must be carefully considered.

For example, decentralized social media platforms offer a way to address the shortcomings of centralized platforms in data privacy, censorship, and content management. By using blockchain technology, these platforms can empower users to control their data and content. However, they also introduce new challenges, such as the difficulty of removing illegal content and the potential for spreading misinformation and hate speech. For example, although Damus describes itself as a platform for "free speech", much of the existing content on the platform is low-quality advertising and pornography.

Moreover, in their efforts to create an anti-censorship network, decentralized social media platforms may inadvertently antagonize groups of users, as different groups migrate to different platforms that align with their views. This can lead to the creation of "echo chambers" where individuals are exposed only to views that support their existing beliefs, rather than engaging in productive dialogue and exchange of ideas. That's not good for healing a society that's already divided.

DAOs (decentralized autonomous organizations) offer alternative ways to produce and distribute media content, but may present drawbacks when it comes to serious news, a specific area that often requires expertise that the general public lacks. Decentralized decision-making can easily lead to the production of low-quality content and a lack of accountability. Another concern is that the potential to vote in DAOs is compromised by money buying, whereby individuals or groups with large amounts of money can use their resources to influence the outcome of the vote. This can be particularly problematic in DAOs where the amount of money held by members determines voting power.

Part Three: Opportunities for decentralized media

Despite the challenges of adopting blockchain technology in the media industry, there are still many opportunities for innovation and growth. These opportunities can be divided into three main areas:

1. Further adoption of NFT and Web3 in the media industry

In recent years, a number of news providers, including Reuters, Bloomberg, and CNBC, have expanded their cryptocurrency reporting teams and offered more educational content about blockchain and cryptocurrencies. Despite the criticism, more traditional media brands are adopting NFT as a monetization and user engagement tool, even amid a market downturn in the cryptocurrency space.

Web3 technology is also becoming more common in the media industry. The Times is reportedly doubling down on its Web3 strategy, while Forbes and NBCUniversal are looking for Web3 vice presidents based on public listings on LinkedIn.

And 2023 will already see more media companies adopt NFT. In February, GQ released its first NFT collectibles, while Fox Entertainment's The Masked Singer debuted a token-gated fan experience. According to CoinDesk, Fox is also planning to launch an NFt-based TV series, Krapoulus, from Rick and Morty creator Dan Harmon, this year.

Aside from mass media, games are another good channel for technology adoption. With the development of blockchain infrastructure, native On-chain games with built-in NFT and economics have attracted increasing public attention. GameFi's development has the potential to have a significant impact on mass adoption of blockchain in the media industry. With growing interest in blockchain and DeFi apps, GameFi offers a new way to engage audiences and drive adoption, especially among the younger generation, who are more likely to be gamers and tech-savvy.

2. Zero-knowledge proof and media

One of the most promising areas has been the development of the Zero-Knowledge Proofs, or ZKPs, or ZKs for short, which has attracted backing from a number of large venture capital firms, with several ZK start-ups each raising tens of millions of dollars in the past few months.

ZPK is a cryptographic technique that enables one party to prove to another that a statement is true without revealing any information other than the statement itself.

ZKP has particularly broad application potential in blockchain and cybersecurity.

In the blockchain space, for example, ZKP could be used to prove the validity of a transaction or the authenticity of a digital asset without revealing any sensitive information about the parties involved. This can increase the speed and efficiency of the blockchain network, while protecting users' privacy and security, and addressing the challenges posed by congestion in Ethereum and other blockchain networks. This will help the entire dApps ecosystem, including Web3 innovations in the media industry.

In addition to providing scalability and privacy protection, ZKP is directly applicable to the media industry, especially in the fight against disinformation. A research team at Stanford University has demonstrated the feasibility of ZKP in the media industry, specifically using blockchain-based ZK technology to verify the authenticity of digital images and videos. Research team members Trisha Datta and Dan Boneh published a blog post on Medium explaining how ZK proof can be used to combat disinformation. By harnessing the power of blockchain and ZK technology, it is possible to verify the authenticity of digital images and videos without revealing the underlying data, thus helping to prevent the spread of false information and other forms of manipulative media.

ZKP provides a powerful tool for validating data without disclosing the data itself, which can be used against disinformation. By using ZKP to verify the authenticity of digital media, media companies can create safer and more trusted platforms for users to consume and interact with content. In addition, ZKP can be used to protect user privacy and prevent the tracking and collection of personal data. By keeping user data private, media companies can create more secure and trusted platforms for users, thereby increasing user confidence and engagement.

In general, ZKP has significant potential in the media industry, especially in combating disinformation and protecting users' privacy. As ZKP technology and applications continue to evolve, it will be interesting to see how media companies adopt and leverage this technology to create more secure and trusted platforms.

3. Decentralized content curation system

With the rise of Web3 and the decentralization of the media landscape, the importance of building a decentralized content curation system has become increasingly obvious. While the major Web2 social media platforms already empower individuals to create content, a centralized curated system powered by a black box algorithm has limitations in terms of transparency and democratic access.

Building a decentralized content planning system requires addressing a variety of technical and governance challenges. One of the main technical challenges is ensuring scalability to accommodate large numbers of users and content while maintaining high levels of security and transparency standards. Governance challenges involving decision-making and accountability must also be addressed.

Despite these challenges, decentralized content curation systems have significant potential to influence the media industry, particularly in terms of content discovery and distribution. By providing more democratic and transparent systems for content curation, these systems can help promote a more pluralistic and fair media landscape, ensuring that all voices have a chance to be heard.

Most existing media-related DAOs naturally act as decentralized submastermind systems, and some new DAOs have been created specifically to address these issues, such as KurateDAO. KurateDAO was founded in 2023 to curate the world's information using "crypto economy games," demonstrating the potential for decentralized content planning systems to make an impact in the media industry. Expect more innovative ideas to emerge in this area in the coming years.

summarize

In short, blockchain technology offers great opportunities for the media industry in Web3. Decentralization, immutability, and security are some of the key advantages of blockchain technology that could address long-standing problems in the media industry, such as disinformation, lack of transparency, and censorship. However, full adoption is still a long way off, and the media industry will face various challenges along the way, including regulatory hurdles and technical difficulties.

The key to realizing the full potential of blockchain in the media industry is to focus on practical solutions that solve real problems and are financially sustainable. Only then can the media industry move towards a more decentralized and sustainable future, with trust and transparency at the forefront of the industry.

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