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Offline bytemaster

Associated Press, DAC
« on: November 03, 2013, 06:33:09 PM »

Overview
 
  • APShares built on a variation of BitShares
  • Writers pay with APShares to submit articles once every 5 minutes
  • Only one article may be submitted every 5 minutes
  • Speculators bet on the value of that article relative to APShares (BitShares style Prediction Market)
  • Dividends Due collateral on short positions are paid to the Writer
  • 25% of all transaction fees on transactions related to the article are paid to the Writer
  • Writers pay to create an individual IPO for themselves, one new writer per week.
  • Articles are not copy righted and may be distributed / reproduced at will and the writer will profit by this

A case study of The Associated Press, DAC  by Daniel Larimer
Source: http://invictus-innovations.com/dacs-whats-in-a-name

8BTC is a Chinese news aggregator and blogging platform that has begun calling themselves a Decentralized Autonomous Corporation (DAC) or a set of DACs.  The core idea is that writers each have Bitcoin addresses and that revenue generated by the websites advertisements are paid to the writers via the Bitcoin addresses.   This is a centralized company with a centralized domain name that could be taken down.   8BTC also claims to have a membership DAC, but they have a centralized pre-screening process.

After hearing about 8BTC’s misuse of the DAC concept to describe their service, I decided I would sit down and define how such a service could be implemented as a true DAC.  If you are not familiar with the concept of a DAC you may want to take some time to review our prior articles on the subject.

The first step of this process is to accept that it must not have any centralized dependencies.   This means it must be free from all centralized servers and domain names and must not rely on centralized copyright enforcement.  The service must also be free of all centralized advertising revenue.  Lastly the service must be free of centralized editors or censorship.   The second step is to clearly define the purpose of the DAC in a manner that enables us to think outside the box as we consider potential implementations.

I would define the goal of 8BTC as generating revenue for the writers and to promote distribution of solid high-value content.   The traditional means of generating revenue is through advertising, tips, and paywalls.  Meanwhile valuable content is acquired by paying talented writers and using centralized editors.  None of these traditional means of achieving our desired goal are possible with a DAC, so we must think different.

For the purposes of this article, I will name this new DAC The Associated Press, DAC (AP, DAC) after the The Associated Press, Inc which is a flesh and blood corporation in the business of distributing stories across many outlets.   AP, DAC will be a dividend paying, for-profit, DAC that will derive profits for its shareholders from service fees.

If we are going to build a decentralized news distribution service then we will have to find a new way to generate revenue for writers while also filtering the best content.   We will also need a new distribution model that does not depend upon any one domain name or web host.    This is the easy part, you must allow anyone to republish the content on any domain and in any manner they wish and then provide them with financial incentive to do so.   Then you must also provide a way for the original, potentially anonymous, author to profit even as their content is being distributed far and wide.

This is where a prediction market enters the equation.   Allow any author to submit a URL to their article to the block chain.   Once the URL has been submitted (with an appropriate fee paid), the author can place a bet on the ‘value’ of that article.  Those who read the article can then bet on whether they think the value of the article will go up or down from its current price.   If they think it will go up in value they bet on the article and then work to republish the article and advertise it through their channels.   If they think it will go down in value they bet against it and focus on promoting other content instead.     All bets can be tracked and settled in the block chain in a manner very similar to how BitShares works.

The end result of this AP DAC is that market forces will conspire to create many outlets for quality news that is hard to censor.  It will result in rapid recognition of quality work and reward the authors of that work handsomely as the perceived value of the article rises.  It will reward web hosts who advertise or republish the work because they bought into the article along with the author.  Publishers also generate revenue from traditional sources such as advertising by having high-value content to distribute.   It will also automatically filter bad writers which provide low value content because they will lose money if they continually pay to submit articles that never gain any traction.

Someone might point out that a solid author who writes predictably popular articles will have a hard time buying in at bargain basement prices and thus his opportunity to profit from the rise in popularity of his articles will be hindered.   This can be addressed by giving the author a large cut of all transaction fees associated with speculating on the value of his articles.   Any article that is picked up and published far and wide will have a lot of people buying a stake in it and the author will get a cut each time this happens.  He can also rake in a royalty payment from detractors betting against his article.  In a sense, the more detractors one has the greater your royalty payments will be!

How Royalties are Paid
To fully understand the mechanics of this you will want to read the BitShares white paper and my article on Decentralized Autonomous Corporations, but I can provide a high-level summary here.    Anyone wishing to speculate on the value of an article going up must find someone willing to speculate that the value will go down.   The individual betting against an article must post collateral in the form of shares in AP, DAC to maintain a short position.  Because shares in AP, DAC pay dividends like most other DACs the dividends on the collateral can be redirected to the author of article.

Under this design there are three parties that benefit in different ways.  Someone who decides to invest in an article and ‘go long’ profits when the price rises.  Someone who decides to bet against an article and thus ‘go short’ profits when the price falls more than the dividends they would have received and lastly the author profits from these dividends.  The more people speculating on his article the greater the royalties the author earns.

All of this will work without the need for centralized advertising or donations and will provide a better news source than any existing news aggregator.   Translators would have a huge financial incentive to translate successful articles from one language to another because they have an opportunity to ride a similar growth curve in the new language.

While the content will be distributed, the author also builds brand recognition and drives traffic to his own website as a result.   People start following his work directly so that they can get a heads up on new articles to invest in.   This gives authors many indirect means of profiting from their work.

In addition to speculating on the value of individual articles, users can speculate on the value of individual writers.   In this event an individual can invest in themselves early on and then work to build their own brand through publishing quality articles.  As they establish a solid track record they make a large return on their investment.  It is like having a mini IPO for every author.  Once again, those who go short in order to bet against a particular writer have the dividends on their collateral redirected to the writer and as a result generate a steady stream of revenue for the writer.

Scalability of AP, DAC
Clearly there is a lot of overhead associated with creating a market for articles.  There must be a large number of players before efficient markets can take effect.  Fortunately, AP, DAC doesn’t need to process every possible blog like Digg or Reddit.  Instead AP, DAC is in the business of producing the highest quality articles by the best possible writers.

To keep the markets deep and focused on the highest quality articles, AP, DAC must limit the number of submissions it allows every day.  This is easily accomplished by only allowing one submission per block.  Therefore the first obstacle an article must overcome is getting included in the block chain in the first place.   Miners will obviously pick the articles that pay the highest fee and as a result the first step in the process is an auction.   The best writers bid against each other to get their articles published by AP, DAC by paying highest transaction fees.

Likewise, there must be a limit on the number of writers who have a personal market. This could be limited to one new writer per week and they would also have to pay the highest transaction fee to have a market created to speculate on their value as a writer.

These transaction fees add to the profits of owning AP, DAC.

Conclusion

AP, DAC is a new way to align market forces to promote the production and syndication of the highest quality of news content in an entirely decentralized manner that richly rewards authors, readers, and publishers who participate in the system without having to rely on ads, donations, or micro-payments.   It is truly decentralized and autonomous and will automatically provide market incentives to produce quality articles while earning a hansom profit for its decentralized owners.
« Last Edit: November 04, 2013, 09:16:30 AM by bytemaster »
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline segunda_demao

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Re: Associated Press, DAC
« Reply #1 on: November 04, 2013, 09:33:32 PM »
A good way for the new talents to promote their work. Imagine mining for the highest quality.

Offline ruletheworld

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Re: Associated Press, DAC
« Reply #2 on: November 15, 2013, 12:43:28 AM »
Firstly, wonderful idea! I am definitely going to participate in this, both as a writer and speculator. A few questions though -
1. Are articles supposed to be original to this DAC or can anyone submit an already published work?
2. How will you handle plagiarism?
3. Are the articles going to be posted somewhere, like on a web-interface through the DomainShares perhaps?
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Offline Stan

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Re: Associated Press, DAC
« Reply #3 on: November 15, 2013, 12:57:46 AM »
Firstly, wonderful idea! I am definitely going to participate in this, both as a writer and speculator. A few questions though -
1. Are articles supposed to be original to this DAC or can anyone submit an already published work?
2. How will you handle plagiarism?
3. Are the articles going to be posted somewhere, like on a web-interface through the DomainShares perhaps?

Those are great questions best left to whoever takes on the challenge of developing this DAC.  Someone else may beat us to it.  We are living in a target rich environment and it is Invictus' intention to encourage a widely distributed industry of DACframers.

ProtoShareholders get a stake in every DAC that honors their Social Contract.  Then they can trade them for which ever DAC implementations they believe in.

Why do ProtoShareholders deserve such an honor?  Because they constitute the overwhelming majority of early adopters of any new DAC technology.  They are the only ones who can understand and appreciate what you are offering until your DAC is big enough to enter the conciousness of the General Public.

Leave that majority out of your launch?  That would be a Type One Error, no?
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Offline bytemaster

Re: Associated Press, DAC
« Reply #4 on: November 15, 2013, 12:59:51 AM »
Firstly, wonderful idea! I am definitely going to participate in this, both as a writer and speculator. A few questions though -
1. Are articles supposed to be original to this DAC or can anyone submit an already published work?
2. How will you handle plagiarism?
3. Are the articles going to be posted somewhere, like on a web-interface through the DomainShares perhaps?

The DAC doesn't deal with plagiarism at all... 
Articles would be reproduced everywhere, but they would all link back to the same item in the block chain to maximize its growth.
The DAC doesn't care about copyright

The DAC will focus on content and the value of that content regardless of who created.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline ruletheworld

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Re: Associated Press, DAC
« Reply #5 on: November 15, 2013, 02:15:40 AM »
Firstly, wonderful idea! I am definitely going to participate in this, both as a writer and speculator. A few questions though -
1. Are articles supposed to be original to this DAC or can anyone submit an already published work?
2. How will you handle plagiarism?
3. Are the articles going to be posted somewhere, like on a web-interface through the DomainShares perhaps?

The DAC doesn't deal with plagiarism at all... 
Articles would be reproduced everywhere, but they would all link back to the same item in the block chain to maximize its growth.
The DAC doesn't care about copyright

The DAC will focus on content and the value of that content regardless of who created.
Right, but that seems fair for newly generated content only.

For example, you have written an article on LetsTalkBitcoin about DACs. I shouldn't be able to submit the same article to the system and profit off of it under my name. Same goes with the work of other writers out there - I shouldn't be able to just steal their works, put it into this system and profit off of it.
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Offline fuzzy

Re: Associated Press, DAC
« Reply #6 on: November 18, 2013, 11:05:04 AM »
beautiful concept...
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Offline fuzzy

Re: Associated Press, DAC
« Reply #7 on: November 18, 2013, 11:13:46 AM »
Couldn't this model be used for ALL forms of media? 

ArtShares (digital art)?  PodShares (podcasts)? MelodyShares (Music)? TubeShares (video)?  ...InterpretiveDanceShares?  (ok ok...too far there...but you get the idea)

If I am not missing something, this could blossom into something really all-encompassing--though the higher bandwidth ones may require a bit longer to implement due to their larger file-sizes...
« Last Edit: November 18, 2013, 11:26:37 AM by fuznuts »
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Offline bytemaster

Re: Associated Press, DAC
« Reply #8 on: November 18, 2013, 05:45:08 PM »
Couldn't this model be used for ALL forms of media? 

ArtShares (digital art)?  PodShares (podcasts)? MelodyShares (Music)? TubeShares (video)?  ...InterpretiveDanceShares?  (ok ok...too far there...but you get the idea)

If I am not missing something, this could blossom into something really all-encompassing--though the higher bandwidth ones may require a bit longer to implement due to their larger file-sizes...

It is a market for speculation on ideas represented outside the blockchain, so no need to store content in the blockchain.... it could just be a torrent link.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline phoenix

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Re: Associated Press, DAC
« Reply #9 on: November 19, 2013, 02:26:23 AM »
Couldn't this model be used for ALL forms of media? 

ArtShares (digital art)?  PodShares (podcasts)? MelodyShares (Music)? TubeShares (video)?  ...InterpretiveDanceShares?  (ok ok...too far there...but you get the idea)

If I am not missing something, this could blossom into something really all-encompassing--though the higher bandwidth ones may require a bit longer to implement due to their larger file-sizes...

It is a market for speculation on ideas represented outside the blockchain, so no need to store content in the blockchain.... it could just be a torrent link.

Wow... this could change the way we get media so much!
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Offline fuzzy

Re: Associated Press, DAC
« Reply #10 on: November 19, 2013, 12:03:04 PM »
Couldn't this model be used for ALL forms of media? 

ArtShares (digital art)?  PodShares (podcasts)? MelodyShares (Music)? TubeShares (video)?  ...InterpretiveDanceShares?  (ok ok...too far there...but you get the idea)

If I am not missing something, this could blossom into something really all-encompassing--though the higher bandwidth ones may require a bit longer to implement due to their larger file-sizes...

It is a market for speculation on ideas represented outside the blockchain, so no need to store content in the blockchain.... it could just be a torrent link.

Wow... this could change the way we get media so much!

Lol...this is the first thing that has actually given me a great deal of hope for humanity.  Bitcoin started it, but also gave me a sense that it is Quite Possible to be Monopolized.  This, however, feels different.  I agree with you 100% phoenix...

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Offline devilfish

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Re: Associated Press, DAC
« Reply #11 on: November 22, 2013, 05:17:17 AM »
Wow...this is a spectacular idea and has help me get my head around protoshares and their potential. My roommate is a journalism student, have discussed this with him, we've got some ideas to make this work which I'll flesh out in the coming days.

Time to get my hands on a (bigger) pile of protoshares :)
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Offline devilfish

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Re: Associated Press, DAC
« Reply #12 on: November 24, 2013, 03:34:15 AM »
I missed it? (head shaking) Sorting through the comments I feel like I missed a great idea, Plagiarism is actually easy to detect with some type of software, anybody have a copy of the original idea I missed? looks interesting.

As far as I can tell the OP is the original idea but I don't think Invictus are going to develop this as they are working on other projects such as Keyhotee. Therefore I, and do correct me if I'm wrong, believe this idea is free to be developed.

I too figured there is already existing software that can detect plagiarism however software I am aware of (TurnItIn) will pick up things with quotes  in them for instance and flag those as plagiarised. This software generally relies on a human source to then manually go through those articles which have been flagged to confirm if they are plagiarised or not.

My thinking was a similar system can be implemented for the DAC with there being people who check flagged content to see if it is a copy or not. This check could be sent to multiple people to prevent bots from just saying they are or aren't plagiarised with an individual being given a score which is based on the number of correctly identified documents.

Ultimately, this system would be useable with not only text files but music, video, games etc etc. which leads me to think it would be best to create Media DAC for this purpose, which can be used by other DAC's focused on specific media (say a sports magazine DAC or a medical journal DAC etc.).
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Offline bytemaster

Re: Associated Press, DAC
« Reply #13 on: November 24, 2013, 03:39:40 AM »
This would be an adaptation of bitshares.  Bottom of our priority list


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Offline devilfish

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Re: Associated Press, DAC
« Reply #14 on: November 24, 2013, 03:43:11 AM »
Which is very understandable :)
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