A bit of non-Steem/crypto news evaded my shields and I am a little horrified. One of the really, really nice things about my full-time immersion in Steem since mid-July is that I have completely ditched Facebook (to the tune of a literal handful of logins since August) and I very rarely find myself reading click-bait or the otherwise depressing news articles that my Facebook friends share incessantly. Still, every now and then, a bit of non-Steem, non-Crypto news infiltrates the Gnash-base and this morning was one such occasion when I stumbled across this article from the New York Times:
"That Game on Your Phone May Be Tracking What You’re Watching on TV"
tl;dr
A company called Alphonso has developed software that can be integrated with many different kinds of (non-related) smartphone apps and can run in the background even when the apps are not being used; this software accesses a smart phone's microphone to identify TV shows that are playing in the background (even when the phone is in a pocket!); the app also accesses location information to record the location of the phone owner and uses the gathered data so advertisers can target ads based on the smart phone owner's TV viewing habits and lifestyle.
Why horrified?
From the big business perspective this is undoubtedly an amazing development - Alphonso's software can collect data on ads that a user watches while at a friend's house, while in a bar, etc., so it goes way beyond the kind of info that traditional TV viewership researchers like Nielsen can gather with a set-top box. Coupling that with the ability to track real world location even when not watching TV and you can now show a link between a specific ad shown on TV, on a specific time slot/station, and a real life visit to a particular store. This is an advertiser's wet dream. But what about this development has me a little horrified?
Well for one thing there are apps targeted at children (kid's games) that are integrated with the Alphonso software, which just rubs me wrong on a very basic level. But more importantly, this is just another example of the kind of thing that gets crammed down consumers' throats in the legalese of a user agreement:
Alphonso said that its software, which does not record human speech, is clearly explained in app descriptions and privacy policies and that the company cannot gain access to users’ microphones and locations unless they agree.New York Times“The consumer is opting in knowingly and can opt out any time,” Ashish Chordia, Alphonso’s chief executive, said, adding that the company’s disclosures comply with Federal Trade Commission guidelines. The company also provides opt-out instructions on its website.
In what world does clicking yes on the user agreement of a children's app on the Play store constitute agreeing that Big Brother can watch TV with you and accompany you to the adult bookstore?
This world, apparently. Show of hands in the comments - how many of you actually read user agreements?
The future of VALUE on the Steem platform
As unsettling as this story was, it did prompt my train of thought to take off down an interesting track. Generally when you hear people talking about value on Steem it is in terms of original content adding value. The call is always for more original content creators, and the worry is that Steem is going to drown in a sea of plagiarization and crap posting and spam posting.
First let me say that I am absolutely and 100% for original content. I support truly original, creative content and that is the entire point behind the Human Certified Original Works initiative.
That being said, I am not convinced the original content that will be posted on Steem is going to end up being the most valuable thing about the Steem blockchain (speaking purely of value in the economic, business valuation sense - what about Steem will generate the most dollar value).
Where does Facebook's value come from
Facebook is one of the 5 most valuable companies in the world. Does its value come from the original content produced by Facebook users? Definitely not. Is there original content being produced on Facebook? Definitely.
You could argue Facebook's value comes from its user experience and functionality. This is certainly why Facebook has so many users! So maybe you could say that Facebook's value comes from its number of users. This is a circular argument but certainly true - Facebook would not be valuable if it did not have users. But why. What do the users provide that is so valuable?
I already rejected original content categorically above and do not feel I even need to justify this - everyone knows what makes Facebook valuable is not the original content produced on it. It is advertising dollars. Part of the value is just the number of users, because this represents potential consumers for brands to target. This means part of the value is the user experience and functionality which attracted the user base.
But it can't just be the number of users. There are many other channels where a brand can engage with consumers - TV and print still have huge reaches, but they are falling farther and farther behind Facebook in the ad dollar game. Where is Facebook generating this revenue edge? What the users of Facebook provide that is valuable is a literal treasure trove of data that Facebook data scientists have attacked with the best tools available to man and machine to create one of the most effective advertising ecosystems in the history of modern commerce. It does not matter in the slightest if anything original was ever created on Facebook, from the valuation standpoint, as long as enough users shared and liked and interacted and created this data set which gives Facebook leverage that no other ad seller has (ok, except maybe Google and Amazon). Facebook can target ads with a breathtaking precision.
What is so interesting to me when I think about value on Steem is a hypothetical future where the active user base is in the tens of millions (or more). This assumes that Steem does NOT sink in a pile of crap and dissolve in spam and explode in a flurry of reach arounds. This assumes that steemit.com/Steemit, inc., or (more likely) a 3rd party website/app solves the user experience issues. In this future, the greatest value will BE the blockchain. It will be the record of all these social interactions and linked financial transactions - it will be a treasure trove like the one Facebook has under lock and key, but this data set is PUBLIC.
Let that sink in.
Anyone or any team will be able to develop highly sophisticated and accurate ad profiling algorithms to target Steem users based on their actions on blockchain. The question will be how can this be leveraged into ad spends; will ad dollars find a way on platform directly? Will Steem user profiles be linked to real life identities through browser fingerprinting or other techniques, enabling advertisers to target Steem users based on their Steem transaction history even if the ad is being served up on a totally unrelated website? Will you receive coupon offers from your local grocery store customized with the help of your Steem activity?
It is not a question of if, but when - as long as the user base of Steem grows large enough, the sheer advertising value inherent in that mass of data will ensure that someone figures out a way to monetize it.
To bring this full circle - does the average Steem user understand that everything on Steem is public? Will the average user understand this when it is not just a bunch of tech savvy, crypto-sphere, early adopter, content creator types round these parts? Is this any different from advertising software like Alphonso hiding in a user agreement? I would not be surprised if a very significant chunk of Steem users do not realize that wallets and transaction history are public - it would be very easy to assume that you can see your wallet because it is yours, and to never even think to look in someone else's wallet.
The public nature of this entire thing has fascinated me from the first little bit I read about Steem. The idea that every little tiff and squabble, every drunk or impulsive comment, every edit and retraction - EVERYTHING - is all just hanging out there in the sun for all to see. This is the value and it is right there for anyone who wants to take it. Data is value. By making everything public and visible all the way to wallet transactions, Steem is creating a truly remarkable public commons of data. I am sure that advertising is not the only way this data will be used, and is probably a very limited vision of the true potential worth of this mountain of information we call Steem. I don't have to be able to see the exact uses this data will be put to, to know in my bones that it is a gold mine.
Much love - Carl
