How Decentralized Networks Can Pose the Biggest Threat to Big Tech

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Exponents of the creator economy believe Facebook, Google, and TikTok have sown the seeds of their own downfall. What’s more, their reversal of fortune has already begun in 2022, the start of a sea change in online behavior that will see the workers finally rise to the top.

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There are only a few vocal enthusiasts for the “creator economy” like Li Jin, co-founder at Variant Fund and founder of Atelier Ventures.

“Imagine a world in which Facebook is owned and operated by its users,” prompts Jin in an op-ed for The Economist. According to her, it isn’t hard to do. “The next step is for creators to build, operate and own the products and platforms they rely on.”

Jin says the cultural impact a creator has is already surpassing that of traditional media. She cites Ryan’s World, a YouTube channel for children that creates “unboxing” videos of toys, which “has over 30 million subscribers, and its most popular video has had more than two billion views.” To show a contrast, fewer than a million people watch CNN in prime time.

What she terms as “the stark imbalance of power between proprietary platforms and the creators who use them” is on the verge of being upended, finally freeing workers from the tyranny of capitalist monopoly.

“Despite directly contributing to the value of platforms by uploading content that engages users, creators resemble an underclass of workers, lacking the benefits and protections of employees or the share options that would let them benefit from platforms’ success.

“Historically, advances in workers’ rights were driven by collective bargaining through unions,” she continues. The most effective means for today’s creative workers to gain greater reward for their efforts is by taking control of the platform itself. Not Meta, but new platforms built on co-operative ownership. Examples include Stocksy, a stock photography library that shares profits between its members, who also vote on Stocksy’s policies.

What gives this utopian idea legs is the simultaneous advance of new technologies, principally the decentralized networks, like those that underpin cryptocurrencies. This allows ownership to be distributed via tokens that are earned for contributions to the network and often confer governance rights.

“It may sound futuristic and abstract, but it is already happening,” says Jin. She references Axie Infinity, a pet-battle game in which users earn tokens they can sell and convert into income, that now has 1.7 million daily users who have traded more than $2 billion-worth of game assets. Another example is SuperRare, a digital-art marketplace which also gives users a say in the platform’s future via digital tokens.

“In 2022 new, decentralized networks serving the creator economy will reach a tipping-point. The democratization of wealth-building assets through token distribution is an appealing prospect,” Jin writes. “For innovators, rewarding users with ownership can help attract the enormous user bases that will enable these new platforms to outcompete existing, centralized ones.”

According to Jin, “creator ownership eliminates the conflict between platforms and participants and ensures that growth benefits all stakeholders.” Starting in 2022, she predicts more content creators “will realize and harness their power, leading to the birth of a new set of platforms that confer ownership and control — and treat creators as first-class citizens.”

It’s not as if Meta, Google, Snapchat, or others are blind to this potential undermining of their own business model. It will be interesting to see how they respond. Potentially, they’ll begin buying decentralized platforms, altering their terms and conditions, or even offering tokenized ownership.