About five months ago, I was just like you. Rolling my eyes at crypto Twitter and guffawing at the excitement over NFTs. But then I was forced to accept a freelance payment in crypto, and the process of getting that money into my bank account got my curiosity going.
For one, the money actually showed up. I actually got paid. So my assumption that crypto tokens are worthless started to erode.
Thus began my journey down the rabbit hole to figure out what else I was wrong about. The series of revelations that followed is something difficult to describe, but I’ll do my best in the coming weeks and months to communicate the promise of web3 to my fellow journalists.
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Concrete examples are often missing from explainer articles, so I’ll start here by examining a couple of key dynamics that web3 changes for journalists.
In the web2 world, Substack has shown that individual journalists can become independent businesses if their audience is large enough. But since Substack itself needs to make money and the company has its own overhead, Substack’s platform fees are relatively high: 10% + credit card fees. That means a journalist’s audience has to be that much larger before it can be profitable.
Web3 tools cut out the need for a Substack company to sit in between the journalist and her subscribers. Subscribers can send money from their crypto wallets directly into the journalist’s wallet, and the journalist can send the subscriber tokens that bestow certain benefits.
There is a small fee to perform these transactions, but it’s relatively minimal when compared to Substack’s 10%. The fees in web3 pay for the small amount of computing power it takes to process the transactions, rather than the cost of Substack’s payroll and overhead.
And now, since the journalist owns that relationship herself, she can offer new ways for subscribers and readers to engage with her and her work. Journalists can offer premium subscribers early access to story ideas, or follow-on commentary about a story, or access to a weekly video chat. Whatever the journalist can think up, or the audience requests.
Instead of waiting for Substack to develop new ways for content providers to engage with audiences, the journalist is free to provide whatever service/access she wishes at whatever price makes sense.
The end result is that many more journalists can turn independent with much smaller audiences.
If a journalist needs to make $4k per month to strike out on her own, but only has 100 dedicated followers, those 100 followers may be willing to pay $40 per month for exclusive access to the journalist’s content. If not, the journalist can ask those followers what would be worth that much to them. This direct relationship has all sorts of efficiencies that can change the economics of journalism and re-align incentives for journalists and their readers.
It’s possible to do this in web2, but not easy. More on that later.
In web2, if a journalist wants to start her own blog, the business dynamics of the endeavor are pretty rough. Estimates put a minimum profitable audience at around 50,000.
And the main way to monetize that audience is through sponsorship deals, products placement, paid content, etc. All of which doesn’t really serve the journalist or the audience.
It’s a pretty steep price for striking out on your own, and not many journalists have the audience and resources to pull it off, let alone the courage to try.
In web3, journalists are able to customize paid offerings to be more aligned with audience desires. Readers could pay to own an article, to get early access to breaking news, to get access to exclusive posts, etc.
These things are possible in web2, but journalists would need to hire developers to build out the infrastructure. Web3 tools have much of this functionality baked in already, making them available to be used directly by journalists and content creators.
It’s true that there’s a bit of a learning curve for web3. It’s a different culture. There are different mental models. It asks that we think about foundational economic principles that have been invisible in the background until now.
But that curve is getting more gentle every day. And the reward on the other side is autonomy and financial independence. It’s more than worth it. And once you’re on the other side, most of the complexity and difficulty fades into the background once again.
It’s called web3 partially because it asks very similar things of early adopters as web2. The internet was a novelty to many of us before it was simply the way everything was done. Web3 is coming whether you hop on or not, but I hope you’ll jump in early to help make it better instead of waiting for others to decide what it will be.
Cover image by Zoltan Tasi on Unsplash