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Nov 10, 2022
Natively integrated payments will become ubiquitous across all social media platforms as well as business platforms, it's just a question of when. Web3 is the new era of transacting and engaging online, and for platforms and businesses to stay relevant, they must embrace and incorporate these new technologies.
There currently exists a core problem on social media apps where the content creators cannot directly monetize their content. Instead, content creators provide entertainment while the companies providing the platform get to monetize their content.
The Web2 Model
Any current methods of monetization available for content creators are non direct. Creators on platforms like Instagram or Youtube have to resort to product placement and finding outside sponsors to reach monetization. No monetization is internal or directly related to the platform with the exception of the adult platform OnlyFans.
The platforms make plenty of money from the content creators. They advertise on their platform and the platforms collect every shred of data possible from their users. The level of data collection is mind boggling. Many of these platforms will know where you were geographically when you searched a term or a phrase or used their app. These platforms monetize this information to advertisers and as a result the user experience is compromised.
A common phrase “if you don’t pay for the product, then you are the product”. Web2 applications and platforms have largely pushed and abused this model. Enjoy a tool for free while the company in the background gathers and legally owns every piece of information possible about you. Usually that information is sold to advertisers but that is not always the case and is largely why everyone receives so many scam calls directly to their phone number.
Enter Web3 and an Improved Micro Transaction Possibilities
Web3 has the tools to upset this entire model. Web3 enables fluid transactions of capital in various cryptocurrencies. Viewing an article may cost you 0.01 cents that goes directly to the authors wallet. Subscribing to a creators Youtube channel may cost 0.50 cents that goes directly to the creator. While this is hypothetical now, Twitter is rapidly moving forward with this model. Twitter enabled bitcoin tipping which allows users to instantly send micro amounts of bitcoin to each other. Recently Elon Musk after acquiring Twitter has mentioned the need for Twitter to allow users to hold and send capital to each other so that creators can be paid.
Other examples include NFT platforms like E-NFT.com where users can buy songs or albums directly from artists with cryptocurrencies and then stream their music. Tipping, transacting and content-gating are all core Web3 functionality that will be integrated into social media platforms and other websites. One of the primary upsides for social platforms is the ability for them to become ecommerce platforms with built in audiences, driving massive new revenue opportunities for the platforms, and a way to keep their user base engaged.
Many platform-based payment systems fail because they become their own "walled garden" - a major tenet of Web3 is open and interoperable. Instead of creating their own payment solution, platforms need to embrace the ones that already exist (i.e. cryptocurrency payments).
Smart Contracts can easily still maintain a platform fee so the social media company or the hosting website can get a cut of any onsite transactions, while the majority of the funds can go directly to the content creator.
This future is headed our way quickly and as soon as one web 2.0 tech giant works this system out, the others are likely to immediately follow suit for risk of losing their audience and their main asset, content creators.