Creators embracing cryptocurrency at their peril?
How influencers are made and how they make currency?
|Jesse Hirsh||May 3||8||9|
There are times when I’m entranced by TikTok, and there are others where I find myself repulsed. Now there’s a hypothesis emerging as to why this might be.
We’ve written extensively about TikTok over the last year and a half, and the through-line has been about TikTok’s ongoing rise, influence, and how their algorithm was different. Or at least seemed to be. Is it possible that the algorithm was not just the only force at play on the “ feed that is the default for all users?
To drive downloads, TikTok tried to ensure that creators, musicians, and advertisers were making money, too. Executives in Los Angeles and Beijing, where ByteDance was founded, left little up to chance: TikTok assigned individual managers to thousands of stars to help with everything, whether tech support or college tuition, inspiring a sense of loyalty among creators. TikTok regularly advises popular creators on which hashtags and features are important to the app and its advertisers, who are often guaranteed a minimum number of views per campaign. TikTok also connects creators with brands and musicians, which regularly results in paid partnerships.
Top users receive weekly emails with instructions on which videos to make to increase their exposure, says Gabby Murray, a 19-year-old TikTok creator from Florida with 8.5 million followers, who makes about $20,000 a month on TikTok. “I actually tested it out,” she says of a mirror filter her manager asked her to promote that allows users to clone their face. “The videos did super well. It wasn’t something I would typically post, but I just wanted to try it out. Because she said so.” (A TikTok spokesperson says trends still happen organically on the app.)
This approach differed greatly from the early operations of Twitter Inc. and Facebook Inc., where most things would start trending after lots of people posted about the same thing. American tech companies saw themselves as platforms, not content providers, and didn’t wheedle users to post about certain things, says Karyn Spencer, who ran creator development for Twitter’s video platform Vine before a user exodus forced the app’s shutdown. That ideology has changed somewhat as the companies have grown, especially on Alphabet Inc.’s YouTube and Facebook’s Instagram, which increasingly pay creators for content.
The role of platform staff in choosing and helping creators is an important dynamic given growing attempts to regulate these platforms more as media companies than intermediaries. Like an open secret they not only depend upon the stars within their growing talent system, but they also then exploit them effectively and efficiently.
An obvious historical analogy were the studios in Hollywood, and the control they once had over the entire creative production process. In particular how they owned the actors who starred in their motion pictures.
A similar system is emerging with digital platforms, albeit only temporarily, as there’s reason to believe that some creators will transcend or break out of the platforms. Assuming that is even possible.
Presently digital platforms are like containment mechanisms, or if regarded with a dystopian lens, prisons. Their goal is to contain the attention and people who are on them. To keep them there longer. To keep their data there for as long as possible.
Creators play a central role in this process, and they represent a commodity that also needs to be contained. Both the creator and the content they create.
While that may be difficult to do digitally, it is not always difficult to do from an algorithmic perspective.
For example, often upon encountering a compelling TikTok creator, I’ll look at their other socials, only to find their numbers and content there to be near non-existent. It’s not easy to translate success on one platform to another, not without an audience that has been trained or mobilized to do so.
This is partly why many influencers spend so much time and energy training their audience. Training them to train the algorithm. Training them to follow them to other platforms and train other algorithms.
There’s a kind of dance, perhaps more aptly put, guerilla warfare campaign, that a successful influencer wages when building a cadre of followers who will then raid and engage the algorithm to help promote the influencer and their content.
Almost political if it weren’t for the utter lack of politics that many of these influencers exhibit.
What’s next? Their own cryptocurrency of course!?
“In a few short months, the Rally Network has taken great strides in empowering creators, artists, influencers and their fans to embrace crypto and pioneer new paths for monetization and community building,” said Kevin Chou, Rally co-founder. “The Rally Network continues to expand led by innovative creators that are integrating their creator coins into their communities to establish flourishing digital economies. Through the successful adoption of their coins, creators are driving hundreds of thousands of dollars per month in transactions and community activity rewards. All powered by a platform that takes no fees from artists and is built in an eco-friendly way to support the minting of creator coins and NFTs.”
It’s not at all surprising that a company would emerge to focus on the use of cryptocurrencies and NFTs for influencers. To be a kind of bridge between the attention economy and the crypto economy. Pump and stump.
Through decentralized community governance, the Rally community approved two separate fundraising events to fund its community treasury and empower its continued growth. In January, the Rally community approved a community treasury fundraise and successfully raised ~$35 million USDC through its community agent. The Rally community also approved a sale by CoinList through its token distribution platform, which took place between April 1–3, with a max purchase threshold of USD$1000 per participant. This distribution resulted in an additional $22M USDC for the community treasury, with more than 40,000 new overseas users becoming part of the Rally community following the sale. Proceeds from these community-approved sales of $RLY flow to the Rally community treasury, which is governed by the community and spent through community-led governance proposals designed to better the Rally Network. No company or centralized party controls or has access to these funds.
As much as it is my instinct to be skeptical of such things I can also acknowledge the genuine desire among creators to declare autonomy from the platforms they use as part of their professional pursuits. Perhaps controlling their own currency and payment mechanism enables this?
Putting aside the argument that many users of cryptocurrencies do not possess sufficient knowledge to understand the nature of markets and currencies, I’m not sure these creators understand the consequences of financialization and commodification.
Their legitimate desire to diversify their income away from the platform that contains them blinds them to the real possibility of trading and old master for new ones. In this case their investors.
All within a brave new world where the rules are minimal if not being made up as we all go along.
At least it will be interesting to watch. Right?