Why isn’t crypto changing the creative economy?

If you want to know why there is so much talk about crypto and blockchain’s potential to transform the creative economy, a good answer might be that there is so much that needs transformation.

No one has been more vocal than musicians who are upset about the very micropayments they get for song streams — $0.003 to $0.005 are the most quoted figures, which translates into earnings of $3,000 to $5,000 for 1 million plays.

Another is that so many other companies, including social media giants like Facebook and Twitter, are trying to fix a very broken system that it’s an obvious target for an industry built on the concept of eliminating financial intermediaries.

See also: Facebook swings from news coverage to the creative economy

It’s a simple pitch: Creators can take payments directly from fans, without any bank, credit card issuer or payment processor in the middle taking a cut. That sounds great until you actually try to send bitcoin from one digital wallet to another: It’s a process that even tech-minded people find cumbersome.

Read more: Crypto Basics Series: What is a Crypto Wallet and How to Avoid Losing a Quarter of a Billion Dollars?

Then there’s the reality that most creators live on a platform of some kind: Twitter or YouTube, Spotify or Apple Music, or one of the many, many creator-focused platforms for musicians, artists, social influencers, podcasters, subject matter educators, and more. These platforms tend to take a cut – or pay what they want.

And there is really no need for crypto payments on these platforms. Sure, in April Twitter teamed up with payments technology firm Stripe to use crypto — starting with the USDC stablecoin — for subscription payments for creators. But Stripe began supporting Twitter’s traditional Super Follows payments back in September of last year.

Related: Twitter launches stripe-powered superfollowers for creator subscriptions

That said, as more and more merchants start accepting crypto payments through processors like BitPay and Strike, and more people actually start paying with crypto – more than a quarter of the nearly 60 million US crypto consumers prefer merchants that accept digital assets, PYMNTS US Crypto Consumer Survey found – it should become easier and more lucrative for individual creators to accept crypto with a payment button instead of a digital wallet transfer.

Of course, if they follow the more common pay-in-crypto-but-receive-cash process that is becoming the norm – in no small part to avoid dealing with volatility – it doesn’t change the creator economy as much as that. adds a new payment rail.

So, where does crypto fit in?

The best current answer is social tokens.

There have been others, such as Steemit, a blockchain-based social media and blogging platform where creators can earn STEEM tokens for creating content. But no one has really taken off.

What is a social token?

Social tokens are custom cryptocurrencies built around a specific brand, community or content creator. At their core, they are about access and benefits.

At the high end, a number of European soccer teams such as Barcelona, ​​Manchester City and Juventus embraced fan tokens that provided access relatively early. Juventus token holders can vote in polls on topics such as the song played when the Turin, Italy, team scores a goal, while FC Barcelona token holders can via VIP access to stadium tours and player meet and greets.

More recently, they have been embraced in the United States by the Ultimate Fighting Championship (UFC), 28 of the 30 teams in the National Basketball Association and half of the National Football League’s 32 teams.

But individual artists and creators of all stripes have created social tokens on Rally, a platform that describes itself as “a place for creators and their communities to build their own independent digital economies.”

All of this should tell you what you need to know about the key strength and weakness of fan tokens: They are highly dependent on superfans and require a constant stream of specialized content and access to keep them attractive—that is, valuable.

“You kind of have to provide perpetual benefits,” Mason Nystrom, an analyst at crypto research firm Messari, told CoinDesk. “If people buy your token, you have to continue to provide value, or have an exit strategy, which is quite challenging.”

Which points to a fundamental problem with crypto as a tool for the creative economy: It doesn’t really make it much easier to connect with fans without a large fanbase, and it doesn’t really make it easier to get paid without a platform to connect with fans.

And if you make $0.003 per song or 0.000003 BTC, it doesn’t matter until you’re Drake, who brought in 3 billion streams in the first five months of the year.

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