Sunday, May 22, 2011

The dream that was our first failed start-up; start-ups are hard; the future is bright

I've recently discovered the awesomeness of bitcoin. Some years ago, me and some friends did a start-up before it was really super cool. The dream was simple: enable artists to buy and sell their shit as content is king.

There was a sub-text to the dream that was simple: FUCK MIDDLE-MEN.

We were building a in-system currency for enabling micro-transactions so people could sell things for fractions of a penny. We wanted to get prices to a point where indie artists could create and stimulate market demand by using low prices. In theory, it was awesome.

I fucked this up by being an academic trying to build a transaction system that would abide by all the rules of VISA/MC/banks, and then scale to the size of 10x facebook (Transactions are hard!). I say I fucked up because I think I put us in a position where we needed investment. There were lots of legal problems around our dream, and this was a big barrier to investment; so, we watched the dream die a slow and painful death. At least, in Kansas. Gauh, why did we try to do it in KS!

Now, the perfect solution is available via bitcoin. I'm honestly glad we didn't succeed because bitcoin + a weekend hack project could have put us out of business. We live in a bold new world with this internet thingy.

The dream we had can now be concisely built and done without worrying about VISA, Banks, Hackers or other shit. In fact, a bigger dream is available. Shit!, bitcoin could end piracy! (Well, kinda)

We are watching the death throes of the music industry. Eventually, the movie industry will end too. See, its not that music or movies are going to die. The middle-men, executives, organizers, and overhead to get the music and movies to consumers. They are going to go away with all the licenses.

Well, they aren't going to go away in a #rapture sense. They are going to have to accept a new reality (which is painful because most people hate change rather than embracing it). They are going to have to focus on the new emerging market and learn a new aspect of the trade. Well, people will skill will. People with no skills, they are kind of fucked... They should become artists.

How? Well, imagine a bit-torrent like protocol that required a bitcoin wallet. Sharing would be restricted between those people that have paid for it. The artist would simply start to seed their product with their wallet. In theory, this would lower the price of the content, increase the artist share. Lower product price + greater artist share should mean increased demand and thus more value to the artist. The ability to control pricing on the fly would enable artists to effectively market.

Downloading a client would be the most hard-core version of this scenario, but it is possible.

The interesting thing is that bitcoin is unstoppable. It may go into the black market, but eventually, it will win and be a legal form of currency. At least, for buying digital content.

What I'm considering now is whether or not it is worth it for me to build an escrow service with a search engine. It would be fairly simple with Elastic Bean Stalk, S3, some EC2 machines for search via Solr. Shit, I should be building this! Next weekend, I'm going upstairs to be with my wife.

What this system is going to create is a place for amateurs to get to a point where they can take on patronage projects. Once people effectively demonstrate that they can make things people want, then they can raise serious funds. Look at KickStarter. I love kick starter.

This is how small time videos produces will go big. I watch a bunch of YouTube people, and if they tried to raise serious funds, then I would fund them with some pre-sales. Now, how this will turn into $1B budget for making movies, only time will tell.

I think it is possible, and that is step one.

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