Blockchain for Creators

WEB3 IS BROKEN CAN NEAL STEPHENSON’S BLOCKCHAIN FOR CREATORS FIX IT?

Web3 is billed as the next iteration of the internet. Advocates say it will be decentralised, more open and led by blockchain technologies – in contrast with Web2 where data and content are centralised in a small group of powerful companies. makers explores the likely impact of Web3 on content creation.

Author Neal Stephenson coined the term ‘metaverse’ and now he wants to be chief architect of a new project to see it realised. While his depiction of the future internet in Snow Crash three decades ago was dystopian, Stephenson wants to rescue the nascent metaverse of today from the clutches of big tech and self-interested venture capital. His ambition is to secure what he and others believe can be a thriving and more equitable social and business environment for the creative community.

To do this, Stephenson is backing a new project, called Lamina1, that represents a blueprint for the third phase of the internet – known as Web3. There’s an unavoidable use of jargon in discussing this topic, which does make it more of a black hole than it needs be. To understand better, let’s just rewind a little.

Back to Basics: Web1 and Web2

Web1 refers to the internet of the 1990s and early 2000s — the internet of blogs, message boards, and early portals like AOL and CompuServe. Most of what people did on Web1 was passively read static web pages, and much of it was built using open protocols like HTTP and FTP.

Web2 from around 2005 was characterised by social media and user generated content. People began actively participating in the internet rather than

TODAY, STORYTELLERS, DEEP-THINKERS AND DESIGNERS PITCH AND HUSTLE IN SEARCH OF FUNDING – IN GAMES, MUSIC, FILM, AND FASHION – ONLY TO HAND OVER 30-70% OF THEIR REVENUE, OFT POST-RECOUPMENT, TO LENDERS AND MIDDLEMEN

passively reading it. Most of that activity ended up being distributed and monetised by big companies (Facebook, Google) which kept most money and control for themselves.

Web3, the story goes, will replace these centralised, corporate monoliths with decentralised, community-run networks (called DAOs), combining the open infrastructure of Web1 with the public participation of Web2. We are said to be in transition to Web3 now.

Crypto investor Li Jin sketched the vision this way: “If the pre-internet/Web1 era favoured publishers, and Web2 favoured the platforms, then Web3 is all about tilting the scales of power and ownership back toward creators and users.”

Financial analysts McKinsey agree: “Web3 potentially upends the existing power structure with a shift back to users.”

The basic technology

Web3 will be built using decentralised blockchains – the shared ledger systems used by cryptocurrencies like Bitcoin and Ethereum.

Online communities and businesses will be built with blockchain technology in a new kind of organisational structure called Decentralised Autonomous Organization (DAO).

In theory, DAOs can be more transparent than traditional organisations, because the group’s important decisions get made on-chain, using governance tokens, payment mechanisms (like NFTs) and votes that are supposedly take place in the community rather than behind closed doors. Rewards are tracked using smart contracts.

Crypto investor Chris Dixon argues that DAOs: “can help course correct the internet back to its original, idealistic vision: power and money pushed to the edges, networks growing and flourishing together, a level playing field for talent anywhere in the world, a thriving creative middle class, and a generally diverse and interesting place.”

The promise

As might be apparent, Web3 is not just a set of neutral technologies. It is also a philosophy bordering on political ideology with which various factions are wrestling for the future of digital society.

Idealists are almost utopian in their hope for Web3. Their starting point is that most people who make media on the internet today whether artist, musician, video game streamers or animator, put their work on platforms like Spotify, YouTube, Twitter, Facebook. Those platforms are great for building an audience, but they’re not great for making money.

Web3 will transform the internet as we know it, disintermediating traditional gatekeepers and ushering in a new, middleman-free digital economy.

Where the metaverse comes in

The metaverse will be built – again in theories proposed by Web3 evangelists – on Web3 and technologies to make all our interactions with the future internet open (not walled gardened), safe (in terms of data privacy and cyber-bullying) and outside the control of any monopoly. Web3 tools will code the metaverse and Web3 principals will set how transactions are made.

The problem

The problem is that Meta, Alphabet, Apple, Microsoft, ByteDance and the other titans that rule the internet today won’t give in to this vision without a fight. Those who believe in the potential of Web3 as a once in a lifetime chance to reset the internet as a force for good, fear that big tech will attempt to recast Web3 in its own current Web2 form. That is –the metaverse might be realised as something like Ready Player One where entrepreneurs, however benign, still reign supreme.

There are other issues too. In recent months, market prices of major cryptocurrencies have tumbled, the trading volume of NFTs has slowed, and, most importantly, some pioneers of the space have

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“IT’S GOING TO BE HARD AND IT’S GOING TO TAKE HEART, BUT THE UPSIDE OF PROVIDING A MAKER DIRECT ACCESS TO THEIR MARKET IS STAGGERING.”

WEB3 WILL REPLACE CENTRALISED, CORPORATE MONOLITHS WITH DECENTRALISED, COMMUNITY RUN NETWORKS COMBINING THE OPEN INFRASTRUCTURE OF WEB1 WITH THE PUBLIC PARTICIPATION OF WEB2. WE ARE IN TRANSITION TO WEB3 NOW. declared bankruptcy because of failed risk management and misuse of consumer funds.

“The value proposition for consumers at the heart of Web3 is a powerful one,” McKinsey reassures, while acknowledging huge questions need to be resolved. “Regulatory oversight, user experience, and the underlying technology will all need to further mature if Web3 is to ever reach mass adoption.”

Yet because of the technology’s disruptive potential every industry, including those in content creation, need to keep informed, if not actively experiment. Despite the recent market downturn, the speed of innovation and investment is unlikely to slow.

Venture capital investments in Web3 exceeded USD18 billion in the first half of 2022, remaining on track to top the peak of USD32.4 billion worth of deals in 2021.

“We are already starting to see the emergence of Web3 native marketplaces, payment networks, and deposit and loan platforms,” McKinsey advises. “The emergence of Web3 gaming, social, and media platforms – the Web3 metaverse – could be next.”

What’s more engagement is growing fastest among younger generations.

In a recent McKinsey survey of 35,000 active online users in some of the largest digital-asset markets –India, Singapore, the UK and US – 20% of respondents age 25 to 44 said they own digital assets. Two thirds of those had already made payments using digital assets and just over half had used NFTs as a form of digital identity or performed play-to-earn activities with digital assets.

Content creators at the heart of Web3

Here’s where Neal Stephenson comes in. Not content to let Web3 become the domain of capital he has co-devised Lamina1, a suite of blockchain, interoperating tools and decentralised services optimised for an open metaverse. In Stephenson’s vision creators are placed front and centre.

Since no blockchain has been expressly designed to support the unique needs of the open metaverse or that of creative communities, he maintains, that’s what Lamina1 will be.

It’s worth quoting his argument in full from the white paper announcing the project.

“Makers have long relied upon financiers, platform owners and publishers to grant their ideas oxygen and provide a pathway to broad distribution and monetisation. Though the introduction of new software and tools has allowed more amateur makers to enter the market, it has not tipped the model toward creators. This is squarely what we’re interested in – building a home with more favourable economics for those who create the content we voraciously consume.

He continues, “Today, storytellers, deep-thinkers and designers pitch and hustle in search of funding – in games, music, film, and fashion –– only to hand over 30-70% of their revenue, oft post-recoupment, to lenders and middlemen. By acquiring the work of creators, the platform owner expands the portfolio with subscriptions, ad revenue and insights, none of which is shared with those who bring the platform such success.”

Pulling no punches, he declares: “Inexorable economic forces drive investors to pay artists as little as possible while steering their creative output in the directions that involve the least financial risk. Lamina1 lights a new path forward.”

What is Lamina1?

Well, it is currently under active early-stage development with a roadmap to launch in 2023. It is building a blockchain with payment mechanisms and development kits. The venture is backed by prominent tech leaders, notably Epic Games and Unity, because the vast majority of today’s immersive metaverse experiences are powered by game engines.

More than this, though, Lamina1 wants to be the rallying point for an ecosystem of open source tools, standards and enabling technologies “conceived and co-developed with a community of creators.”

Stephenson explains, “As this new digital economy crystallises, so does the potential to reimagine the financial systems and foundational structures that fuel it. In its early stages, the success of this movement depends on the conviction of companies, creators and consumers to demand something different.”

He is pitching Lamina1 as a Skywalker which will wrest power from the Empire.

“None of this works unless developers ignore the lure of working with well-funded giants and sign up to a rebel effort devoted to an open metaverse,” says Stephenson’s Wired colleague Stephen Levy.

Stephenson himself ends on a note of which Marx would be proud.

“We march waving the pirate flag at the front of the cultural movement, asking both creators and consumers to join the fight for greater agency and ownership – the fight for an economy that is imagined, produced and owned by its creators. It’s going to be hard and it’s going to take heart, but the upside of providing a maker direct access to their market is staggering.”

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