A rant about why LN micropayments matter so much in this new media landscape, and why I created http://www.QuestionsForGood.com as a first attempt.

In the early days of the internet, banner ads served as the primary method of monetization for online content. At the time, online payments, let alone micropayments, were neither safe nor functional. These ads, typically displayed by a third party known as an 'ad network', functioned as a form of micropayment for the content users consumed. This model essentially transformed the consumer or reader into the product by capturing their attention and selling it to the highest bidder.

This concept wasn't new. Traditional media, especially the television industry, had thrived for years using a similar model. However, the internet's approach involved a greater level of intrusion into consumer privacy. Despite this, the internet was hailed as a 'revolution' that should have offered a superior method of monetizing valuable content."

However, as the internet evolved, it became clear that banner ads had created a number of negative incentives. One of the biggest problems was the rise of clickbait. Because advertisers were paying for each click on their banner ad, websites had an incentive to create sensational headlines and misleading content in order to drive more traffic and generate more ad revenue. Without having to care about if the end user found the content valuable after reading it, all it mattered was to grab his attention for a brief moment.

This focus on clicks also had a negative impact on editorial decision-making. In order to drive traffic and generate revenue, websites began prioritizing content that was more likely to attract clicks, regardless of its quality or relevance. This led to the proliferation of low-quality content and the suppression of more meaningful or nuanced discussions.

In addition to these problems, banner ads also created a significant influence of advertisers on editorial decision-making. Because websites were reliant on ad revenue to survive, they were often unwilling to publish content that might offend or alienate their advertisers or “brand safety standards”. This led to a significant amount of self-censorship and a lack of diverse viewpoints on the internet.

A girl once asked her mom why she cuts off the ends of a roast before cooking. The mom replied, "That's how my mom did it." The girl asked her grandmother, who said, "That's how my mom did it." When the girl asked her great-grandmother, she laughed, "I did it because my pot was too small. I guess nobody thought to stop once we got a bigger pot.” Looks like we have the same “cargo cult” in the content / media industry.

Leveraging the Bitcoin Lightning Network for direct micropayments can liberate content creators from ad-reliance and give users control over their support. This method offers five benefits:

Privacy: Users aren't exposed to targeted ads, preserving their privacy. Freedom: Creators can produce content without advertiser restrictions. No Middlemen: Direct payments mean no intermediary deductions or payment delays. Feedback: Creators learn what content is truly appreciated, beyond misleading clickbait metrics. Quality: This reward system discourages low-quality content, incentivizing valuable work and disincentivizing deceitful clickbait.

While there are certainly challenges to be addressed in massive adoption of micropayments using the Bitcoin Lightning Network (mostly a case of UX), it is clear that this technology has the potential to fix many of the problems that have plagued the online media industry.

In a 'Value for Attention' (VFA) model, the intermediary often extracts the lion's share of value from both the creator and the consumer. They do this by levying a substantial fee (~30%), holding onto the money for an extended period, and collecting data from both parties, which they may then sell to others.

While there is undeniable value in the platform (intermediary) that brings both parties together, it should not be the chief beneficiary, especially when the exchange involves digital products from both sides. This situation requires no substantial logistics, and the marginal cost of distributing each piece of content or ad is virtually zero.

Consider how much value has been captured by intermediaries like Google, Facebook, and ad networks. This value could have improved content quality or fostered profitable business models for creators focusing on small, high-value niches. I estimate that around 50 billion USD was lost to intermediaries just in 2022, a year when banner ads generated a massive 155 billion USD.

It is hard not to compare this situation to how financial institutions have exploited customer savings through fees and many other strategies by positioning themselves as “necessary” intermediaries, they extract substantial profits while offering comparatively minimal value.

This analogy holds up as both industries are primarily information-based (money is nothing more than information), and with the advent of the internet and Bitcoin, the cost of transmitting information has trended towards zero. Yet, these monopolies have managed to keep the price inflated.

Now, this is not just a one sided issue for creators, if you have any idea on how much money has been extracted from advertisers due to placing their ads programmatically in “relevant” content which was actually just made to precisely attract those ads without delivering actual value content, you’ll understand that this industry created a lose-lose “solution” in which the intermediary is the main winer and the advertiser has only been seeing diminishing quality engagement rates on their ads.

For those who still hold that 'content is king,' let us now restore its rightful reign.