Paid in Full

The emerging dream of an internet where every interaction is a financial transaction

Full-text audio version of this essay.

In a 2000 piece for Wired, John Perry Barlow celebrated the rise of Napster and peer-to-peer file sharing while ridiculing the entertainment industry’s effort to suppress those developments. “The conflict between the industrial age and the virtual age is now being fought in earnest,” he claimed, and the free proliferation of information was winning. Computers had made information infinitely reproducible by disconnecting it from physical media; he took this to mean that owning information had become obsolete. That had become a core principle of the internet: Information wants to be free, as another early internet visionary, Stewart Brand, famously proclaimed at a conference in 1984.

Barlow used a derogative term, set off in scare quotes, for whatever information remained vestigially proprietary: “content.” He declared that “art is a service, not a product,” and that “created beauty is a relationship, and a relationship with the Holy at that. Reducing such work to ‘content’ is like praying in swear words.” Soon enough, he assured readers, the internet would allow us to supersede the concept of “content” altogether.

“Free” content on centralizing platforms is monetized, but most of the money flows directly from advertisers to the platforms themselves. Social media decoupled fame and fortune

Twenty years later, the opposite has happened: Everything is content. We all “pray in swear words,” to borrow Barlow’s phrase, and emerging forms of art are conspicuously products, characterized by their sale prices and ownership status as much as aesthetic merit. Free or not, content is still a commodity, inherently shaped by the platforms that circulate it and responsive to their incentives, monetary or otherwise. Rather than overthrowing the corporate entertainment industry, the internet has led us to internalize that industry’s logic, precipitating what is often called the “creator economy.” A host of intermediaries providing payment management systems, distribution infrastructure, marketing support, and systematized artificial scarcity are emerging to help individuals commodify and monetize more of their online presence. Intellectual property hasn’t faded away; instead it has become even more embedded in the fabric of the internet.

This is not what Barlow predicted. “For ideas, fame is fortune,” he wrote. “And nothing makes you famous faster than an audience willing to distribute your work for free.” That logic — that ever-larger quantities of followers, likes, and clicks could eventually be cashed in — held at first for the “participatory web” (so-called Web 2.0) but its very hegemony has led more users to prefer compensation in the form of money rather than attention. These users could see that the “free” content on centralizing platforms like Facebook and YouTube was in fact monetized, but that most of the money flowed directly from advertisers to the platforms themselves, largely bypassing the creators. Facebook and Google monopolized the advertising market, moreover, undermining independent creators’ ability to gain traffic and earn ad revenue of their own. In effect, contrary to Barlow’s pronouncement, social media decoupled fame and fortune.

To make a satisfactory living, creators would need concrete ways to turn attention into revenue, to make their output function more like intellectual property. If the internet was once mainly understood as encouraging the free flow of information (which in practice resulted in platform monopolies), the new creator economy would invent ways to impose scarcity on the seemingly endless digital bounty that users had helped create, thus enabling those users to get paid. The creator economy would seize upon the content-circulating infrastructure built and refined during the Web 2.0 era and repurpose it for individualized monetization. While it’s widely remembered that Brand said information wants to be free, he preceded that by saying that it wants to be expensive.

Among the pillars of the creator economy is Patreon, a service that individuals with blogs or podcasts can use to administer subscriber paywalls and raise money from their audiences. Musician Jack Conte founded the company in 2013 after watching his YouTube ad revenue dwindle despite his massive audience. According to a 2019 Wired profile, Conte felt a “growing fury at the pittance” that YouTube paid. “In one 28-day period, during which his account generated 1,062,569 views, he received a measly $166.10 payout.”

Other platforms, including Twitch, Substack, and OnlyFans, have emerged as similar alternatives to big social media and the meager earning potential it offers. The rise of these alternative forms of monetization has pushed the centralized web to modify its own incentive structures. When, earlier this year, Twitter announced its Super Follow feature — a paywall for tweets — it represented the latest acknowledgement by a social network that Web 2.0 was over: If the platforms themselves did not provide adequate monetization tools, users would generate their content elsewhere.

Such features, Will Oremus argues, signal a departure from social media’s established model of holding users’ attention with algorithmically sorted feeds: “Users will deliberately choose to forge ongoing connections with their favorite creators rather than simply trusting an algorithm to surface engaging free content from a vast, impersonal reservoir.” This points to social media just becoming mass media again; instead of everyone making content for one another, an elite group of “creators” produce it for the mass of “users.” Of course, the creators who already amassed large followings during the “free” era of social media are best positioned to benefit from subscription platforms, paywalls, and collectible content, and they will continue to draw upon feed-powered social media to promote themselves and attract their paying customers. Those without followings, meanwhile, will have a harder time monetizing their output. The creator economy’s highly visible success stories conceal a huge population of users who cannot make a living from selling subscriptions any more than they could from YouTube ad money. In a 2018 piece for the Verge, Patricia Hernandez described the Twitch streamers who spend months or years broadcasting without an audience: “Many streamers actually remember the exact moment their view counter went from zero to one.”

For every high-profile streamer earning millions, there are many others earning nothing; subscription services and Super Follows are unlikely to change this. But in the meantime, we’ll have normalized an internet where everything is increasingly for sale and content must embed its own marketing within itself, in order to maximize its financial return. That is, we will have the world of NFTs.

NFTs are among the most visible manifestations of what’s being called Web3, a transformation of the backend architecture of the internet in response to Web 2.0’s limitations and asymmetries. Its vision is a blockchain-based internet that works less like an open network circulating “free information” and more like an expansive matrix of built-in ownership and payment infrastructure.

As with Web 2.0, third-party applications will mediate most Web3 activity for ordinary users. These decentralized apps will not necessarily look and feel altogether different than traditional web apps but will likely incorporate functionality that blockchain technology specifically facilitates, allowing mechanisms like crowdfunding to be incorporated directly into works themselves. Interactions will become transactions, and more types of information will likely be traded in NFT-like marketplaces. As such transactions become more fundamental to the web, users will have to hold cryptocurrency in digital wallets to pay as they go.

The more decentralized apps of Web3 will not necessarily look and feel different but will allow mechanisms like crowdfunding to be incorporated directly into works themselves. Interactions will become transactions

Web3 replaces one starry-eyed vision of the internet with something seemingly more pragmatic, where creators are directly compensated for content they produce while users are never allowed to forget the true cost of information circulation. Web 2.0 has already demonstrated that information can’t be free; it can only be subsidized, most likely by entities with deep pockets and nefarious interests. Its “open network” largely consists of centralized servers owned by major corporations whose dominance grows with each passing year. Yes, the internet has generally been free for users, but ethereal metaphors like “the cloud” have concealed its increasingly proprietary nature, its ongoing consolidation into a few monopolies. That centralization has proceeded in tandem for the internet’s back-end hosting, which is increasingly handled by Amazon Web Services along with Microsoft and Google, just as much of the front end is handled by Google and Facebook. In the face of these giants, individual efforts to monetize content without their involvement can seem absurd: one’s own personal webpage vs. a billion-user site.

But with blockchains and built-in transactionality, the picture would presumably look different. Web3 is decentralized and inherently monetized at its core through tokenization: Users who contribute computing resources to the collective, peer-to-peer effort of storing the internet’s data and validating that data’s transfer (replacing the centralized servers that currently predominate) receive compensation in the form of bitcoin or another cryptocurrency. In her 2020 book The Token Economy, Shermin Voshmgir writes that blockchain “introduces a governance layer that runs on top of the current internet, that allows for two people who do not know or trust each other to reach and settle agreements over the web.” In other words, Web3 makes the internet’s traditional intermediaries — the centralized corporate platforms — less essential to its ongoing existence, both as providers of its backend capacity and as subsidizers of its content via ad revenue. The social platforms’ role as distribution channels might endure, but their overall importance to the web will have diminished. In a sense, technologist Jaron Lanier’s old idea of an internet based on micropayments has finally arrived, but it has been transformed into an internet of micro-ownership.

Web 2.0’s incentives emphasized quantity — more posts, more content, more engagement, more followers. Everything was free so that users would consume more of it and sink more of their attention into platforms, which had every incentive to increase information’s fluidity (more data should be collected, more information digitized and uploaded, more users should generate more content, etc.). This put them at cross-purposes with the creators whose content they depended on, who have come to see that their best path to earning money under those conditions is by restricting access to their content than letting it circulate freely. But as Web3 matures, creators will eventually be able to do away with Web 2.0’s legacy approaches to monetization and give their audiences the ability to directly invest and even speculate in content, purchasing tokens that correspond to specific images, texts, or relationships with creators and communities, while that content continues to circulate as widely as it could in Web 2.0. Instead of paywalls, NFTs.

In a sense, an old idea of an internet based on micropayments has finally arrived, but transformed into an internet of micro-ownership

The apparent novelty of NFTs lies in their model of ownership, which preserves one facet of exclusivity — a single individual possesses a discrete digital object — without restricting that object’s ability to be widely shared and copied. That is, NFTs attempt to preserve fluidity and scarcity simultaneously. This makes them a potentially more elegant solution for monetization than paywalls. “It’s a new model of interdependence for digital creators,” Rea McNamara writes in Hyperallergic, “in which the attention economics set by monopolizing big tech structures can be flipped into dynamic monetizable forms or enable fractional ownership.”

Theoretically, NFTs promise to allow creators to extract value from virality as well as exclusivity, as ownership of a given NFT stands to become more lucrative when the underlying content gains wider distribution. The Sisyphean copyright-enforcement efforts that Barlow criticized in 2000 are made irrelevant, since NFT ownership is non-exclusive in certain respects: An NFT’s value lies not in limiting and charging for its use but mainly in its speculative value as a trophy. It is not surprising, then, that speculative mania has engulfed NFTs — “(crypto) money chasing more (crypto) money,” as Kenny Schachter writes.

The end state of the creator economy, it appears, is the seamless convergence of content, money, and personal branding, with NFTs increasingly optimized for shareability to maximize their monetary value. As Dean Kissick notes, “artworks have begun to look more like memes, while memes have begun to look more like artworks.” Not only memes but individuals’ identities can become speculative assets via platforms like Clout Market and BitClout, which allow creators to mint themselves as NFTs. BitClout’s founder, who goes by the moniker Diamondhands, offers this description: “The core insight behind BitClout is that if you can mix speculation and content together, you can not only get a 10x product that creates innovative ways for creators to monetize, but you also get a new business model that’s not ad-driven anymore.” The union of speculation and content, far from an accidental byproduct, is the deliberate objective. Speculation is the content.

While “free” digital content had only use value (because its exchange value was effectively zero), NFTs are in danger of having only exchange value, with their meaning utterly subsumed by it. (The most significant quality of the best-known NFTs is their auction price.) This complicates the utopian promise of NFTs — that artists will get paid more without the kinds of tradeoffs that Web 2.0 often required, that the art will maintain its integrity in the face of its medium’s powerful incentives, and that NFTs might somehow avoid becoming mere “content.” Despite their technical non-fungibility, these works must succeed within systems that constantly demand greater fungibility and ease of circulation. Speculative “scarcity,” reframed as patronage, does not automatically make the relations between creators and fans stronger; it is just as likely to alienate those relations further.

If one of the problems with Web 2.0 was that it demanded constant overproduction, the speculative tendency of NFTs does little to correct that, instead encouraging creators and patrons alike to place more bets. As the GameStop short squeeze earlier this year demonstrated, speculation and exchange value can be their own form of entertainment. Watching numbers go up is fun — more so when one has a stake in them. Social media is already a scoreboard of likes and shares; speculation via tokenization ratchets this to the next level. This type of entertainment — spectacles of quantity — obviates the need for spectacles of quality, which lack the power of a direct personal appeal to one’s pocket. It’s not just that information wants to be expensive, then; it appears we want it to be expensive too.

Drew Austin writes about technology and urbanism on the blog Kneeling Bus.