An example

An area where curation markets could be highly effective is the music industry. There's now a way to monetize peer to peer networks rather than fighting the existing reality through ineffective forms of activism.

Open markets are blossoming and an industry to support those markets is emerging. These markets are based on the the democratization of data and the elimination of “walled garden” business models. Industry incumbents are standing on shaky ground and the walls are falling.

To elaborate on some of the issues we face, let us look at the following reality…

Open source AI music is beginning to take off along with anonymous publishing over immutable networks like IPFS, it’s highly likely we will have an intellectual property crisis in the near future. AI could become so advanced that it will copy music, post, and even monetize it. To top it off, we may not have a way to shut it off if it’s developed as a decentralized app or “dApp”. Don’t get me wrong, this is actually going to be a good thing. Let me explain…

Even if things don’t come to fruition with AI music “piracy”, the fact is that people are beginning to post content to immutable peer to peer networks every day. Once published, the content can’t be removed and there is no one to sue for “piracy”. To solve this, curation markets merged with the ideas of many others in the blockchain space, could empower creators without the need to “sell your soul at the crossroads”.

If creators have an easy way to participate in these new markets, they can build their network effect and reap the benefits that curation markets can potentially offer. This alone turns the tables on the “piracy” conversation regardless of “middle men” and their opinion on the disintermediating effects of peer to peer networks. This could also be a boon for artists looking to supplement current sources of income or possibly even bootstrap operations for an artist just starting out. Some forward thinking artists are already beginning to experiment with token models.

Other Examples

A curation market can take many forms and there are some in existence already. Examples that the district0x community has brought up are Rare Pepe, Steemit, Reddit tokens and depending on how abstract you want to think of things, Doge Coin.

However, the difference with curation markets like Meme Factory is that the market can be decentralized and handled solely by a smart contract. This opens up some interesting possibilities.

Breaking it down

When you contribute ETH to a curation market contract, the contract will automatically send you a unique ERC20 token that represents that content. Each time a person contribute ETH to this smart contract the contract could slightly increase the cost of the token. As a piece of content increases in popularity it naturally rises to the top as one of the more valuable tokens and brings a piece of content to the top of the curated content. There are even discussions about ways to give creators more incentive and value than a market speculator using these markets.

Visualizing it

Disclaimer: this is taking things several years down the road and is speaking in the abstract about the likely possibilities and in no way will reflect how things will look in the future. Though having a vision for where we want to get is important and I encourage others to share their take as well.

This can be imagined as a similar layout as reddit, however instead of upvoting, you spend ETH and get a token and it is upvoted.

This could even be simplified to a point the microtransactions are behind a superimposed UI that doesn’t even mention cryptocurrency, ethereum or smart contracts. It would simply have certain actions within an app that earns the ability to upvote, similar to Reddit Karma but a balance of “points”.

This is a business to consumer payment model similar to the DNT rewards district0x gives for submitting a proposal. However, on the backend this could be a small amount of ETH represented in another voting power balance.

When you have voting power, you can easily use it to upvote and you would receive a token and other content specific benefits to show that you “own” a piece of content. To the end user, this could unlock an educational work flow and opt in private key management along with a risk disclaimer. Or they can decide to not do this and continue to use an app as is.

Governance

While an app like this could be a superimposed centralized service, the back end users can choose to participate directly in governance by acquiring DNT and staking to a district that is powering these front end apps. This would give token holders and business professionals making these apps, a direct say in how the district and business model operates on a very deep level.

Are we there yet?

While the economics of a smart contract driven curation market are yet to be seen, it is definitely worth exploring. Especially considering that this would expand on the “freemium” model employed by companies like Spotify. Instead of giving offering shallow value added services or advertisement removal, curation markets would open up an entirely new revenue source. With this new found revenue, you could also have the option of paying people to not “pirate”. You would also create a free promotional network for content creators.