Why Isn’t Crypto Changing the Creator Economy?

If you want to know why there is so much talk about the potential of crypto and blockchain to transform the creator economy, a good answer might be that there is so much need for transformation.

No one has been more vocal than musicians, who rant about the very small micropayments they receive for song streams — $0.003 to $0.005 are the most commonly quoted numbers, which translates to $3,000 to $5,000 in profit for 1 million plays .

Another reason is that so many other companies, including social media giants like Facebook and Twitter, are trying to fix a very broken system that it’s an obvious target for an industry built on the concept of eliminating financial intermediaries .

See also: Facebook is moving from reporting to the creator economy

It’s a simple playing field: creators can take payments directly from fans, without a bank, credit card issuer, or payment processor cutting down the middle. That sounds great until you actually try to send bitcoin from one digital wallet to another: it’s a process even tech-savvy people find cumbersome.

Continue reading: Crypto Basics Series: What is a Crypto Wallet and How Can You Avoid Losing a Quarter Billion Dollars?

Then there’s the reality that most creators live on some sort of platform: Twitter or YouTube, Spotify or Apple Music, or any of the many, many content creator-centric platforms for musicians, artists, social influencers, podcasters, topic educators, and more. These platforms tend to want a cut — or pay what they want.

And on these platforms, crypto payments are not really required. Sure, in April, Twitter partnered with payments technology company Stripe to use crypto — starting with the USDC stablecoin — for subscription payments for creators. But Stripe began supporting Twitter’s traditional Super Follows payments back in September of last year.

Related: Twitter Introduces Stripe-Powered Super Follows for Creator Subscriptions

However, as more merchants start accepting crypto payments through processors like BitPay and Strike, and more people start actually paying with crypto, more than a quarter of the nearly 60 million US crypto consumers prefer merchants who accept digital assets to PYMNTS US Crypto consumer study found that it should become easier and more lucrative for individual creators to accept crypto with a pay button instead of a digital wallet transfer.

Of course, if they follow the more standard process of depositing crypto but receiving cash, which is becoming the norm – not least to avoid dealing with volatility – it doesn’t really change the creator economy as much as it adds a new payment track.

So where does crypto fit in?

The best current answer is social tokens.

There were others, like Steemit, a blockchain-based social media and blogging platform that allowed developers to earn STEEM tokens for content creation. But nobody really took off.

What is a social token?

Social tokens are bespoke cryptocurrencies built around a specific brand, community or content creator. At its core, it is about access and benefit.

At the higher end, a number of top European football teams such as Barcelona, ​​​​Manchester City and Juventus have embraced Fan Tokens, offering relatively early access. Juventus token holders can vote in polls on topics such as the song played when the team from Torino, Italy score a goal, while FC Barcelona token holders get VIP access to stadium tours and player meetings.

More recently, they have been included in the United States by the Ultimate Fighting Championship (UFC), 28 of the 30 teams in the National Basketball Association, and half of the 32 teams in the National Football League.

But individual artists and creators of all kinds have created social tokens on Rally, a platform that describes itself as “a place for creators and their communities to build their own independent digital economies.”

All of this should tell you what you need to know about the key strengths and weaknesses of fan tokens: they are highly dependent on superfans and require a constant stream of specialized content and access to keep them desirable – i.e. valuable.

“They have to offer some sort of enduring benefit,” Mason Nystrom, an analyst at crypto research firm Messari, told CoinDesk. “If people buy your token, you have to keep offering value or have an exit strategy, which is quite challenging.”

Which points to a fundamental problem with crypto as a tool of the creator economy: it doesn’t really make it that much easier to engage with fans without a large following, and it doesn’t really make it that much easier to get paid without a platform to chat with fans in to get in touch.

And if you’re making $0.003 per song or 0.000003 BTC, it doesn’t matter until you’re Drake, who pulled in 3 billion streams in the first five months of the year.

For all PYMNTS crypto coverage, subscribe to the daily newspaper Crypto Newsletter.

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NEW PYMNTS SURVEY FIND 3 OF 4 CONSUMERS WITH STRONG DEMAND FOR SUPER APPS

Around: The results of PYMNTS’ new study, The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy, a collaboration with PayPal, analyzed the responses of 9,904 consumers in Australia, Germany, the UK and the US and showed a strong demand for a single multifunctional super app instead of using dozens of individual apps.

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