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Bitcoin’s Watershed Moment: An Open Source Cryptocurrency Ecosystem

adam_b_levine_bitcoin2103

At “Inside Bitcoins the future of virtual currency” Bitcoin Conference in New York held on July 30th, Adam B. Levine, senior fellow with the Bitcoin Education Project and Editor in Chief and Co-host of Let’s Talk Bitcoin! announced his ambitious project code-named “Watershed” (watershed.launchrock.com) in a well received speech, “Win-Win-Win-Win-Win: Rethinking Content Monetization with Bitcoin” with the collaboration of Farzad Hashemi.

The speech laid out the foundation for a versatile audience supported content exchange system.  More specifically, Levine told Bitcoin Magazine that Watershed will be “An open source, free platform for sustainable community ecosystems powered by cryptocurrency.” Recently we have witnessed content providers (which I would prefer to call content exchangers) big and small leverage the ”crypto-monetization” of web communities through tipping tools that eliminate so called “transaction friction” such as  Reddit's Bitcointip, Terk.co’s WordPress Bitcoin Tips Plugin,  Scotty.cc’s Coin Widget and even “intersertial ad” URL shorteners such as CoinUrl.  Watershed take these concepts to the next level. Levine described the old “broken” media model where the audience/media consumer does not have a direct connection to the author:Advertisers pay the Platform (i.e. the Website Operator), The Platform pays the Content Creator, The Content Creator creates content for the Audience,  The Audience supports the Advertiser. Watershed closes this content exchange gap with an Audience Supported Content system.  

Hat Tip to Early Thinkers: A Brief Pre-History of Bitcoin Tipping

February 16th, 2010: Elnora Crater on the Bitcoin Forum BitcoinTalk.org pondered a “URI-scheme for bitcoin”  whereby “The bitcoin addresses could be improved by implementing an URI-scheme like e.g. torrent magnet links....This would allow one to implement ‘donate buttons’ on homepages, ‘pay buttons’ on webshops...”November 12th, 2010: The controversial Bruce Wagner wrote that “Bitcoin Needs a ‘Tip Jar’ Widget system like Flattr.”April 04, 2011: Jed’sIdea for the killer bitcoin app” laid the groundwork for a broad, all-inclusive Bitcoin Tip Jar with a “Twitter tipping system”, “Web based tipping”, “SMS tipping” and a “Forum tipping plugin.”September 23, 2011: Manu Sporny explained “Why Tipping has failed” on his blog “The Beautiful, Tormented Machine” that “Standardizing Payment Links for the Web is not enough – we must also focus on listing and transacting assets that provide value to people.”  And further “...the problem is a deeper social issue of paying for unrefined content...”  Sporny was also a speaker at today's conference  as the CEO of Digital Bazaar and is the founder of PaySwarm, “the world’s first open, Universal Payment Standard for the Web.”

2013 Bitcoin’s Tipping Point

On April 5th, 2013 Scott “Scotty.cc” Sherman announced the release of Coin Widget on the Bitcoin Forum: “coinwidget.com donation widget - now open source (w/litecoin support).” Coin Widget is a customizable and elegantly simple to use Bitcoin and Litecoin donation widget. It can display the total amount or the total number of tips and provides a QR code for additional donations. Shortly thereafter, on May 18th 2013, Adam B. Levine gave his seminal speech "Youtube is Broken!: Rethinking Content Monetization with Bitcoin" at the San Jose “Bitcoin 2013: The Future of Payments” Bitcoin Conference. Adam’s speech and Scotty.cc’s widget compelled David Perry of Coding in My Sleep to announce on the forum that he was “Looking for WordPress plugin (or someone to write one) to bring some of these ideas to fruition.”     Terk.co, taking the bull by its horns announced on May 24th, 2013 that “I hate Wordpress development as its architecture is so wrong, but I loved the idea so much that I actually learnt writing Wordpress plugins overnight....This is a result of my all-night work and this is a working plugin that does what {David} described.”  Terk.co’s WordPress Bitcoin Tips Plugin was born.

Enter Watershed

Working on these themes and with a grand vision, Levine announced Watershed. “My focus is not so much on commerce as it is on creating sustainable community,” said Levine. Watershed separates the platform from the content that resides on it, transforming the way we create, consume and exchange content.  In this new paradigm the audience pays for content, the sponsors pay for the platform.

Influenced by Dr. Conrad Barski’s Cointagion, which utilizes a “Real-time Generation of Bitcoin Addresses for a Web Commerce Site” Levine revealed “OAPUPU” or One Address per Use per User scheme.  OAPUPU pre-populates a new payment address for each potential user/consumer and tracks and credits payments, tips, donations, subscriptions all without requiring the user to navigate away from the page they are visiting.  Moreover, advertisers can embed actionable payment mechanisms such as QR codes to enable frictionless e-commerce and e-giving.

From a user privacy vantage point this system appears to one-up legacy services such as PayPal. Like PayPal, individual merchants do not store consumers’ credit card details; However, unlike PayPal there is no money transmitter service (i.e. PayPal) requiring you to park your financial details either. This is a direct widget to Bitcoin Wallet (to Block Chain) to merchant and content provider exchange. In a metrical rhythm Levine described how he envisions community supported content where information consumers tip authors for content on topics they are passionate about. This virtuous cycle of tipping,

leads to

content creators wanting to service those needs

results in

increased search rankings

leading to

more audience

meaning

there are more people willing to tip

leads to

more/better content creators creating content

leads to

better search results

resulting in

more audience

 

Watershed will bridge the creator/audience divide by enabling a new level of intimacy:

“Content creators already have a direct connection to their audience, the problem is until Cryptocurrencies there was never an easy and borderless connection from the audience back to that creator.  The audience compensates very indirectly by buying from site advertisers, which funds the site and which might trickle down to the creator, but there are two basically unrelated and unnecessary parties involved...By separating the platform from the content that lives on it, you dramatically simplify things.“
 

Quality is: Win, Win, Win Win, Win:

Results Based Pay for Creators - Win

Better Content for Audience - Win

Better Growth for Platform - Win

More Eyeballs for Advertisers - Win

Better Content - Win

Brave New Widget World

This is not your one size fits all Starbucks barista tipping jar. Tip splitting will divide tips into multiple addresses.  For example a percentage of the tip can go to charity. Affiliate syndication will enable creators to embed referral commissions into content, incentivizing syndication and social media distribution.

eCommerce Evolution

Watershed will be built with “WindowShop” Live Auction functionality. Announced was WindowShop which will take the Cointagion concept and reinvent display advertising. Advertising will directly engage the consumer rather than a tiered multi-click process. Three clicks becomes hyper-click. This will be the driving force behind a new type of impulse shopping. As a real world comparison, I was reminded of Tesco Homeplus Subway Virtual Store and PeaPod Virtual Shelf.   I was excited to learn about trustless and riskless live auction integration into Watershed. Live auctions will use blockchain escrow. On-chain escrow will enable refunds (i.e. release of escrow) without fees.  The stroke of genius is that since the money is not held by the merchant or platform, but rather by the blockchain itself, this reduces if not eliminates fiduciary risk and likely the regulatory compliance requirements (e.g. money transmitter licenses) for facilitating escrow transactions.  However, this requires a new way of thinking about auctions in general. Bidders would have their funds tied up in escrow until the conclusion of the auction. A paradigm shift in the way online auction can be conducted by completely removing dead beat and hoax bidders out of the equation. Gone are the days when sellers would state “serious bidders only” ...and what good did that do?.       

Moving Forward

Levine’s speech at San Jose inspired other to act. With the announcement in New York, Levine anticipates spearheading Watershed and he told Bitcoin Magazine he anticipates running its operations as a not for profit. Watershed is an ambitious and broad proposal that is not yet funded. Collaborators are actively being sought to engage project Watershed. Potential developers should contact Levine with proposals. Levine boldly stated, “Rich, cryptocurrency advertising turns every community platform into a mini-kickstarter - Pick the community or niche that should be your primary audience and conduct that campaign right there in an advertising slot.”  Can Watershed be the Kickstarter for the “other 6.5 Billion people? Watershed with its multifaceted approach needs to gain enough momentum to vault ahead of maturing companies such as Flattr and newcomers such as Pikapay & BitCredits.io. Flattr describes itself as the "easiest way to support creators...give microdonations when you 'Like,' 'Favorite' & 'Star' ..support creators directly on services you use." Flattr, more than three years strong recently added Bitcoin Support. PikaPay with a more narrow focus is now Microfunding Over Twitter.  BitCredits.io, a similar project was recently announced on Bitcoinstarter.I’ve had the privilege of working with Adam as a writer for Let’s Talk Bitcoin! He has a creative drive and is passionate for his work. If anyone can bring together a project of this magnitude I know it will be him.
Brian Cohen

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