Origins
In the last decade a $trillion industry has been born on the back of Bitcoin’s singular technical breakthrough - a solution to the Byzantine General’s Problem - allowing a network of peers who do not know or trust each other to reach consensus via gamifying timestamping of transactions.
Despite iterative technical developments in the design of underlying protocols, the primary drivers of valuations relate to the interaction between the ability to issue a token and then market its revolutionary potential through unregulated fundraising in the form of ICOs and NFTs.
Crypto, Web3 and Narrative Gravity
Bitcoin was born into a world before social media.
Its initial price growth was slow simply because the viral marketing mechanics did not exist to focus attention in the way they do today.
Ethereum arrived at a point when social media was maturing into what we now recognise as the attention economy, aka the system Web3 aims to subvert/resist/replace if you’re to believe the hype.
Polkadot and its family of token economies launched into the late stages of the attention era, following the stratospheric viral growth of sites such as TikTok.
Though the technology has some value, the token marketcaps and the CoinmarketCap leader board are a product of tokens being the product.
There is a very simple explaination for the disparity between adoption and valuations - every token is subject to the incentives of the incumbent media ecosystem and the narratives perpetuated through ever more efficient viral feedback loops.
The attention game
Crypto - the leaderboard, not the technology is a game of stories. How do we know this?
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$161,386,227 = Kusama market cap
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$5,053,261,045 = Polkadot market cap
The technology is the same. The distributions are pretty similar. Adoption too.
So how is one worth 30x the other?
Narrative.
Grifting
With regulations biting, money printing falling, interest rates rising and the cost of living increasing, opportunist VCs cannot rinse anymore exit liquidity from the largest grift the world has ever seen.
The rich are richer, the poor are poorer and the engine room of crypto’s first phase of growth is over.
Hope is all that holds valuations where they are, there is now a race to the exits as strangers operating around DAO treasuries race to coordinate to drive direct and sustained impact in their protocols, before reality hits all involved and the market sells off amid a vast blockspace supply glut.
Media as content
To date, media has been understood in this ecosystem and in the industry more broadly as ‘content’ - aka the assets that fill the distribution pipes.
Videos on YouTube, Podcasts on Spotify, Stickers on Telegram, Spaces on Twitter, Memes on TikTok, Shows on Television etc etc.
When the token is the product, this makes absolute sense, since attention is the game and “marketing” is simply getting people to buy the token, then doing everything in your power to keep the newscycle rolling.
The bigger picture
If we step back and frame the ‘crypto revolution’ as a phase shift in media itself, we can free ourselves from the prisons of the incumbent media industrial complex.
Media theorist Marshall Mcluhan is famous for this line “The Medium is the Message”.
Its essential point, is that every time you change the medium of communication, this informs the way the form of the content distributed.
Media, Blockspace and Meaning
Blockspace is a new communications medium.
Transactions, metadata and narrative assets are packaged up and represent the atomic media elements of this new paradigm.
This is the meaning in the machine.
We can reframe its evolution as a step change in the distribution and form of media and not of computation.
Televisual media → Cable media → Satellite media → Digital media → Crypto media.
Each of these phase shifts relied increasingly large infrastructural spending (before a huge supply glut), each unlocked progressively larger audience reach and indeed the ability to participate and each changed the essential form of the media that flowed through the new distribution pipes.
What is also interesting, is none replaced the previous paradigm - radio did not die when television arrived, it just adds to the media mix of our lives.
Each paradigm relies on some scarce, unforgable foundation - let’s call it the infrastructure layer, that then gatekeeps access to the new distribution paths and media containers that perpetuate the stories of the period and ultimately becomes the focal point for a new generation’s culture.
Viacom, MTV and Music Videos
Viacom is a media conglomerate that is essentially the infrastructure layer of a distribution company whose product is TV shows.
- Viacom = Kusama
- MTV = Coretime regions
- Music videos = Media assets in a region
See it as a hub, with spokes, and those spokes are what the end user (the audience) experiences.
Sound familar?
Networks, Shows and Producers
Ok, so now imagine that Viacom has spend $100m developing core infrastructure for a new network of Channels that make use of some paradigm shift in communication technology.
So they offer these channels to prospective channel operators, who can each programme their own particular network according to the taste of their founders and the expectation of reaching some new niche who are currently underserved by the incumbent media ecosystem.
One particular group thinks that music videos aren’t just a novelty, but the start of a cultural movement and a way to offer exciting creative freedom to talent who aren’t interested in the boring documentaries and news shows that ‘traditional television’ offers.
They pitch MTV and get a bunch of money to fill their network with Shows.
They then take their money and go on the hunt for Producers - after all they need Content to fill the empty space in their schedules.
The best Producers are the ones who don’t want to just shove old ideas into new pipes, but the ones who understand that every paradigm shift in media, also enables the Form to change.
Why treasury spending is insane
Ok, now lets just assess the way the treasuries spend right now and see it through the above analogy.
Viacom = Kusama (or Polkadot if you prefer) aka the media infrastructure layer.
So Viacom launches a bunch of channels - and they’re on 24/7.
Switch on any channel though and you just see a blank screen.
There is nothing to watch.
The Channel Operators aka the parachain teams know they need some hit shows, but they’re too busy spending money on shows for YouTube, that they don’t bother to actually create their own original programming that actually fills the airspace they have secured.
So the Channel Operators hire a bunch of Marketing People.
What do the Marketing People do?
They just go and make more Content for YouTube. More events. More education programmes that have literally nothing to do with the airspace that the Channel Operators want to fill.
Viacom are a little concerned.
They have 100 channels and there’s nothing to watch. And all of the money has gone.
But thats cool, because Viacom have a Common Good Treasury that they can deploy.
They spend $25m over 3 years on a bunch of Marketeers who show up promising to drive ‘awareness’ to their network of empty channels.
So do these Marketeers make shows? Nope.
They do exactly the same as the Parachain teams, they make a load of Content for the incumbent Media Industrial Complex… spunking millions on YouTube Videos, Twitter Spaces all in the vague hope that by some sort of magical osmosis, might result in the airspace not being empty.
Oh and then to make it even worse, they then spend a bunch of the money paying to reach the audiences owned by the competition your new technology is designed to replace.
You can apply this across pretty much every domain of treasury expenditure.
Has any of it been in direct service of filling the new distribution pipes?
Coretime as shows
Ok so Viacom realises that maybe it doesn’t need all these empty channels, maybe it should start with shows.
So now we have coretime - progress.
Coretime is there to start shows.
The most successful shows become channels.
It’s all gonna be token gated / encrypted streams that are only accessible to those with particular keys.
And guess what, this is what the treasuries are for.
To make the shows on the infrastructure that exists here, not on the platforms of those you’re attempting to usurp.
And make great new shows, that leverage the tools, tech and talent here, then tell people on the old channels where to find them.
Stop wasting money on stuff that has zero connection to the technical infrastructure.
People are only gonna watch empty channels for so long before the culture moves on.
