Digital media forms have steadily been taking over the more traditional ones over the past two decades. However, digital content can be difficult to monetize, as most people are accustomed to the abundant ‘free’ content available to them on the internet. Unfortunately, whether a media outlet is physically or digitally publishing content, a lot of the costs associated with content creation are still present. There may not be printers or delivery drivers, but there are significant costs associated with running and optimizing a digital content delivery system.
With online ad revenue failing to make up for the loss of physical ad revenue, many big media websites have started their own digital subscription services at this point in time. Anyone who has visited websites like New York Times, Wall Street Journal, or the Washington Post has probably encountered their paywall. There are ‘soft paywalls’ that suggest you subscribe to continue or allow you a certain number of articles per month. There are ‘hard paywalls’ that require payment to continue. Either way, these paywalls are disruptive to the customer experience for both free and paid users. Could blockchain technology have a solution to this revenue problem while also reducing the friction consumers face online?
Blockchain: A Future Paywall Solution
Coinhive, a service launched by the operators of a German image board site, offers an alternative to their premium paid subscription. Users can ‘pay’ for the content they are consuming with hashes generated by their computer – instead of their wallets.
Developed with the goal of protecting their community’s privacy from intrusive and seedy advertisers, their technology has the potential to further monetize web content. Coinhive currently provides three tools that can be embedded in a website to provide Monero (XMR), a cryptocurrency, back to the website operator through ‘proof of work’ done by the visiting computing device. There is a JavaScript miner, a short URL service, and a Captcha, that use hashes from visiting computers to ‘mine’ Monero for the site operator.
Due to the large fees, cryptocurrency microtransactions haven’t really taken off. But through this method, the currency is mined as a pool, ultimately bypassing that issue. While the Captcha is primarily aimed at preventing spam and blocking bots, the same concept could be applied to a paywall. Visitors to an article could be prompted to mine a small amount of cryptocurrency, instead of hitting a hard paywall asking them to subscribe.
This is an example of how easy it could be:
Depending on your device, it may take only a few seconds to perform. The amount of time can be configured to balance the amount of revenue generated, with the experience of the visitor.
Risks and Challenges of Coinhive
As with any new technology or monetization options, there are risks and challenges to implementation. Due to the popularity of Monero, and the fluctuation of its value compared to USD, this would only work at a large scale. At present, this method would require a few million visits to generate $100 worth of Monero (1XMR = ~$100 USD at the time of writing). Currently, this could not be used as a sole funding source of a website. However, the future of these technologies is promising and there are many other ways this same technology could be implemented.
In addition to the Captcha, running the JavaScript miner would generate additional Monero. Hashes are generated at a certain rate per second. Media sites with high session lengths would benefit the most from this, as the longer the visitor is on the page, the more they are contributing to the pool. Furthermore, new cryptocurrencies are being developed and released to the public every day. Monero is not the only option, and in the future, there may be a better option for media organizations to utilize.