Carlson-Wee: Companies launching tokens must stop extracting direct network revenue
Olaf Carlson Wee · 20VC: Inside The World's Leading Crypto Fund, The Future Exit Environment for Crypto Assets & The Beauty Of Benevolent Dictatorship with Olaf Carlson-Wee, Founder @ Polychain Capital · Dec 11, 2017 · at 15:51
Olaf Carlson-Wee, founder of Polychain Capital, explains why traditional monetization models like advertising or fees fail when existing platforms attempt to transition into tokenized peer-to-peer protocols.
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“The second thing is that if you are launching a token and you're a private company, you should be ready to stop extracting any revenue from your network. So however you were extracting revenue from the network, whether this was advertising or paid subscriptions, particularly advertising in these traditional network effect companies like Twitter and Facebook, the other option is kind of a charging of fees. So this is like Uber or Airbnb. Both of these models don't work in a cryptographic token environment. The reason being that you no longer own your network. The moment you make the network effects of your platform incentivized through a blockchain token, you also lose control of that platform to an extent because you no longer have full control over what is now a peer-to-peer protocol. So as a company that's launching a token, you need to be ready to basically stop extracting revenues for your company and actually move fully into a peer-to-peer system. And in general, the only way you can accrue value there is by holding a Some of the cryptographic tokens that you created in order to incentivize users on your platform.”
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