This is an editorial opinion by Will Schoellkopf, author of “The Bitcoin Dog” and host of the Bitcoin podcast “It’s So Early!”
When it comes to paywalls versus #value4value, is it really everything or not?
Author’s note: My intention is not to offend anyone. I will use specific people’s quotes for examples, but I mean to respect the challenge of ideas, not to attack people. Healthy debate ideas in good faith helps Bitcoin, let me understand.
In Gigi’s article, “The Freedom of Value,” he breaks down what’s broken with the monetization of information, “The problem with the internet is that information wants to be free.”
As a content creator, in my case a writer, this problem with the internet hits home. A lot of work goes into writing great content, and I don’t work for free. I look to be compensated for proof-of-work. As Joker said, “If you’re good at something, don’t do it for free.”
Gigi breaks down the problem of just trying to sell information (like books/articles written) behind a paywall into two distinct reasons, the “MTX problem” (the Mental Transaction problem) and the “DRM paradox” (the Digital Rights Management paradox).
I admit the “DRM paradox” has no solution: “content will only be locked behind paywalls if it sucks. If it’s good, it will be released.
In addition, Gigi explained: “The MTX problem, with MTX short for ‘mental transaction,’ refers to the problem of irreducible mental transaction costs that are present in every transaction. Every time you hit the paywall, you have to make a conscious decision: ‘Do I want to pay?’
Because Gigi “believes.”[s] that the MTX problem is bigger than the DRM paradox,” which will be the focus of this article. Gigi admits the traditional solution to save consumers from the headache of mental transactions is the subscription model, but then many different subscriptions are required for exclusive content that is no longer practical.
With an open mind, willing to see not only black and white but happy shades of gray, consider how lightning microtransactions, distributed in the right way, can solve the problem of mental transactions. As Nick Szabo states:
“The micropayment system assumes a solution to the problem of mental accounting. If someone can solve this problem … the savings will be enormous even in existing businesses … not to mention all the new possibilities that can be created with lower transaction costs .
To begin with, why do people like to buy books? Nick Szabo answers succinctly: “Flat fee is an implicit and implicit insurance contract.”
When I offer ebooks at a flat price, the reader is safe. He knows he has it and can read it in his spare time. However, this flat price creates a barrier to entry. So it’s all-or-nothing if they want to read an ebook. But if I break this barrier into pieces, and make each chapter a mini paywall pay-per-click lightning transaction, readers only pay what they like!
Enter: the pay-as-you-enjoy model. If the reader likes the chapter, they can pay each click to read the next, and the next. If they finish reading before reaching the end, they will save themselves from having to pay to read the whole book. It’s not all-or-nothing!
Through pay-as-you-like, reading lose insurance that I will not increase the cost of each chapter as they continue to read through the book over time, but continue to think that for a bit.
Nick Szabo points out the flaws of the pay-per-click monetization model: “Currently there is floating the idea of ’pay-per-click’, a micropayment for each click on the Web to pay for the owner’s content. However, since there is no opportunity to browse the content, there is no way to directly determine whether it matches tacit preferences: there are no explicit preferences that customers can observe that are accurate.Browsing previews or book covers is still inaccurate, and increases the mental cost of being more accurate.
Again, I build towards a solution to a mental transaction problem. The “attribute observation cost” is still there, and that’s fine. There is no attribute observation fee on Value4Value as readers can continue reading without paying anything. There is no cost per click. Even still, Value4Value faces the same final problem that pay-as-you-go solves. As Nick Szabo sums it up:
“Consider, for the moment, perfect information on the product at hand, and there is no uncertainty as to the future cash flow, the third and more fundamental source of the customer’s cognitive cost remains, which is the cost of making decisions with great, but however very incomplete. , alternative set.”
Even if the reader knows everything about the content, and knows what their budget is, how can they know that they should spend more money than others?
In practice, consumers only make decisions because they have to. The mental transaction problem remains because they decide that they will value it again when they finish reading it, or they are released because they have spent money to read the work in the first place.
Value4Value simply postpones the mental transaction problem until the reader has finished reading. As Adam Curry explains, “The Ask is the most important piece of the puzzle. The #1 reason why people don’t give to charity and the like is because they aren’t asked, and the same goes for the Value4Value model.
Since part of the Value4Value loop is “Ask,” it doesn’t solve the “costly decision-making” part of the Mental Transaction Problem. Versus pay-as-you-enjoy, readers can finish reading and feel happy that they have paid a price that I feel is fair, instead of an internal wrestling about who to support.
In fact, in a flash, I think we are close to solving the intelligent agent problem that Nick Szabo described:
“There seems to be a fundamental cognitive bottleneck. One proposed solution is an “intelligent agent”. But since the agent is programmed remotely, not by the consumer, it is difficult for the consumer to determine whether the agent is acting in the consumer’s best interest, or in the best interest of the consumer. the best partner — perhaps, of course, the least difficult. is to read the full statement of appropriate costs. Furthermore, the user interface to enable consumers only express sophisticated options to less agents, and may represent another basic cognitive bottleneck.
Nick describes a “smart agent” as someone the consumer sends to make purchases on their behalf – avoiding headaches – but they still have to explain to the agent what they like. As part of pay-as-you-enjoy, once the consumer sets a budget (the aforementioned “flat fee” insurance), they are free to engage in pay-per-click reading without worrying about overspending! This agent that reduces sats per click is not programmed remotely, but by the consumer. In addition, consumers see the author’s monetary policy in front of them when setting their budget. They know the price of each chapter, but also how much they have to pay to get one month of free access – an incentive to give authors what they see as full value for their work! The pay-as-you-go user interface is great. Consumers set their budgets and then pay per click!
Nick Szabo summarizes the MTX problem as follows:
“We have seen how customer mental transaction costs can be found from at least three sources: uncertain cash flows, incomplete and expensive product attribute observations, and incomplete and expensive decision making. These costs will increasingly dominate payment system technology costs , set limits on bundling granularity and pricing. Pricing is not free.”
In the table above, they are tied. However, when it comes to content written like a book, I think pay-as-you-like has the edge.
As Adam Curry points out, only ~4% of people rate again. To him and his established podcast audience, he thinks it’s okay. He said, “However, everything works out in the end.”
This “Somehow” is misleading. He emphasized the need for a “Feedback Loop.” “Gone are the days of static broadcasts.
- Inquire
- acknowledge
- repeat”
Books don’t live, they breathe documents. They are static. If recognition and feedback is required to monetize 4% of your readership, it’s a lot of pressure for a new author without a large following or a way to give back recognition.
I will leave it to the readers to make a valuable decision at the end of the work. I’ll let them pay-as-you-like! And I will implement a donate button and a boost button as well so they can give extra value again if they especially like the scene!
You can try out lightning active pay-as-you-like at BitcoinDogBook.com, powered by Mash! In a follow-up article, I present the technical architecture details of how content creators can implement the same model!
This is a guest post by Will Schoellkopf. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.