The blocking and access protocol wants readers to pay with tokens
Will you hand over some crypto to read an article? At a time when more news sites are putting up paywalls, influential crypto company The Block is betting that readers will do just that.
As Axios reports, readers of The Block will soon be able to put down their credit cards and instead access the site by handing over something called “Access Tokens.” The idea is that as long as you park a certain amount of tokens (“staking” in crypto-speak), you have the equivalent of a subscription.
The project is being managed by an outfit called Access Protocol that hopes to make its tokens the new coin of the realm for the media world. If all goes well, readers will buy Access Tokens and then use them to view all kinds of online content. This process promises to involve less friction than credit cards, and as a sweetener, it offers rewards to both publishers and readers in the form of—you guessed it—more access tokens.
It’s a bold plan, but will it work? Skeptics have already responded to The Block’s news by comparing it to Civil, a tokens-for-articles project from five years ago that raised $5 million and made lofty promises to transform media — only to die with a whimper.
Civil may provide a cautionary tale, but it’s hard to see The Block suffering the same fate. A big reason is that everyone at The Block has a deep understanding of crypto. At Civil, where I spoke to staff at the time, none of the journalists involved could explain how the project would work. Meanwhile, Civil’s economic model appeared to be based on selling a bucket of tokens in an Initial Coin Offering (ICO) and figuring out the details later. That plan was founded when the Securities and Exchange Commission made it clear that ICOs were illegal in 2018.
The Block, on the other hand, has already built a very successful business around its news and research products, and is not resorting to token payments in the hope of some pie-in-the-sky windfall. They are well positioned to manage this.
That said, it’s far from clear whether the Access Tokens model has a chance to catch on outside of The Block’s niche audience of crypto geeks. While credit cards create their own friction, most people will still find it much easier to whip out a Visa instead of acquiring Bitcoin or Ethereum to exchange it for more tokens, then staking those Access Tokens on various sites.
This complexity likely explains why mainstream publishers have yet to join The Block in the bold experiment — another obstacle to the project catching on. If tokens are going to replace credit cards when it comes to paying for media, readers will want to be able to use them on sites like LA Times or The economistand not just a handful of crypto sites.
Then there is regulatory risk. In the current climate, a token of any kind can be considered a security, and there is a very real chance that The Block will hear from the SEC and its crypto-hating chairman, Gary Gensler.
None of this is to take away from The Block’s brave experiment. The company is right that the current paywall and subscription model is deeply flawed – readers are forced into annoying arguments just to read articles and then subjected to ransom-like procedures to unsubscribe.
Blockchain promises a superior experience. As long as it works.
Jeff John Roberts
[email protected]
@jeffjohnroberts
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THE MOONSHOT CHILDREN
Call it the subprime mortgage crisis. It is the title of one Fortune report on owners of Bored Ape Yacht Club NFTs who have get into a lot of trouble after lending them out.
It turns out you can use almost anything for loan collateral these days — even pixelated pictures of monkeys. And that’s what hundreds of Bored Ape owners did, handing over their NFTs as collateral in return for borrowing Ethereum on a platform called BendDAO. This worked for everyone in the boom, but in the crypto winter it has led to a liquidity crisis as the price of monkeys fell and demand fell off a cliff:
“At the height of the BAYC liquidation crisis, BendDAO held 241 Bored Apes in their debt pool, which equates to about $20 million in loan exposure. That equates to 2,000% of BAYC’s daily spot trading volume of $1 million. In stark contrast, the largest peer-to-pool ETH lender MakerDAO’s lending exposure … less than 2% of daily ETH volume.”
FINANCIAL STATEMENT
Sandbox launches new alpha season and expects half a million users by Marco Quiroz-Gutierrez
Ethereum Foundation confirms start date for “merger” transition by Taylor Locke
Autograph launches NFT fan club with access to Tom Brady by Marco Quiroz-Gutierrez
Tether ignores Treasury’s sanction of Tornado Cash by Leo Schwartz
Ethereum ‘merger’ will change crypto forever: Everything you need to know by Taylor Locke
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
IF YOU DON’T KNOW, CRYPTO
The term pump-and-dump didn’t originate in the crypto world, but it sure comes up a lot. The term originally referred to unscrupulous stock traders who would hype (pump) a stock they bought, then sell it off (dump) when others also bought it. The sinister scam has become all too popular in crypto, including with YouTubers like BitBoy who disguise their pumps as investment advice.
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