Channels FAQ

Answers to some questions we often hear

Q: If I post my content on Channels, how much money can I make?

A: We don’t really know yet. It will depend on how much advertisers choose to spend in the network and how successful you are in competing with other producers for this “pot”. We have every reason to believe that it will be at least as much as can be made using any of the other publishing systems available today on the internet.

Q: As an advertiser, how do I know that users aren’t just gaming the system by clicking on my ads to make money?

A: The network will only put ads into a user’s feed if their balance is falling. The only way for a user’s balance to fall is to be buying content. So there is no way for a user to game the system. They may open your ad as a way to get your reward to purchase content, but you are able to target users that interest you and you need to do a good job of taking advantage of their attention when they open your card.

Q: As an advertiser offering rewards, couldn’t a user just follow me as a way to get access to all of my rewards?

A: No. The network does not pay rewards when the consumer is a follower of the producer. For a similar reason, rewards are not paid on cards found through a search. Rewards are only paid on cards that are added into your feed that you choose to open.

Q: As a consumer why don’t you let me make money directly on this network? It seems like you won’t let me earn more money than I spend on content. Why is that?

A: For the network to operate well, advertisers need to have confidence that they are getting real attention from consumers. Otherwise they will perceive a much lower value to this advertising and this will have a knock-on effect on producers, reducing their incentives. If your goal is to sell your attention to earn money, this isn’t the place for you.

Q: Why do you have to have advertising at all? I’d rather use a network with no advertising.

A: If producers are competing for virtually all of the advertising dollars spent, the quantity and quality of content will grow rapidly, benefiting everyone. But the same thing is true if some or all of the users choose to opt out of advertising and pay for the content they consume. We want to allow each user to make their own choice.

Q: If I don’t purchase coins, how many ads am I going to see in my feed?

A: Frankly, we just don’t know yet. It is going to depend on how advertisers bid for your attention — the ratio of “impression” fees versus “open” fees, and how often users open cards containing rewards. Our goal, of course, is that the amount of advertising should be small compared with the value you are getting from the content. Otherwise, the network won’t succeed. But we are trusting that by allowing advertisers to compete (through the bidding process), that consumers will win.

Q: Why do you use a “pricing level” instead of allowing producers to set a specific price for their cards?

A: We believe that pricing equilibrium is very important in this network to maintain stability in the amount of advertising that consumers are seeing. Producers do not have a good way to determine a fair market value for their content. We expect that etiquette will evolve where consumers will have certain expectations about the amount or quality of content based on the pricing level of a card. Producers who fail to set the appropriate level on their cards will be punished by users who stop following their content.

Q: What about bad behaviors such as cards that are “click bait”?

A: When a consumer opens a card and finds that it is content that they do not like, they can unfollow the producer and the price they paid for that card will be refunded. This simple mechanism defeats most bad behaviors from producers. We also plan to include a mechanism to report cards containing inappropriate content, using this to impose punishments when appropriate.

Q: As a producer, I’m going to be paid in ChannelCoin. How do I get “real money” out of it?

A: ChannelCoins are a cryptocurrency on the Ethereum blockchain. When you have a suitable balance, you can request to transfer your ChannelCoin into your own Ethereum account. From there you can use any conventional cryptocurrency exchange (such as Coinbase) to sell them for US dollars or any other currency.

Q: As an advertiser, I need a lot of coins to pay for my advertising. Do I have to buy these using in-app purchases?

A: No. You are free to make in-app purchases, however Apple charges a significant transaction fee. When you need a significant number of coins, you are better off buying ChannelCoin directly using a cryptocurrency exchange (such as Coinbase). You can then make a request to transfer those into your balance.

Q: What is the price of ChannelCoin?

A: Strictly speaking, ChannelCoin is a currency. So a more appropriate question is, “What is the exchange rate for ChannelCoin relative to the US dollar?” By design, ChannelCoin is “pegged” to the US dollar on a 1:1 basis. This means that as the demand for ChannelCoin rises, we will sell new coins to keep the exchange rate near 1:1. Likewise, if the demand subsides, we may buy back coins to support the exchange rate. This exchange rate stability helps keep “real world” pricing relatively stable for advertisers and avoids hoarding and speculative behaviors using this currency.

Q: If you sell ChannelCoin when demand rises, who gets that money?

A: That money is held in the Channels blockchain “smart contract”. You can think of this as the “central bank” for this currency. This money can be used to buy back currency when needed. If these currency reserves grow a lot, then the central bank can pay interest to currency holders as another tool to control the exchange rate.