The Ownership Economy 2022 – Variant: When Content Creation Goes to Zero

The Ownership Economy 2022 – Variant: When Content Creation Goes to Zero

In the rapidly evolving landscape of the internet, a new paradigm is emerging - the ownership economy. This concept revolves around the transformation of users into owners, where they have both passive and active participation in the products and services they engage with. The rise of non-fungible tokens (NFTs) is a testament to this phenomenon, with an estimated 360,000 owners of NFTs in 2021. Additionally, popular wallets like Metamask and Phantom have reported substantial monthly active users, indicating the growing interest in user ownership.

The idea of user ownership is not without its challenges. While it can jumpstart growth, sustaining it is a more complex task. The costs associated with user acquisition can be prohibitive for consumer apps that lack external funding. For instance, the average cost to acquire an app user was $3.52 in 2019. However, platforms like Uniswap have successfully made their users owners through governance tokens and LP shares, enabling them to grow at a rapid pace. This suggests that decentralized exchange growth may outpace their centralized counterparts in the future.

Furthermore, new token distribution designs are playing a crucial role in boosting user loyalty. Axie Infinity, a popular blockchain-based game, has demonstrated strong user retention compared to traditional mobile games, emphasizing the significance of digital ownership. Tokenomics, the study of token incentives, is still in its infancy, but as more research and experimentation occur, the next generation of tokens is expected to better engage users and incentivize long-term contributions. By rewarding behaviors that contribute to a network's retention and sustainability, token distribution can become more granular and targeted.

The ownership economy also fosters richer ecosystems of projects and contributors. Shared ownership reinforces network effects and creates a disincentive for users to switch to other blockchains. Ethereum, despite facing competition from alternative blockchains with lower fees, continues to grow rapidly due to its network effects, mature developer tooling landscape, and ability to integrate with existing applications. This suggests that the ownership economy can contribute to the development of thriving ecosystems.

One of the key advantages of the ownership economy is that it allows users to become owners earlier and participate in value creation. In the past, ownership was limited to a select few, but the advent of web3 technologies has democratized ownership, enabling users to contribute to and benefit from value creation. As Chris Dixon predicted, what the smartest people do on weekends is what everyone else will do during the week in ten years. Ownership is now extending beyond digital assets to encompass a wide range of products and networks.

However, as content creation costs approach zero due to advancements in AI technology, the implications for the economy are significant. AI tools like GPT-3 and DALL-E have the potential to dramatically decrease the cost of producing goods with a digital component. This begs the question: when acquisition is the only competition left, what shape will our economy take?

While existing technology companies may benefit from these AI tools, startups that act as infrastructure providers for other companies may be more disruptive in the long run. The power law dynamic that emerges with new innovations often concentrates power in the hands of the elite. Similarly, in a world where distribution costs are at zero, the companies that have novel acquisition methods independent of gatekeepers will have the advantage.

The impact of AI on product design itself is another aspect to consider. The products that can feed the best data into AI models will have an edge. This dynamic rewards products that can be redesigned to have better training inputs, shaping the future of product design.

In this changing landscape, the responsibility for the message becomes a crucial question. As AI determines what medium is successful, who owns the responsibility for the message itself? This raises concerns about distinguishing between real and fake content and understanding what is tailored specifically for each individual.

In conclusion, the ownership economy and the decreasing costs of content creation due to AI are shaping the future of the internet. User ownership can jumpstart growth but requires sustainability. New token distribution designs are enhancing user loyalty, while fostering richer ecosystems of projects and contributors. The ownership economy allows users to become owners earlier and participate in value creation. However, as AI pushes content creation costs to zero, the economy will undergo significant changes. Startups acting as infrastructure providers may be the most disruptive, and product design will be influenced by AI models. The responsibility for the message itself becomes a critical consideration in this evolving landscape.

Three actionable advice for navigating the ownership economy and the impact of AI are:

1. Focus on building strong product-market fit: Tokens and ownership can capture user attention and drive initial adoption, but sustainable usage requires solving a widespread need for users. Prioritize creating products and services that address real pain points and offer unique value.

2. Stay updated on tokenomics and token engineering: As the field of tokenomics evolves, new practices and models will emerge. Stay informed and leverage these insights to design token distributions that effectively engage users and incentivize long-term contributions.

3. Embrace AI as a tool for innovation: Rather than fearing the disruption brought by AI, embrace it as a tool for innovation. Explore ways to incorporate AI technology into your workflows to improve productivity and create novel solutions.

The ownership economy and the decreasing costs of content creation are reshaping the landscape of the internet. By understanding these trends and taking proactive steps, individuals and businesses can thrive in this new era.