The Case for Value 4 Value
Enabling the age old voluntary value exchange model in the age of bitcoin
Made popular by Adam Curry and John C. Dvorak with their No Agenda Show podcast that has been running since 2007, the Value 4 Value model has been around for centuries. Its most popular age-old example is busking. A performer does their thing in a public square or a farmers’ market, the audience enjoys the performance and if they enjoy a little too much they are more than welcome to do a quick shimmy. And when the show is over, the audience puts in the performer’s open box what they felt their impromptu jig was worth. The busker seeks not your patronage, but a direct payment for what you thought their effort deserved. No middleman, straight to the performer, whatever value each audience member felt they wanted to voluntarily offer.
In the modern world, where performers of all kinds - writers, musicians, artists, podcasters et al - can distribute their work with the click of a button from their home/studio, the lifecycle of revenue generation through licensing, paywall, and various other Digital Rights Management (DRM) methods is immortal. But as brilliant as the never ending ability to generate revenue sounds, the problem with digital content is that it can be reproduced ad infinitum with neither the creator getting to know about it, (and worse) nor do they earn any revenues if the reproduced content is generating any.
Unlike a physical good whose duplication has real costs, a digital good is perfectly copy-able. And if it is a piece of work that has found appreciation from people, it will be copied. And shared widely. Unfortunately though, putting a blind eye to this are the various modern-day publications that have gone on to build walled gardens of paywalled content. Echoing Gigi: “The paradox of Digital Rights Management is this: content will only stay behind a paywall if it is shitty. If it's good, someone will set it free.” Thus, a way to solve the dilemma of seeing people reproduce your work repeatedly while you try to paywall it to earn a living is to let it fly free. Confused? Allow me to explain some more.
What is the Value 4 Value Model?
As described above, any online info that is non-scarce, easily reproduced, and effortlessly liberated requires a voluntary model. Some describe it as a type of donation, Pay-What-You-Want (PWYW) or crowdfunding, and we like to call it Value 4 Value (V4V). One way the V4V model stands out from the conventional methods of raising funds is the flippening of the two steps of payment and enjoyment of the content. In most mainstream transaction initiatives, the payment takes place before the work is consumed or even produced. Examples: your local commute, McDonald’s burger, or WSJ subscription. In a V4V model, however, the creator receives value after the “customer” enjoys the content. The creator generates value through their content and in return, the customers decide to pay with something of value without the involvement of a third party, voluntarily. P2P. V4V.
What V4V also does is it makes the creator focus on customer delight and not on clickbaity headlines or those wide-open mouth thumbnails that have plagued YouTube. Unlike the sponsorship infested content that is served to you by echo-chamber prison enabling algorithms, if the customer likes the work you produce, they are likely to come back for more knowing full well that it is their contribution that allows you to keep creating. So, can V4V emerge as a viable alternative to the advertising behemoth? Simply, it can. By making you in charge of the value you provide independent of any pressures of censorship or worse, self-censorship. When the customer decides the value and pays directly to the supplier, the supplier places the responsibility on the customer to value the service you provided. And when they do offer you some value, you can find a balance between your effort and the return it generates. You are now not chained by the arbitrary desires and threats of the sponsors. If this isn’t true freedom, what is?
Granted, these transactions are likely to be of small amounts, but digital content scales in ways physical content delivery can’t and never will. Fortnite sees millions of viewers logging in to watch their live events; while the biggest ticketed physical concert had only 225,000 attendees. Unfortunately, though, V4V isn’t the norm or standard. Services often incorporate various tricks to ensure revenue keeps trickling in, whether the customer is getting their best work takes a back seat. The V4V model does not leave room for tricks for it is transparent. It places the responsibility of delivering value on the creator and its true valuation on the recipient.
How can this value exchange take place online?
As argued previously, the struggle for digital content monetization is about setting a price for something that can be perfectly replicated over and over again. And with advertisers deciding what should exist on the internet, the model of monetization on the internet is broken. What is needed is a direct P2P transfer of value online. This is made possible through the native money of the internet, Bitcoin - whose instant transfer is facilitated through the Lightning Network (LN). In the V4V model, LN is a fast and secure way for customers to show their true appreciation. It is now up to the creator to decide whether to provide value to high payers or to the long tail of micro-payers or even a balanced distribution that optimizes the true valuation. Check out Podcasting 2.0 as a successful V4V model enabled by the Podcast Index and apps like Breez, Fountain and, Sphinx Chat that allow users to stream payments to their favorite podcasters while they listen.
We, at Alby, are strong supporters of the V4V model. We connect consumers and websites, and provide the most convenient building blocks to transfer value over the Lightning Network. Check out our V4V page to learn how everyone can support their favourite creator and how easy it is for publishers to receive bitcoin directly on existing social media channels. Explore the Alby browser extension or try out the Alby Lightning address to start exchanging sats and dip your toes in the world of Value 4 Value.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.