Crypto, Blockchain, and YouTube? (also, how to get rich)

Let’s just say it: a̶l̶l almost-all cryptocurrencies are, well, just hype. One obvious exception is (o.g.) Bitcoin, which most people call the “gold” of the crypto world. But what on earth are those other FIVE THOUSAND cryptocurrencies?

I recently came across what I believe is the most undervalued cryptocurrency in the aforementioned list of five thousand. It’s lost in the rubble, buried beneath mounds of scamcoin. The organizers seem to be decent people, thus they haven’t hyped it. Rather, they’re working on the core technologies that actually make it valuable.

Put your long term “the world is always changing” hat on and let’s walk down this path together, because there’s (potentially?) $$$ to be made. First, let’s talk about YouTube.

A brief history of YouTube.

I love YouTube. I spend way too much time on YouTube. Recall it sold to Google in 2006 for $1.65 BILLION. Sounds like a lot, but that was actually a bargain because now YouTube makes Google more than $10 BILLION per year. Don’t you wish you had founded YouTube? Don’t fret, we can jump on the next train and make our $$$ that way. 🤑

You have to trust that all technology comes and goes. Blu-ray was supposed to be the ultimate way to watch movies; oops here comes Netflix. Taxis used to be a thing; oops, Uber. I used to carry around a 128MB USB flash drive; lol, that was cute.

I was so proud to own this. 😂

Back to YouTube. As hard as it is to imagine, YouTube will also die someday. It’s just the natural cycle of technology. Often the change can happen quickly; like hitting that tipping point when you’re leaning back in a chair too far. You don’t see it coming until too late.

But what could possibly kill YouTube? Let’s first look at where YouTube fails. I’ll highlight two points:

  1. It is ad-driven and ads are annoying. I’m so sick of hovering over that skip button AND I SWEAR IT IS MORE THAN 5 SECONDS!
  2. Profits go to Google’s (err, “Alphabet’s”) shareholders. That’s how corporations work. They optimize shareholder payout; that’s all they do. The YouTube creators only see a tiny fraction of the profits; just enough to keep them on the platform. Indeed, that’s the strategy too maximize payout for the shareholders.

Well, here comes technology! What technology can shake the boots of YouTube?

I cringe a little to say it, but here comes blockchain technology. (I cringe because blockchain is so over-hyped I often want to vomit. 🤮) Bare with me…

source: https://www.reddit.com/r/ProgrammerHumor/comments/89ze1y/slide_about_blockchains/

In 99.9999999% of the cases, blockchain is not what you need. There are very rare cases when blockchain is the solution to your problem. Those are cases when you (1) need a public ledger and (2) don’t trust any single organization to keep that ledger. Here are two of those rare cases:

  1. Blockchain is useful for digital currencies. That is, only if you want that currency to exist outside any single bank or government. Fun fact: even USD is mostly digital these days. That is, not every dollar is printed on paper; most dollars are just database records at a bank. But in a different world (think, the world of Bitcoin) where you don’t want to trust a bank, we can use a blockchain to decentralize the currency’s ledger and distribute it to all the users. Indeed the original Bitcoin paper (where the idea of a blockchain was first described) is about a cryptocurrency, and ONLY about a cryptocurrency. There is no talk of using blockchain tech for anything else.
  2. Blockchain is useful if you never-ever want to modify history (e.g. make censorship impossible). This is really the same idea, just worded differently¹. Again, if we choose not to trust any single organization, we can use a blockchain to record things (like videos) and ensure that they can never be deleted or modified. That is, we can live in a world where censorship is impossible. The issue with a central authority (like YouTube) is that they hold the power to rewrite history. Indeed, YouTube takes content down all the time! Most often for copyright infringement reasons, but also for general “we don’t agree with you” reasons. E.g. They’ve been taking down countless COVID-19 videos which they believe go against CDC recommendations. Even an interview with two certified medical doctors in California was recently taken down².

So, here’s the idea: If a blockchain-based service (1) could do sorta-kinda what YouTube does, like let you uploads your videos and comment on other peoples’ videos and stuff like that, and (2) didn’t have ads, and (3) sent 100% of profits to creators instead of shareholders… plus had the built-in advantages of blockchain that allow censorship-resilience… then… we’re onto something. 🤯

Well that’s what LBRY (pronounced “library”) is. At least, that’s its vision. Will they succeed in taking the top dog video hosting title away from YouTube? I think they have a good shot; time will tell.

Here is some early indication of their ultimate success:

  1. Many popular YouTube creators are already on LBRY. e.g. Veritasium, Khan Academy, 3Blue1Brown. (full list here) They’ve set up incentives for YouTuber creators to join, which has been (and will continue to be) very effective. YouTubers are flocking over and some are already reporting higher earnings-per-view on LBRY than on YouTube.
  2. Their viewer-base is booming. This is driven by the creators. Viewers will follow where the creators go, of course. LBRY released their user growth recently and it’s going gangbusters since January when they released lbry.tv! Here is their CEO talking about their recent growth (and other things).

LBRY, being a blockchain-based content distribution system, has a token that can be traded for fiat currencies (like $USD). They call one these tokens a “LBRY credit” (symbol: LBC). The idea is that content creators can be tipped in LBC, and also creators can optionally post paid content requiring a small payment in LBC in order to watch.

But, how to get rich?

Now, what you’ve all been waiting for. How can we get rich? It’s simple. If you believe the logic above, that LBRY has a fighting chance to contest YouTube, then you should buy up some “LBRY Credits” (symbol: LBC). Why is this a good idea? We’ll let’s go through the math below…

Full disclosure: I bought some LBC already so I have a vested interested in this. Also: This article is not financial advice. It is merely my personal opinion.

Anyway, how much is one LBC worth? Well, at the time of writing you can buy one LBC for about three cents ($0.03). Is that high or low? Good question. Let’s analyze this…

First, let’s compare the market capitalization of LBRY vs other cryptocurrencies. Head over to CoinMarketCap and let’s have a look.

What do we see? Well, Bitcoin is the top dog. (It always is.) It’s market cap is (at the time of writing) about $183 BILLION. Remember, it’s the “gold” of the crypto world, as they say.

What else do we see? Well, look at that first page of 100 cryptocurrencies. What do they offer. I’ll tell you… will great confidence… they mostly offer nothing. Yet people are excited about them for whatever reasons so they pour money in. Best example: Dogecoin. Currently at #30 on the list. This coin literally is a joke, named after the Shiba Inu meme. I repeat: this coin is LITERALLY a joke, yet its current market cap is about $330 MILLION. Wow… 🤦

So, as a simple hypothetical, let’s say all the goofballs who own Dogecoin right now decide to invest in a real solution to a real problem (like LBRY). That would inject (via this simple hypothetical) $330 MILLION into LBC’s market cap which means one LBC would cost $0.49. That’s a 15x return on your investment if you bought into LBC today. Now consider that Dogecoin owners are not the only ones who could “wake up” and move to LBRY, there are thousands of other coins out there which I believe don’t actually solve a real problem like LBRY does, so this is not a crazy hypothetical to me.

Okay, so, 15x in the simple example. But is that too bold? Are we dreaming too much? Here is a more cautions view: When YouTube sold to Google in 2006 for $1.65 BILLION, they had an estimated 50 million users. That means Google paid ~$33 per user. Let’s account for 2% inflation each year and say that would be $43 per user in today’s dollars. LBRY has ~2 millions users, so perhaps Google would value its service at about $86 MILLION. So let’s use that as the “should be” market cap for LBC which would put the price of one LBC at ~$0.13. If this price comes to fruition, that’s a 4x return if you invested today.

Dare we dream though? Okay, let’s DREAM!

If LBRY does contest YouTube’s dominance, it will catch wold-wide attention and not just the limited crypto-enthusiast-word’s attention. It will be on-par with the Bitcoin which caught world-wide attention as well (then lost it). Thus, it will easily crack the top-5 list of cryptos (if not higher). I mean, huge solution, and a situation where blockchain actually makes sense. It’s what the crypto world has been waiting for. If it cracks the top-5, it’s market cap will be ~$4.6 BILLION, making one LBC worth a whopping $6.89. That’s a 230x return if you bought in today.

There is also a good chance of rapid growth because once a sufficient number of YouTube creators (you know, those people we call “influencers”) get onboard, they will begin to advertise it! Talk about snowballing, I think we’ll see a very fast incline.

Lastly, if 230x return seems outrageous to you, know that it has happened before, a lot actually. It happens in Silicon Valley all the time. It’s happened in crypto a ton too (remember 2015–2017?).

So, this is my humble prediction of the where LBRY will go, based on its value proposition, and on historical cryptocurrency cycles. I’m personally hoping for a big return but only time will tell. I have no official association with LBRY besides being a user and a fan.

For fairness, LBRY is still young and has great room for improvement. Its search feature and recommendation engine are not strong, and the video playback lags sometimes. These are things they are working on though. Development is very active.

If you’re interested in getting some LBC, here’s how.

About the Author

I’m a computer scientist and machine learning researcher. I’m the author of the famous CRADLE app (News Article, Science Advances publication). I’ve worked as a Principal Data Scientist in healthcare (at a network of 9 hospitals in Texas). I’m also an entrepreneur and a founder of Master AI.

Footnotes:

[1] Both uses of blockchain are really the same thing. You don’t trust any single organization to keep records, so you distribute the records out to all users in a way that history cannot be rewritten. In the case of cryptocurrency, you don’t want history rewritten because if someone paid you, you don’t want them to come along later and rewrite history in a way that takes your money away. In the case of videos (or other general digital content) you don’t want history to be rewritten because you don’t want to allow censorship.

[2] The issue is not about whether the doctors are right or wrong (I, personally, think they are wrong, and so does the American College of Emergency Physicians). The issue is whether unpopular voices should be squelched from public discourse, or if we should allow freedom of speech on these topics.

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Twitter: https://twitter.com/acu192

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Ryan Henning

Ryan Henning

Twitter: https://twitter.com/acu192

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