Whitepaper

The Problem

As we embark upon the digital age, we are seeing huge changes in the way we live. The internet is a revolution in terms of how we communicate with each other. Media is becoming more interactive and more on-demand as consumers are being given more choice than ever before. Advances in digital media production equipment have meant that the cost of producing and distributing content is lower has ever been. More content is being created and creators can reach a global audience giving scope to specialise into focused discussion of subjects that might be of interest to a smaller group of people. Ironically though, it sometimes seems that the quality of content is lower than it has ever been. There is so much content out there vying for everyone’s attention using ever more creative ways to make you look.

In the days when TV and Radio were being broadcast using the analogue system, there was a limited bandwidth in which to play the content. In the UK entire teams of people were required to maintain just three channels of terrestrial television (for a limited number of hours per day). An editor had a high degree of control over which content was being broadcast. In the early days of the internet, we dreamed that this new innovation would lead to a democratisation of media as everyone could create and broadcast their message to the masses. In reality though, it seems that media is more controlled than ever before as just a few monopoly platforms deliver the content to the masses. Consumers now expect to get content for ‘free’ and at first glance it seems that we are not paying. The big media platforms do get paid though, when they act as middlemen, harvesting and selling our data to advertisers. They are not getting paid by the consumer directly and we are not really getting content for free. We are paying for it in the goods and services that we chose to buy as they have the cost of advertising built into the price.

As profit maximising businesses, the platforms are incentivised to promote content that makes them and their shareholders the most money. The content that generates the highest profits will be the content that generates the highest advertising revenue. In the modern world of digital delivery, every piece of content can be tracked and information can be stored and aggregated. That information can be used to promote the content to users that will generate the most revenue. This is the Web 2 algorithm.

Centralisation of media distribution has occurred with the Web 2 model. The network effects of the internet have generated a tendency towards natural monopolies. Return on investment for advertisers is higher on a platform where there is more information stored about the users of that platform. This is because an advertiser can more effectively target the users with ads that the computer modelling tells them will work on people with a particular set of characteristics. Smaller sites with less customer information will not be able to allow such targeting and will prove to be less profitable for an advertiser. The end result is that most advertising revenue goes to the biggest platforms with the most data.

The value in a platform like Facebook or Tik Tok is not in the computer application but in the people that post, comment, like and share. The work is done by them as the creators and the promoters of content, but the money made by the platform goes to the shareholders. With this model there is no incentive for the shareholders to respect the users data.

VC funding has been the mechanism for getting the big tech companies off the ground. Capital investment enabled platforms to advertise in order to gain users quickly and become the natural monopoly. The Web 3 model needs less capital for marketing as the customers can become the promoters of a good platform with good content.

An Alternative Monetisation Model

The monetization model that web 2 has built seems to be a little less than ideal. The question is how do we fix it?

It looks like the first piece of the puzzle is already in place, we have a money system for the internet. Bitcoin is an internet native currency, decentralised and controlled by no single entity. Operated on a peer to peer basis, it is open for everyone to use and it is an immutable record of transactions which means that it is the best store of value that we have ever had. The more recent development of the lightning network offers a payment system that sits on top of bitcoin. This gives us instant payments that are virtually free of charge, to anyone in the world.

Smart contract technology is being used to register media files on the blockchain using Non Fungible Tokens (NFTs). This could be the beginning of something big as this technology allows someone to own an item of media in their own wallet. Buying songs on Itunes or audiobooks on Audible does not really grant ownership to the purchaser. Their access to that digital content is entirely dependent on the existence of that third party application. If Amazon went bust or decided to censor your content then you would lose access to it.

When someone chooses to pay for something, they are effectively voting for the continued production of that good, or service. A dataset can be created that records the number of times that people chose to pay for an item of media. The aggregation of that data could be used to curate quality.

Many of us find that the best recommendations we get for media content come from other people. Excalibur will use the aggregated information of the payment ‘votes’ of all the people that consumed the content, to act as a poll of what are the best quality experiences.

Excalibur data can be made open and anonymous which would make it possible for anyone to build applications on top of it. The first application might be to simply rank the content that has the highest amount paid for each item. That should be a good indicator of quality. They may have been motivated to pay because they felt that they had learned something, been entertained or given a new perspective on something by the creator.

More sophisticated applications could allow the consumer to make the choice to share some of their personal data in an encrypted way. The ranking of content could take into account their preferences in combination with the overall score of successful payments expressed by the wider audience. They could receive a list of recommendations that would be a balance between their personal preferences and aggregated votes of money paid by the wider audience.

All of this would be in contrast to existing platforms that deliver content where they are ranking according to the total number of views. This number can be increased by spending a lot of money on the marketing of the content rather than the quality of the content itself.

Machine learning systems use ‘big data’ to define probabilistic models. These models can suggest the likelihood of certain things happening. If your aim was to find content that would be most likely to lead to a consumer purchase, then you might create a system that monitors the successful ‘click throughs’. A platform might have millions of videos on it and based on the results of the big data analysis, they could rank the videos in terms of ‘average’ money spent during and shortly after each video is watched. Logically, the most promoted videos should be the ones that score highest in terms of money spent. These will be the ones that are generating the most advertising revenue for the platform and so promoting these videos will lead towards the goal of profit maximisation. Companies such as Facebook have discovered that this is not the most popular method of monetization for the consumer. Perhaps a more palatable option would be to have the consumers think that it is in fact the personal information (as opposed to click throughs) that is being used to recommend the content. It is worth noting that Google and Facebook don’t reveal the rules of the algorithms that they employ to recommend content to us. In reality, they probably are using the consumer’s personal data to target them, but not in the sense that they might think. They are using your data to measure the effect of different types of content. If they find that a certain type of content makes you more susceptible to advertising, then they can promote that content to people with a similar data profile as you. For example, if you are someone that likes cats, then they know from their data analysis that people that like cats are 5 times more likely to click on an ad after watching a cat video. In that case you are going to get a lot of cat videos promoted to you.

What we are proposing here in terms of consumer feedback through monetisation, would turn the system upside down. It would take us from one where the companies are telling the consumers what is good quality, to one where the consumers are telling the companies what is good quality. The consumers should be telling the producers what to produce and the way that consumers achieve that power is by paying for content. Paying for something creates a market place, a voting system where the consumers are collectively identifying quality. This is preferable to a system that tells the consumer what to buy, as giving them the power to do that will undoubtedly lead to them selling you the thing that is cheapest to produce. In this scenario they may try to make you think that the product is better than the thing you really wanted. These are profit maximising entities after all.

An alternative is an enterprise where human intelligence is an integral part of the operation and consumers are effectively a market research collective. They receive content for free and they are given the option to pay for it. Consumer choices collectively indicate the most desirable goods and services, from the selection that is being presented to them. Their decision to pay acts as a vote of confidence for the producer and at the same time they are funding future production. Consumers become nodes in a Human Intelligence Network (HIN). Furthermore, they have the option to become the marketers and distributors, as they choose to share the very highest quality content with their own network. These networked curators, investors and distributors of content will get paid for their work.

We all perhaps have a sense that the financial system is broken and it appears that there is no way to fix it. How can anyone compete with the big tech monopolies when they have so much data on all of us? How could anyone expect to be able to start something that could compete? Why would anyone pay for something that they could do for free?

The answer is in the blueprint that was given to us in the ‘Bitcoin White Paper’ by Satoshi Nakamoto, 2008. The Bitcoin system rewards early entrants to the network with digital assets that are integral to the functioning of the network. The work that is being done by the nodes on the network provides security and integrity. Excalibur operates on a similar basis, giving digital assets to the people that do the work of producing, curating, distributing and investing in content. The early entrants to the network earn more digital assets as they have taken a risk on an uncertain future. Just like the early bitcoin miners in 2009 who got a lot of bitcoin for using a small amount of electricity on a home PC. Early adopters of Excalibur will earn a large amount of Excal tokens for the work that they do in building the network. Selecting and broadcasting quality media will generate programmatically distributed rewards.

This is a proof of work system, as the only way to earn the Excal tokens is to do the work. It is a network that will be created by the people and for the people. It would operate in a very different way to the profit maximising corporations that currently rule the internet. Instagram, at its core, is a computer application. The real value in instagram is in the network of people that post, like and share the content, but almost all of the money that is generated by that platform goes to the shareholders. There is an opportunity for a system to be created where the owners of the network are the people that do the work.

Excalibur takes out the middleman and allows creators to connect with their audience directly. It allows their audience to become the rulers of their own media as they choose what they want to see.

The issuance of digital assets by the system is one way by which workers will get paid. But in the early days, few will recognize the true value of the tokens and they will want to get paid in a currency that is more readily spendable. People that participate in the network will get a share of the tokens paid by the customers to the creators. A referral scheme will use smart contracts to reward people for sharing quality content with their contacts.

Our initial focus will be podcasters whose content is crypto related. Their audience will find it easier than most to pay for the content. Also, their audience is likely to understand the concept of Excalibur as a Web 3 project. They will likely see it stand out as a crypto project that is most likely to succeed. Many crypto enthusiasts will likely want to know how they can become part of the project and benefit from the upside. Podcasters have the opportunity to achieve engagement from their audience if they talk a bit about Excalibur in their podcast. They can let people know that they can’t buy Excal tokens, but they can earn them by sharing the content. This will be an effective promotion for both the podcaster and for the Excalibur platform.

The Excalibur Incentive System

How does Excalibur work?

Podcasters upload their content to Excalibur and the platform generates a link that they will send directly to their audience. Clicking on the link will take the audience to a page where they will listen to the podcast. While they listen, they can connect their crypto wallet or enter their credit card details and donate to the creators. The content itself is open source, so you can listen for free. If they choose to join the community of people by crowdfunding, then they are promoting the production of future podcasts.

The Community

The exclusive community of members can speak with other like minded people that were sufficiently interested in the content to pay for it. The podcaster can build community by including a message in the podcast to the audience. They can tell them about the opportunity to become a member and crowdfund the production.

The Network Effect

The community of listeners are incentivized to become broadcasters by allowing them to generate a unique link to the podcast that will include their crypto wallet in the future revenue stream. They can earn an income by distributing podcasts to people whom they think will appreciate the content. The Blockchain rewards people in the network for the work that they are doing in growing the audience for the podcaster. Smart contracts enable the revenue to be automatically split between the creators and the network of broadcasters. This is Web 3, no legal contracts are required, no accounts department, no invoicing and no chasing people for money.

The incentives

Supporting future production

A key incentive for a listener to choose to pay for a podcast, will be the pleasure of knowing that they are supporting future episodes from one of their favourite podcasters. There is an additional benefit, as this process functions a little like a kickstarter project, where the consumer that wants the proposed product to exist, will vote with their money by ‘pre-ordering’. Those that do pay, can add their contact details to a mailing list and have future content sent directly to them, getting early access to the new podcasts and having the opportunity to be the first to forward it onto their network.

Mint an NFT of the podcast

The NFT is held on decentralised storage and will stay in their wallet forever and when they click on it they can listen to the podcast again. It will give them access to an exclusive chat room where they can speak directly with the creator as well as to like minded consumers that have also chosen to pay for the content.

Affiliate Income

Consumers that like a podcast and want to share it can generate an affiliate link. That is a new URL which has the same content, but new payment information. Payments generated from that affiliate link will include the wallet of the affiliate in the smart contract for revenue sharing. They are doing the job of expanding the network for the creator and so they get paid 50% of any revenue that comes from their distribution.

Consumers don’t strictly have to pay for content in order to become affiliates, but by doing so they can be added to the creator’s mailing list for early distribution and that will enhance their earnings power by giving them more chances to be the first to send it out to people that haven’t heard it before.

Micropayments

Blockchains enable low cost fast secure payments on a peer to peer basis. Excalibur is utilising Solana and Bitcoin Lightning to enable micropayments with a transaction fee of a fraction of 1 cent. Traditional payment systems like Visa and Mastercard charge a minimum of 20 cents transaction fee and often quite a lot more than that.

The ability to make small payments for individual items of media means that it is possible to crowdfund content in a way that we have never done before. The amount of money that a podcaster earns from distributing through Spotify or YouTube is incredibly low. Even when they put advertising into their content they are still earning small amounts of money each time a consumer consumes the content. Rates for some platforms are shown in the table below:

Podcasters can send an early distribution of their content to their mailing list of fans. This can be a version of the podcast that doesn’t contain the advertising interruptions that it normally would. Within that context they can describe the concept of Excalibur and ask their consumers to make a small payment to fund future production. In many ways Bitcoin was a kickstarter project for a new peer to peer payment system. Excalibur builds on top of that concept by being a kickstarter project for a new peer to peer crowdfunded media distribution system.

Proof of Diligence

We will build a blockchain that contains all the transactions that happen between wallets within a payment and distribution network. There is a record of every transaction that has ever been made. The ledger can be used to assess the level of discernment for each wallet in the network. Wallets that pay for content early in the chain will be effectively voting with their money for that content. If that content goes on to be a success in attracting payments from many other consumers then the early sponsors can be said to have exercised good diligence. Each wallet will have a verifiable success ratio in terms of how many items they paid for in total versus the number that went on to be a success. In any weighting system that aims to deliver the best quality content to consumers, the opinions of the owners of the successful wallets should be given higher value with regards to the value of content uploaded in the future.

The intelligence that is gathered by the network as to which content has been most highly rated by people in the community has a value. There will be a Green Room where customers can go to find the best content. They will be able to enter search terms that narrow the selection down to their specific area of interest, but the results that appear will be driven by the votes of payments that have been made by the network. This Green Room can evolve into a metaverse where each room represents a different category of content.

Google was a revolution in internet search in the early 2000s because they found a way to use backlinks to create a more powerful search engine with a better set of search results than any other search engine at the time. Excalibur is the web 3 equivalent of Google. The Human Intelligence Network that we are creating is a complete loop of a creator economy

Longer Term plan

The longer term plan is to get enough content on to the platform so that the Green Room becomes a place of real value. The creator community operates as a creator economy upvoting each others’ content and the crowd adds value by selecting and sharing the content that they value most. A place to go to get the best content recommended to you the Green Room will start to have a value if access is restricted.

At some point, people who do not create and do not have time to search for good content may want to benefit from the output of the Human Intelligence Network that is Excalibur. Those people will have to pay in fiat money for the service that the Excalibur community is providing. Namely the work of creating, sorting and ranking of content so that cash rich time poor people can find the best content.

Further Applications

Blockchain technology has proven to be very powerful in facilitating the crowd funding of startup projects. Billions have been raised by individuals all around the world without the need for intermediaries, brokers or traditional fundraising organisations. The main problem so far though has been the tendency for the projects that have been raised money to have turned out to be complete scams. There was a total lack of due diligence being done by the investors. Many people were investing in projects that they didn’t understand. The majority were inexperienced investors that didn’t know how to critique an investment proposal or how to check the validity of the claims being made by the entrepreneurs. Moreover, there was no way of controlling the investment once the funds had been invested. The entrepreneurs were not held accountable in terms of delivery on their promises and there were no checks on how the funds were being spent.

The Proof of Diligence system being developed here can be used to provide a decentralised consensus of the viability of a startup proposal. A greater weighting can be given to the votes of the individuals who have demonstrated good judgement in the past. New investors may want to have their funds distributed on the basis of consensus weighted to the wallets that have proof of diligence. By investing alongside people that have a proven track record, people can get higher returns without having to do the work themselves. Investors would probably be willing to pay a fee to people with a credible track record if that gives them access to quality deal flow. This is a form of decentralised fund management which could lead to very fast and efficient funding for good media projects.

Blockchain payments are programable, so the timing of the release of the funds can be based on achieving clearly defined milestones. This can be the basis of a governance structure that keeps the entrepreneurs accountable to the investors.