Web3 Has Found Its Missing Piece: Creator Coins

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Is anyone here old enough to remember Bowie Bonds? In the 1990s, rock icon David Bowie decided to commoditize his music, selling asset-backed securities that gave his fans a share of royalties for 10 years. The bonds were issued by a major institution, which gave Bowie a whopping $55 million up front so he could buy the publishing rights for his old songs. 

Well, it should come as no surprise that David Bowie was ahead of his time, not just in music and fashion, but also in how artists can leverage their work to make money. 

Because Bowie Bonds are back. Well, sort of.

I’m talking about creator coins. Artists now have the option of minting their own digital currency, which fans can buy to support their work, or even share in their success. Take Felicia Day, for example. The actress and Twitch streamer (with more than 4 million followers across multiple social networks) launched a coin to fund her work. Her fans get perks like podcast shoutouts, signed merch and video messages. Day gets a direct line to her fans (and their money) without having to use a crowdfunding platform like Patreon, that would take a 5-10% cut, at minimum.

Since at least 2020, platforms like Rally have enabled anyone out there — even you — to mint their own coin.

It’s not hard to understand the appeal. In today’s digital world, where a handful of giants like YouTube, Meta and Spotify control the ways in which artists publish and monetize their work, it’s never been more important for those artists to have a new way to get paid.

But where Bowie Bonds disrupted intellectual property rights near the end of the analog era, creator coins have the chance to be the harbinger of a new revolution in the way we use the internet and consume content. A more equitable way for everyone.

Waiting on the web to change

Unless you’ve been living under a rock, you’ve probably heard about Web3 by now. And unless you’re a hardcore techie, you probably don’t understand what it is.

Web3 — the third “era” of the internet — promises to take the flood of free information that characterized Web1, the social connectivity that propelled the growth of Web2, and then combine them into a decentralized internet where tech giants can’t control the methods and means. 

It encompasses everything from cryptocurrencies and NFTs, to play-to-earn gaming and virtual real estate. Web3 proponents say it will change the way we use social networks, how we bank, and crowdsource money for causes. The common denominator: in the absence of centralized control, power defaults to the users themselves. 

That sounds great. But the problem so far for Web3 is that most people just can’t relate. Applications centered around decentralized finance don’t really capture the hearts and minds of the average internet user. 

For contrast, think about the way Facebook showed an entire generation the power and appeal of Web2 and social connectivity. It was easy to sign up for, intuitive to use, and tapped into our most basic needs for sharing and affirmation. Web3 is still missing that “super app” that helps it reach critical mass. 

But maybe not for long.

Why creator coins can be Web3’s killer app

Creator coins, at least in theory, have a lot going for them. First and foremost: mass appeal. 

At root, creator coins tap into the universal concept of fandom. We’re all fans of someone — artists, athletes, celebrities, politicians, you name it. Creator coins provide a tangible connection to the people we admire. My daughter loves Ariana Grande. If she could buy an Ariana coin, I can guarantee she would be begging for my credit card number.

But the appeal goes deeper than that. 

For creators there are obvious advantages to minting their own collectible currency. Consider this: YouTube takes 45% of all ad revenue generated by a creator’s original content. Creator coins cut out that middleman, leaving more for creators themselves. They provide a means to engage directly with an audience, circumventing the restrictions, commissions and headaches of centralized platforms. Artists can still publish on these platforms — like YouTube, TikTok or Substack — while selling coins to support themselves on a decentralized marketplace. 

Then there’s the upside for fans. Scroll through the most popular coins on Rally, and you’ll see a wide range of perks that come with them — one-on-one meetings with creators, exclusive access to new music or merchandise, online courses, and so much more.

Beyond perks, creator coins can be approached like a long-term investment, akin to Bowie Bonds — people can essentially buy a stake in an artist’s career. The value of the coin will rise and fall much the same as a stock on the stock market. For fans, there’s an opportunity to not only show your support for your favorite acts, but also financially benefit when they do well. Plus, you’re investing — quite literally — in people you believe in, potentially leveling the playing field when it comes to systemic barriers. 

Expression of fandom. Community-building tool. Long-term investment. Creator coins function on multiple levels. But what’s critical is that the appeal is accessible and relevant to nearly everyone. We all want to be part of something. Creator coins provide a tangible way to connect with the people we already admire and follow. They bridge the digital and physical worlds — easing people into the world of Web3: enticing, but not daunting; innovative, but not over-complicated. 

That’s not to suggest these things don’t come without risk. Bowie Bonds, for example, turned a lot of heads while accruing a solid 7.9% interest rate … until Napster came along. When music sales plummeted, so too did the value of the bonds. They were downgraded to junk status before the 10-year term was up.

All that to say — the first through the door won’t always get it right. With creator coins right now, a lot remains to be seen. The minting, buying and trading of creator coins is still far from seamless, and this has curbed adoption by creators and fans. Regulatory frameworks also remain murky, and there’s the added pressure of watching the value of your coin rise and fall like a stock on the stock market.  

But the question for me around creator coins is not if, but when… and who will play our Web3 Bowie?

A version of this article was originally featured in Cointelegraph. Keep up with my latest posts by following me here or on Twitter and Instagram.

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