Blockchain is like a laboratory for incentives. It gives us a flexible framework to experiment with new economic models at a rapid pace, and this powerful feature of the blockchain makes it the ideal platform for many disruptions. An industry would typically take years to evolve its incentive models, but a new token economy can emerge within a matter of a few months.
Livepeer is one of these experiments. The goal of the Livepeer protocol is to create incentive alignment between a video broadcaster and a video service provider, so the best strategy to maximize profit for a video service provider is to provide cheap and high-quality broadcasting service. We do this by using an open market with a token that rewards good work done by the service providers, and removing the incentives for hostile mechanisms like vendor lock-in or non-transparant pricing. This protocol is the basis of the Livepeer decentralized video transcoding network, and anyone can join the network to earn Livepeer token by running Livepeer transcoding nodes.
A decentralized video transcoding network is necessary for a decentralized video tech stack, but since Doug and I started working on Livepeer, we knew an entirely decentralized video solution will need decentralized projects in many layers of the stack — layers like storage, content delivery, rights management and content monetization. For the past year, it has been very exciting to collaborate with many teams to make decentralized video a reality. It has also been very exciting to work with new teams on different approaches to solve existing problems caused by centralization.
One of the new teams I’m excited about is the Stream Token team. Stream Token is a new project in the monetization layer, aiming to re-align the incentives for online video creators and applications. Due to the centralization of large social applications, content creators are often left at the mercy of large web applications, having little control in how the content is monetized. With Stream Token, creators can be paid directly based on the value they bring to the network. It creates a new economy that’s more transparent and more decentralized.
Stream Token is a great example of a token economy experiment. It would take the existing online video industry years to evolve toward a peer-to-peer economy with a baked in micro-payment system that also preserves anonymity. But Stream Token can create an application with an ERC20 token for a fraction of that time. They can also rapidly tweak the payout mechanism and change the incentives design as they learn more from user interaction with the product. Instead of relying on ads and being tied to the rigid operations requirement that comes with it, they have a sandbox for different peer-to-peer business models that includes advertising and way more.
At launch, Stream will be a Chrome extension that becomes active on pages with Stream videos. This is a sensible approach so that content creators will have a smooth on-boarding experience, but the goal for the project is to completely remove the middle man and move to a fully decentralized service. This makes Stream Token an ideal user for the Livepeer decentralized video transcoding network. I am excited to be a technical advisor and help the Stream Token team build toward a fully decentralized video application.
