NFTs?

NFTs (Non-fungible tokens) are the newest rage in blockchain development. These tokens are issued by the creators of digital assets and then registered on the Ethereum blockchain. The smart contracts associated with the tokens can award ownership rights to the asset with the rights to royalty payments for the marketing or sale of the asset. NFTs seem particularly suited to collectors’ items and can also be applied to physical assets. The sale of the tokens prepays the creator for the value created through his creation. Preselling NFTs for songs could deliver a revenue flow to musicians before the music became a commercial hit. Think of having a digital right of ownership to Happy Birthday or Yesterday or The Mona Lisa. The problem, of course, is that predicting the future value of a creative piece of art today is almost impossible. Remember, Van Gogh couldn’t sell any of his paintings!

This makes NFTs a very speculative asset play.

Click below to view the idea of an NFT art gallery:

The Gallery NFT

How To Fix Social Media (Facebook!)

How to Fix Social Media.

The Wall Street Journal has published a series of articles they call The Facebook Files. One article recently queried a dozen “experts” to discuss their ideas of how to fix social media. We at tuka have been focused on this challenge from the beginning, several years ago, and what these commentators reveal is a converging consensus that the problem with social media is scale and emotional triggering based on the speed of information flow. As Winston Churchill was said to quip, “A lie gets halfway around the world before the truth has a chance to get its pants on.” Social media connections have just made this pathology worse.

Our take has always been summed up with one line: A global gossip network makes no sense. So large, centralized networks of 3 billion users make no sense (i.e, FB). Social networking is person-to-person sharing based on mutual trust. So smaller newworks focused on shared interests make sense. This is what tuka is. Technology can then be harnessed to coordinate these networks in ways that reduce the siloing effect so we can all end up sharing more information based on our trusted networks. So what is needed are policies that break down the network effects of scale to open up the social media space to thousands of competitors, all focused on different community interests. Then the interactions across networks help bring us together willingly.

The other problem we at tuka have cited is the centralization and control of information networks and the immense value they create. Data is gold, and we cannot have a handful of private companies own and control the personal data users create. This is akin to giving your labor away, or slavery. The required changes are to decentralize the network using blockchain technologies so that value created can be measured and distributed accordingly to users.

Several of the experts have accurately recognized the problem and what to do about it. The better ideas have been cut and pasted below.

….

Clay Shirky: Slow It Down and Make It Smaller

We know how to fix social media. We’ve always known. We were complaining about it when it got worse, so we remember what it was like when it was better. We need to make it smaller and slow it down.

The spread of social media vastly increased how many people any of us can reach with a single photo, video or bit of writing. When we look at who people connect to on social networks—mostly friends, unsurprisingly—the scale of immediate connections seems manageable. But the imperative to turn individual offerings, mostly shared with friends, into viral sensations creates an incentive for social media platforms, and especially Facebook, to amplify bits of content well beyond any friend group.

We’re all potential celebrities now, where anything we say could spread well beyond the group we said it to, an effect that the social media scholar Danah Boyd has called “context collapse.” And once we’re all potential celebrities, some people will respond to the incentives to reach that audience—hot takes, dangerous stunts, fake news, miracle cures, the whole panoply of lies and grift we now behold.

The faster content moves, the likelier it is to be borne on the winds of emotional reaction.

The inhuman scale at which the internet assembles audiences for casually produced material is made worse by the rising speed of viral content. As the behavioral economist Daniel Kahneman observed, human thinking comes in two flavors: fast and slow. Emotions are fast, and deliberation is slow.

The obvious corollary is that the faster content moves, the likelier it is to be borne on the winds of emotional reaction, with any deliberation coming after it has spread, if at all. The spread of smartphones and push notifications has created a whole ecosystem of URGENT! messages, things we are exhorted to amplify by passing them along: Like if you agree, share if you very much agree.

Social media is better, for individuals and for the social fabric, if the groups it assembles are smaller, and if the speed at which content moves through it is slower. Some of this is already happening, as people vote with their feet (well, fingers) to join various group chats, whether via SMS, Slack or Discord.

We know that scale and speed make people crazy. We’ve known this since before the web was invented. Users are increasingly aware that our largest social media platforms are harmful and that their addictive nature makes some sort of coordinated action imperative.

It’s just not clear where that action might come from. Self-regulation is ineffective, and the political arena is too polarized to agree on any such restrictions. There are only two remaining scenarios: regulation from the executive branch or a continuation of the status quo, with only minor changes. Neither of those responses is ideal, but given that even a global pandemic does not seem to have galvanized bipartisanship, it’s hard to see any other set of practical options.

Mr. Shirky is Vice Provost for Educational Technologies at New York University and the author of “Cognitive Surplus: Creativity and Generosity in a Connected Age.”

….

Jaron Lanier: Topple the New Gods of Data

When we speak of social media, what are we talking about? Is it the broad idea of people connecting over the internet, keeping track of old friends, or sharing funny videos? Or is it the business model that has come to dominate those activities, as implemented by Facebook and a few other companies?

Tech companies have dominated the definition because of the phenomenon known as network effects: The more connected a system is, the more likely it is to produce winner-take-all outcomes. Facebook took all.

The domination is so great that we forget alternatives are possible. There is a wonderful new generation of researchers and critics concerned with problems like damage to teen girls and incitement of racist violence, and their work is indispensable. If all we had to talk about was the more general idea of possible forms of social media, then their work would be what’s needed to improve things.

Unfortunately, what we need to talk about is the dominant business model. This model spews out horrible incentives to make people meaner and crazier. Incentives run the world more than laws, regulations, critiques, or the ideas of researchers.

The current incentives are to “engage” people as much as possible, which means triggering the “lizard brain” and fight-or-flight responses. People have always been a little paranoid, xenophobic, racist, neurotically vain, irritable, selfish, and afraid. And yet putting people under the influence of engagement algorithms has managed to bring out even more of the worst of us.

The current incentives are to ‘engage’ people as much as possible, which means triggering the ‘lizard brain.’

Can we survive being under the ambient influence of behavior modification algorithms that make us stupider?

The business model that makes life worse is based on a particular ideology. This ideology holds that humans as we know ourselves are being replaced by something better that will be brought about by tech companies. Either we’ll become part of a giant collective organism run through algorithms, or artificial intelligence will soon be able to do most jobs, including running society, better than people. The overwhelming imperative is to create something like a universally Facebook-connected society or a giant artificial intelligence.

These “new gods” run on data, so as much data as possible must be gathered, and getting in the middle of human interactions is how you gather that data. If the process makes people crazy, that’s an acceptable price to pay.

The business model, not the algorithms, is also why people have to fear being put out of work by technology. If people were paid fairly for their contributions to algorithms and robots, then more tech would mean more jobs, but the ideology demands that people accept a creeping feeling of human obsolescence. After all, if data coming from people were valued, then it might seem like the big computation gods, like AI, were really just collaborations of people instead of new life forms. That would be a devastating blow to the tech ideology.

Facebook now proposes to change its name and to primarily pursue the “metaverse” instead of “social media,” but the only changes that fundamentally matter are in the business model, ideology, and resulting incentives.

Mr. Lanier is a computer scientist and the author, most recently, of “Ten Arguments for Deleting Your Social Media Accounts Right Now.”

Clive Thompson: Online Communities That Actually Work

Are there any digital communities that aren’t plagued by trolling, posturing and terrible behavior? Sure there are. In fact, there are quite a lot of online hubs where strangers talk all day long in a very civil fashion. But these aren’t the sites that we typically think of as social media, like Twitter, Facebook or YouTube. No, I’m thinking of the countless discussion boards and Discord servers devoted to hobbies or passions like fly fishing, cuisine, art, long-distance cycling or niche videogames.

I visit places like this pretty often in reporting on how people use digital tools, and whenever I check one out, I’m often struck by how un-toxic they are. These days, we wonder a lot about why social networks go bad. But it’s equally illuminating to ask about the ones that work well. These communities share one characteristic: They’re small. Generally they have only a few hundred members, or maybe a couple thousand if they’re really popular.

And smallness makes all the difference. First, these groups have a sense of cohesion. The members have joined specifically to talk to people with whom they share an enthusiasm. That creates a type of social glue, a context and a mutual respect that can’t exist on a highly public site like Twitter, where anyone can crash any public conversation.

Smallness makes all the difference. These groups have a sense of cohesion.

Even more important, small groups typically have people who work to keep interactions civil. Sometimes this will be the forum organizer or an active, long-term participant. They’ll greet newcomers to make them feel welcome, draw out quiet people and defuse conflict when they see it emerge. Sometimes they’ll ban serious trolls. But what’s crucial is that these key members model good behavior, illustrating by example the community’s best standards. The internet thinkers Heather Gold, Kevin Marks and Deb Schultz put a name to this: “tummeling,” after the Yiddish “tummeler,” who keeps a party going.

None of these positive elements can exist in a massive, public social network, where millions of people can barge into each other’s spaces—as they do on Twitter, Facebook, and YouTube. The single biggest problem facing social media is that our dominant networks are obsessed with scale. They want to utterly dominate their fields, so they can kill or absorb rivals and have the ad dollars to themselves. But scale breaks social relations.

Is there any way to mitigate this problem? I’ve never heard of any simple solution. Strong antitrust enforcement for the big networks would be useful, to encourage a greater array of rivals that truly compete with one another. But this likely wouldn’t fully solve the problem of scale, since many users crave scale too. Lusting after massive, global audiences, they will flock to whichever site offers the hugest. Many of the proposed remedies for social media, like increased moderation or modifications to legal liability, might help, but all leave intact the biggest problem of all: Bigness itself.

Mr. Thompson is a journalist who covers science and technology. He is the author, most recently, of “Coders: The Making of a New Tribe and the Remaking of the World.”

Does Facebook Really Make Sense?

An essay on social networks and regulation, published by Project Syndicate.

A Facelift for Facebook

One can agree with the explanation of the problem – centralized control of an increasingly valuable asset: information data. I’m not sure a real solution has been proposed yet. When I explain how platforms exploit the collection of users’ personal data for great material gain, I usually get a shoulder shrug. People still fail to appreciate that their data is as valuable as their labor, if not more so. They would not give away their labor for free, so why give away one’s valuable data for a free user page and some simple tools?

At a macro level, a social network like FB makes almost no sense, except as a data mining tool. FB thrives on little more than gossip networks and if one looks at the function of social gossip across time and cultures one realizes a global gossip network makes no sense from a human pov. All the negative effects and few of the positive. As Hill points out, Online Social Networks make sense for small assemblies of friends, families, and interest groups. This is the goal for OSNs of the future. FB “Groups” might resemble the type of content-focused social network that is valuable to users, but, of course, on FB these are exploited exclusively for FB or the administrator of the group. The users get free participation, but little of the value created. A small club of influencers is not the future of OSNs.

A digital license could impose some necessary public goods features, but for regulating audience size, the potential for abuse and centralized control probably outweighs the benefits. Better for the market to solve this problem with competition, but that will probably require some government policy that reduces or eliminates the existing natural monopolies due to network effects. (“Search” needs to be a public regulated utility, while Amazon needs to spin-off its vertical integration. I’m still of the opinion that large social networks like FB will be competed away.)

I would imagine the future would look like many social networks that are decentralized but coordinated in some way so that one doesn’t get siloed. And personal data must be under the control of users with the value of the social network created shared among them. For that one probably needs some kind of a decentralized blockchain solution. Most large, complex systems only become manageable through coordinated decentralization of control. Think representative democracy and Federalism.

Q: How Can a Musician Make Money?

Q: What do musicians do?
A: Create and share their art!
Q: How does a musician make money?
A: Money?

Hint: It’s all about the data.

Read more…

Streaming and Skimming

The argument here is really about product flow vs. art. According to Spotify, the quality of artistic expression is not what’s important to listeners, it’s all about the product flow. An oversupply of crap is still, well, crap. Spotify needs data, not music. They want to use musicians to mine their data network value to justify their share price.

Streaming services as distribution networks are not friends to artists.

Spotify CEO To Musicians: “You Can’t Record Music Every Three Or Four Years And Think That’s Going To Be Enough”

Why You Should You Get Paid for Your Data

Why You Should You Get Paid for Your Data

Seven out of the top 10 most valuable companies in the world are tech companies that either directly generate profit from data or are empowered by data from the core. Multiple surveys show that the vast majority of business decision makers regard data as an essential asset for success. We have all experienced how data is shifting this major paradigm shift for our personal, economic and political lives. Whoever owns the data owns the future.

But who’s producing the data? I assume everyone in this room has a smartphone, several social media accounts and has done a Google search or two in the past week. We are all producing the data.

The Digital Planet

The Information Age is different in many ways. This is why digital formats have roiled physical formats across all the creative industries. We need to think outside the box.

Interesting article from an academic expert (my annotations in red):

a digital platform is either large or dead.

Why economics must go digital

neweurope.eu

Diane Coyle

One of the biggest concerns about today’s tech giants is their market power. At least outside China, Google, Facebook, and Amazon dominate online search, social media, and online retail, respectively. And yet economists have largely failed to address these concerns in a coherent way. To help governments and regulators as they struggle to address this market concentration, we must make economics itself more relevant to the digital age.

Digital markets often become highly concentrated, with one dominant firm, because larger players enjoy significant returns to scale. For example, digital platforms incur large upfront development costs but benefit from low marginal costs once the software is written. They gain from network effects, whereby the more users a platform has, the more all users benefit. And data generation plays a self-reinforcing role: more data improves the service, which brings in more users, which generates more data. To put it bluntly, a digital platform is either large or dead.

As several recent reports (including one to which I contributed) have pointed out, the digital economy poses a problem for competition policy. Competition is vital for boosting productivity and long-term growth because it drives out inefficient producers and stimulates innovation. Yet how can this happen when there are such dominant players?

Today’s digital behemoths provide services that people want: one recent study estimated that consumers value online search alone at a level equivalent to about half of US median income. Economists, therefore, need to update their toolkit. Rather than assessing likely short-term trends in specific digital markets, they need to be able to estimate the potential long-term costs implied by the inability of a new rival with better technology or service to unseat the incumbent platform.

This is no easy task because there is no standard methodology for estimating uncertain, non-linear futures. Economists even disagree on how to measure static consumer valuations of free digital goods such as online search and social media. And although the idea that competition operates dynamically through firms entering and exiting the market dates back at least to Joseph Schumpeter, the standard approach is still to look at competition among similar companies producing similar goods at a point in time.

The characteristics of digital technology pose a fundamental challenge to the entire discipline. As I pointed out more than 20 years ago, the digital economy is “weightless.” Moreover, many digital goods are non-rival “public goods”: you can use software code without stopping others from doing so, whereas only one person can wear the same pair of shoes. And they require a substantial degree of trust to have any value: we need to experience them to know whether they work, and social influence is often crucial to their diffusion.

Yet standard economics generally assumes none of these things. Economists will bridle at this statement, rightly pointing to models that accommodate some features of the digital economy. But economists’ benchmark mental world – particularly their instinctive framework for thinking about public policy questions – is one where competition is static, preferences are fixed and individual, rival goods are the norm, and so on.

Starting from there leads inexorably to presuming the “free market” paradigm. As any applied economist knows, this paradigm is named for a mythical entity. But this knowledge somehow does not give rise to an alternative presumption, say, that governments should supply certain products.

This instinct may be changing. One straw in the wind is the call by Jim O’Neill, a former Goldman Sachs economist who now heads the Royal Institute of International Affairs (Chatham House), for public research and production of new antibiotics. Having led a review of the spread of anti-microbial resistance – which will kill millions of people if new drugs are not discovered – O’Neill is dismayed by the lack of progress made by private pharmaceutical companies.

Drug discovery is an information industry, and information is a non-rival public good which the private sector, not surprisingly, is under-supplying. [Yes – this is what intellectual property rights/copyrights/patents is all about. The problem is attributing the value created by the sharing of information. We may be able to solve that with blockchain ledgers.] That conclusion is not remotely outlandish in terms of economic analysis. And yet the idea of nationalizing part of the pharmaceutical industry is outlandish from the perspective of the prevailing economic-policy paradigm.

Or consider the issue of data, which has lately greatly exercised policymakers. Should data collection by digital firms be further regulated? Should individuals be paid for providing personal data? [Yes, they should. Personal data is as proprietary as personal labor and personal ideas. Making sure users get paid for their data changes the business models of these natural monopolies.] And if a sensor in smart-city environment records that I walk past it, is that my data, too? The standard economic framework of individual choices made independently of one another, with no externalities, and monetary exchange for the transfer of private property, offers no help in answering these questions. [Yes, because we don’t yet assign value to shared information. We rely on the property rights of tangible assets.] 

Economic researchers are not blameless when it comes to inadequate policy decisions. We teach economics to people who go out into the world of policy and business, and our research shapes the broader intellectual climate. The onus now is on academics to establish a benchmark approach to the digital economy and to create a set of applied methods and tools that legislators, competition authorities, and other regulators can use.

Mainstream economics has largely failed to keep up with the rapid pace of digital transformation, and it is struggling to find practical ways to address the growing power of dominant tech companies. If the discipline wants to remain relevant, then it must rethink some of its basic assumptions.

Data Land Grab

FB-vs-Google

‘Good for the world’? Facebook emails reveal what really drives the site

As we can read from this article and Facebook’s internal management debates, Web 2.0 (of which the GAFA companies are the archetypes) is built on a data land grab. It’s rather similar to the actual land grab that the European powers battled over for the New World, then with the colonization of Africa and Asia.

Data is now a valuable resource that has been priced up there with land and capital. Naturally, the tech oligopolies and their startup wannabes all want to grab as much as possible. And who are they grabbing it from? The network users of course.

Web 3.0 is all about democratizing the value and monetization of personal networked data. It’s about decentralized ownership and control, much like the desire to own and control the fruits of one’s labor that ended slavery. Web 3.0 is the future, because Web 2.0 is unsustainable.