I want to break down in specific the points within the “A crypto-trader’s diary — week 12; Oyster coin” by David Gilbertson under the section of “Oyster vs. the competition.” I don’t want to go into detail about prior representations of the author of Oyster (e.g. the graphic), but concentrate on the concerns.
The breakdown of the assumptions and claims:
This time, it’s advertising that broke, and they go on to say that “Advertisements have always been a fundamentally weak proposition.”
Stating that ads are broken is a reasonable comment. The author is describing the whole issue end users have with ads based on the increasing number of people using Adblock today which is rising to a level of 30% in the USA alone:
On the other hand, intrusive ads suck. Flashing ads are annoying. Too many ads slow a website down, they use up bandwidth, they drain battery, and they can mess up an otherwise excellent design.
This is precisely the problem that Oyster is trying to solve. To make something clear, Oyster doesn’t have to replace ads altogether, but it can become an alternative. By freeing publishers from the need to worry about ad traffic monetization and using clickbait attention-grabbing headlines. Content can be geared towards subjects of substance with less emphasis.
Oyster could offer an alternative revenue stream for quality news sites as an example.
Using Coinmarketcap which is in the top 300 website sites globally is not the target of Oyster Protocol in its first iteration based on content type alone.
And for the record, I use an ad-blocker just like any sane person.
To show everybody the extent of ad-blockers within the userbase and how they are growing over time:
https://www.businessinsider.de/pagefair-2017-ad-blocking-report-2017-1?r=US&IR=T
It’s not stopping there either. An increasing number of people are implementing ad-blockers within their web browser. Just like you, many other users that are annoyed by ads and affected by the way they are presented to them.
If ads were a pleasant and less brash experience to the user, the motivation of web users to implement adblockers would we smaller. The problem for websites owners’ monetization isn’t becoming better, but worse as a result.
The premise of Oyster saying “Ads are broken” is a mirror of more and more web-users installing adblockers and not just an empty phrase.
But I think Oyster talking down the advertising revenue model smells like an effort to get the general public excited in their offering (“Do you hate ads? We hate ads too, and we’re going to fix that! Check out our new cryptocurrency”).
Yes, obviously. Most people hate ads. Nonetheless, it’s a problem we are solving, so it shouldn’t be wrong to present it that way.
To claim that it’s kind of shameless in a way by Oyster trying to attract a target audience with this “advertising slogan” would be like arguing that it was reprehensible for food chains to advertise specifically to hungry people or sportswear companies to advertise to athletes. We are trying to solve the ad problem in the web culture, so it shouldn’t be penalized as reprobate.
Everyone has a choice including website publishers, mobile app developers, and end users.
Ads are not going to go away overnight, and they will never be gone completely; yet, ads will still be annoying. If no one is offering an alternative revenue stream that offers equivocal dollar rates then what options do website owners have? Oyster paves the way for new natural selection away from ads, which can cause a more pleasant experience for the end-user.
Can I make as much money from Oyster as I can from ads?
Ideally yes, but it’s not for everyone. It’s up to webmasters to offer a choice based on the demand, represented by their audience. To give you an example of a possible solution: You could provide different options to the user to choose from: ads, a subscription model or Oyster. You could even evaluate the collected data of those choices and act accordingly, redesigning your website to your audience’s needs. Oyster,
like a hammer, is a tool in the end. How you use it and how hard you swing the hammer is up to you.
Everything that follows within that article downwards from here is a numbers game I want to break down into some semblance of realism.
(to reiterate my point from before still stands that Oyster doesn’t have to replace ads completely. It is a choice.)
Let’s reiterate Coinmarketcap is one of the most prominent websites in the world, in fact in the Top 300 to be precise.
and is not directly our target site with the first iteration of the Oyster Protocol.
It’s not one “little” website like it’s presented here. But either way, the numbers given by the author are not based on reality.
I’ll assume that they make about $2.50 per 1,000 visitors in ad revenue — a rough guess. At this rate, they’ll need 40 million visitors a month to make their budget, which is suspiciously close to this estimate.
This is already an overstated assumption.
Here’s an example of a more reliable source for web traffic: semrush.com
https://www.semrush.com/analytics/traffic/overview/coinmarketcap.com
Based on that data given by semrush — let’s break down how logical and realistic the numbers the author came up with are:
For this example, within May 2018 CoinMarketCap had a total amount of unique visitors of about 7.4 million.
(To give a comparison: This number should have been achieved within less than seven days based on the data of “siteworthtraffic”).
The assumption of CMC earning $2.50 per CPM is, therefore “greatly” overestimated. Most sites with this amount of traffic get nowhere near that kind of CPM rate based on content type, bounce rate, dwell time, sell-through rate, bot traffic, and many other factors.
If an advertiser were to pay $2.50 CPM for CMC, it is highly likely that the website publishers will get more than 35% cut of that Ad revenue, because of Ad Exchange fees.
With Oyster, all the middlemen between the advertiser and the actual website publisher are removed. It’s a direct economic relationship, without any intermediate parties taking their cut — the money flows directly to the content creator or publisher.
Furthermore, there are some wrong assumptions in the data storage calculations and some math that doesn’t make sense, no matter how I turn the numbers. I don’t see how this added up on the paper by the author.
(FYI the Oyster price fluctuates slightly — it’s currently 1 PRL for 64 GB for one year, or 1.3 PRL for 1 TB for one month, which is $5.92 today — but I’m going to say $4).
Starting on this point: I don’t understand how the author comes to the math of 1.3 PRL equal 1000 GB of data for one month(?) — I would be grateful if somebody could explain this equation to me because I do not understand it.
50 petabytes! That’s a tonne of storage that must be utilized to fund one little website.
Let’s again state that CMC is not a “little” website, but that 50 petabytes of data isn’t that much compared to the global market today, not even speaking of the future.
A report of Cisco is presenting data on the global data center storage capacities and their distribution among different sectors (e.g., Video streaming, DataBase/Analytics/IoT, etc.). In 2018 alone this is 1,500,000 exabytes of data. If we believe Oyster would take 1%, so 15,000 PB of cloud data, Oyster would already be able to sustain $30M, based on the author’s calculation. Since the estimates are based on far overestimated data, this would mean that’s way more website publishers who could earn revenue with Oyster — without any middlemen taking out their share.
Cisco’s forecast for 2021 is about 2.6 zettabytes of data. Utilizing the IOTA tangle, even your IoT-connected fridge could hold a share of the data uploaded with Oyster one day in the future– ultimately being scalable throughout the whole IoT backbone.
The forecast is predicting that the fastest growing sectors will be social media streaming, which Oyster is already concentrating on today, even in its early stage, by implementing the Oyster streamable lib — completely decentralized, completely anonymous media/data streaming is viable.
So even if the calculations of the author for a single “large” website has been significantly overestimated — The Oyster Protocol is designed to accept that challenge, will face it and emerge victoriously.
“Data is stored on the Tangle in ~1 KB parts within the transaction payload”, and according to IOTA, each transaction requires proof-of-work for about 30 seconds. 30 seconds for each kilobyte?
These speeds are not the end of goal of IOTA, they are what has been achieved today and will undoubtedly scale over time with the development of Hercules and Swarm as an example.
We aren’t concentrating our project on the current IOTA tangle at this stage in its development, but on what It is aiming to become over time.
In the future, these limitations will be exceeded as it becomes faster with more transactions, due to the nature that each new transaction confirms two prior transactions, instead of it being held back as it is today. Either way, we already lifted ourselves from the current limitations of the IOTA tangle, by introducing our own forked (Oyster) tangle with adjusted measurements (like, e.g., the MWM you mentioned). Additionally, we are also invited to the closed alpha of carrIOTA’s Hercules, which will potentially help the upload speed a lot as well.
(Particularly with the transactions/proof-of-work. I’m guessing there must be more than 1 KB per transaction or multiple transactions in a bundle and it’s the bundle that requires the 30 seconds of PoW, or that the PoW time can be reduced (a private tangle with a low MWM?). Otherwise even the test scenarios that save a mere 5 MB would be having problems.)
As mentioned, we are already using our own tangle until IOTA’s tangle is ready for Oyster. Funny you are mentioning 5MB — Feel free to use the current MVP mainnet beta on https://oysterstorage.com/ — currently it’s free but limited to 5MB per upload. See what upload and download speed you can achieve. It doesn’t take ~40 hours like it would under the assumption that 1KB takes 30 seconds. But see for yourself — and that’s only the beginning. Downloads are already near to usual file-hosting standards.
And there is one last doubt I have. Let’s say coinmarketcap.com decide to try out Oyster. And they do. And it’s a success. What’s their motivation to remove their ads?
The motivation is determined by the website owner himself. As stated above already, more and more people are and will use adblockers — leading to less and less revenue through ads. Also, they don’t have to “remove their ads” entirely — nobody is forcing them in the first place. But one website’s goal is to make an improved web experience for their end-user, which leads to more users in the long-run, so overall more revenue. Since this is a free market and competition is always a threat. Sites don’t want to lose their customers to competitors. You already showed it yourself as there are alternatives to CMC, like, e.g., Live Coin Watch.
So, PRLs aren’t the multi-year investment choice; what I’m interested in is the new (like, have only existed for a few weeks) Oyster Shells (SHL).
Oyster SHL uses the same web node topology as Oyster PRL — they are both using and working on the same network. In addition — Once Oyster SHL’s development has started SHL will be utilized for Dapps on the Oyster meshnet, then websites will receive not only PRL, but also SHL as well — giving the whole revenue stream another aspect. Whereas PRL alone cannot fulfill the task of making ads less intrusive and being an alternative revenue stream to the website owner, SHL as an addition will round out the whole model.
It is worth adding that this technology is entirely new, it has never been done before and, similar to IOTA, holds significant promise for the future. Within five months we have launched a minimum viable product that can upload data to the tangle. The job now for the team is to scale both the data storage side capacity and offer equivocal CPM rates for website owners. This is a balance over time and not something that can be accomplished overnight. If you review how a company grows over time, it is typically from a small base see how Dropbox has been around for 11 years before it did its IPO and check out its monthly users here: https://en.wikipedia.org/wiki/Timeline_of_Dropbox.