What makes Nostr and Bitcoin so extremely exciting to me, as a designer, is that they offer an entirely new design space. Something we never had before. Something that we can, for the first time ever, call…
A Free Market.
And not just that, but one where everyone speaks the same language. One that acknowledges that Sovereignty doesn’t go that far without Interoperability.
Since this is literally a first, it seems terribly naïve to assume that we can just copy what works for Big Tech’s walled gardens and add some Freedom sauce on top. I’ve been sketching out things like “Twitter but with Zaps”, “Youtube but with many algo’s”, “Patreon but with Bitcoin”, etc... for long enough to realize the harsh limits of such an approach. Instead I’ve found it more fruitful to start by looking at the characteristics of this new digital, interoperable free market and, only then, look for similar existing benchmarks that can serve as inspiration.
Because the convergence of the various Freedom Tech protocols (Nostr, Bitcoin, Cashu, …) are such a huge game changer for online monetization specifically, it seems even more naïve to just start copying Big Tech on that front, without proper examination.
If we did just play copycat, Monthly Subscriptions and Paywalls would be the obvious answer. This article dives into why they’re not.
Free as in Competition
In a free market, it’s going to be hard for you to set a price if you don’t have something scarce to sell. Unlike in a Big Tech walled garden, there’s no one blocking competitors from entering the market. That includes competitors that offer your stuff!
If what you create can easily be copied, it will.
Yes, Content creators, FOSS devs, Designers, … that’s you.
Charging for your article, podcast, app or movie doesn’t end well when people can find a free upload right next to yours. Open protocols remove the friction of having to go PirateBay for that sort of stuff. Luckily, they also remove the friction for people to value your content directly (#V4V Zaps) and for you to launch unique and scarce products related to what you do (Community, Merch, …).
Even if you have a scarce product to sell though, Nostr sets the bar lower than ever for others to start competing with your product. Every part of your product!
Interoperability breaks products and services down to their constituents and opens up every layer of the stack to competition. Currently most SAAS business models are basically very expensive monthly subscriptions for some hosting and computation. And guess what Nostr is extremely good at → Discovering and switching providers of hosting and computation.
In a competitive context like that, you need a monetization model that lets you adapt fast. If you choose to monetize with monthly subscriptions, you’ll be updating your subscription tiers every month, if not every week, just to remain competitive. If that’s the case, then what’s the point? Why not just have a cash price list?
Free as in Volatile
The reality of a free market is that price-discovery never takes a break. This is especially true for a market that uses a money that is still being discovered as money by 99% of the world. A money that, just like Nostr, only saw the light of day because its creators saw total chaos ahead without it.
Bitcoin and Nostr do #fixthemoney and do #fixtheinternet, but all that fixing isn’t exactly taking us on a smooth ride.
Smooth rides are stable rides, stable prices, stable amounts of locked-in users, stable ties with the state, etc… They are everything Freedom Tech is taking us on exciting journey away from.
Again, adaptability is key and your business model needs to reflect that. Monthly subscriptions don’t handle volatility well. It takes a lot of confidence, extremely loyal customers and liquid reserves to survive bumpy roads. That’s a lot of capital that probably has better uses. Better uses that Big Tech monopolies can ignore, but your competitors won’t.
Free as in “Number Go Up”
Denominating your subscriptions in “stable” fiat-currencies isn’t going to help neither. The mental cost for customers is only low as long you don’t have juggle more than 21 subscriptions. (yes, I completely made up that number but it’s somewhere around that, so bear with me).
Given that Subscription Hell is already a thing in Fiat-land once you go beyond that number, just try to imagine the amount of subscriptions you’d be handling in Nostr-land. Your 1 Netflix subscription suddenly became 6, to different service providers, plus 20 to all your favorite creators. Then add the subscriptions for all other internet use cases you can think of. Then add some more for the ones that you can’t even imagine yet.
This is not an overstatement. It is very very unlikely that your service happens to be the only one that subscriptions would work for. If they appear to work for you, every competitor or similar use case will be copying that model in no time.
So if they work, there would be a loooot of subscriptions.
That’s also a looot of:
- recurring payments to forget about
- different time periods to oversee
- extra effort to go and unsubscribe or switch tiers
- users thinking ‘I didn’t even really use this!”
- users also thinking “What am I paying for exactly?”
In short, that’s asking for frustrated, disappointed and confused customers.
These subscriptions would then also need to be handled on top of all the #V4V Zaps and cash payments that are inevitably happening as well. Unlike Big Tech products you don’t get to just pick Subscriptions as the only option. You will have to be optimizing both the Wallet and Social UX/UI for all of these types of payments. Something I naïvely tried and quickly gave up on. It overcrowds interfaces, makes different applications less interoperable and creates a very confusing user experience.
And if you denominate everything in fiat, you add even more confusion since the Zaps from others are denominated in Bitcoin. That suddenly makes them variable from the fiat-denominator’s perspective. Other denominations work when you only have two parties (f.e. seller and buyer), not when you have groups of people zapping away at an article. For #V4V to gain traction zappers need recognition. If it’s completely variable, and thus unclear, who the top zappers of a piece of content are or if the biggest patrons of a creator are only visible if you go to some specific subscriber dashboard, you’re creating confusion and diluting recognition.
Zaps are awesome, nearly universally implemented, very simple to design for and they might just be enough. We’re mostly still early. Creators can’t even reply to Zaps yet. The first prototypes for frictionless Cashu zaps are only just coming out. Let’s explore all that further before we start adding subscriptions to the UI, the users’ mental load and the app developers endless list of “things to implement”.
If the current zap-rate of daily Nostr users (myself included) tells me anything, it’s that sending around small payments all the time isn’t really the issue. The mental cost for the user happens mostly at the level of:
”How the f*ck do I keep track of all this?”
“How do I fit this in with my regular monthly expenses?”
Subscriptions are only one answer to this. If they happen to still somehow solve the above issues for some use cases, we still have to find solutions anyway for the micro-payments side of things.
My point is thus mainly: we might as well start there and, who knows, we don’t even need subscriptions. Or at least not as a standard to strive towards. No one is stopping you from using time-based pricing for things that are actually time-based or from creating micro-apps that let you set up recurring zaps and other fun stuff like that. Just don’t promise creators and merchants that they can base their business models on them.
If you’re talking to people that will only consider Freedom Tech if they can have the stability of a group of monthly subscribers, you’re probably not talking to the right people (yet!).
Freedom Tech = Responsibility Tech.
Both seller and buyers need tools that help them take that responsibility. Especially regarding payments, the currently available tools are far from optimal and have barely scratched the surface of what’s possible in the interoperable ocean of possibilities. I say this more as an invitation than as a complaint of course. We are — yes, I’m saying it again — sooooo early.
So how can we help buyers be responsible while “not having to think about every little payment”?
For rich npubs on a network denominated in #NGU technology the answer can be quite simple: They simply don’t have to really think about it.
In fact, poor npubs neither as long they can set a spending budget and have great tools and transparency to help them manage it.
They need something a bit like their “lives left” in a video game. Or something that resembles envelope budgeting: like going to the farmers market with only a limited amount of cash.
Talking about farmers markets
Let’s look at what currently comes close to an interoperable free market in meat-space: Restaurant & Farmers markets. - No one has copyrights on pizza Margherita or chicken eggs - Entering the market is relatively cheap (food trucks, farmer stands, …) - Customers can pick and choose where they get “every layer of the stack” (drinks here, main dish there and ice cream over there)
Now look at how these businesses monetize: - Cash price lists - Discounts (for special occasions, loyal customers, ..) - Bundles (lunch menus, vegetable baskets, …)
Both restaurant owners and farmers have been trying out monthly subscriptions since forever, mostly because it would benefit them. But in places with high competition this has had exactly zero success.
What did have success is services that bundle farmers market food items for you and deliver it at your doorstep on a weekly basis. That’s what lower mental cost looks like.
Ironically, these services often started out with the monthly subscription model and have had to switch because customers needed more flexibility. Now, in their apps, they let users pick what day they want what, at what price.
And these apps are not even Nostr yet.
Talking about Nostr markets
Nostr markets are not exactly farmers markets of course. But that is mostly good news. Nostr, Bitcoin and Cashu, in particular, remove a lot of the friction that cash still has in the physical world. They enable seamless micro-payments. That’s an innovation worth embracing, not something to hide away behind subscriptions.
Embracing micro-payments means that every little thing can have a real-time price. A price that, once payed, you never have to think about again. And some, if not most, micro-payments are so micro that you don’t have to really think about them in the first place. Especially if we’re talking about recurring events (pun intended).
If a chat message in a certain Community costs 2 sats, after your third message your added mental cost will likely be close to zero. At that point, the price is mostly a matter of transparency, fairness and spam prevention. When the Admin suddenly changes this price to 1000 sats however, you will need to think twice about posting such a message. But again, that is a good thing. That’s exactly what the Admin is monetizing.
He is curating for high signal content and conversations around a certain interest. His price list is one of his top tools for doing so. You pay him for being able to publish in his unique community. You “Pay Per Use” of that Community as a broadcasting channel for your messages, articles, videos, … You know everyone else does too.
Using monthly subscriptions for such a community would just invite abuse and poor quality.
It would be like an all-you-can-eat restaurant where everyone has an infinite stomach size, you’re all at the same table and only the loudest screamers get heard.
So the Admin would put limits on what you specifically get for your subscription (100 messages per month, 210MB of hosting, etc etc…). The members would then demand flexibility or go elsewhere.
The admin would then provide different tiers.
Yet, most members would still need flexibility more than they need flat rate monthly pricing.
At the same time, the Admin’s “Pay Per Use” competitors will still be cheaper. They don’t have the overhead of handling the uncertainty that comes with providing stable pricing for several months. Trying their offer out is also way cheaper than immediately having to pay a subscription. The admin, on the other hand, cannot really offer free trials if he doesn’t have the locked-in users to pay for them.
In the end, just like restaurants, the Admin will switch to “Pay Per Use” and will use discounts and bundles to his advantage.
As long as users have great tools to keep an eye their spending, this sort of outcome is a win-win for the whole ecosystem. What users tend to like most about monthly subscriptions for something is the guarantee that they will not exceed XXX amount of money on that thing for the month. Nothing is stopping us from building tools that provide the same guarantee without the complications of handling monthly subscriptions.
Since most Bitcoin wallets are not daily-spending wallets and most Nostr projects aren’t monetizing yet, hardly any attention has been spent on tools like this. They all copied bank apps and display your total amount of money and a chronological feed of your transaction history. There are several problems with this: 1. You don’t want to openly showcase your total balance to everyone around you when you open the app 2. Your total balance shows “everything you have”. That is a terrible benchmark for determining “what you can sustainably spend”. 3. It’s also a terrible benchmark for determining “what you earned this month” 4. Micro-payments make a chronological feed of all your transactions completely unusable 5. Zaps make a lot of your transactions social. Zaps and eCash blur the line between money and message. And messages require interaction that transactions don’t.
I think we can do better.
So, let’s try!
Cash Budgets
Just like the previously mentioned “lives” in a game or the cash in your wallet for a night out, the first thing users will want to see is “How much do I have left?”. Since most people organize their budgets per month we can more specifically turn this into “How much do I have left this month?”. This means we need to allow users to set a monthly budget in the first place. Once that budget is set for the month, it facilitates all the rest.
This budget is their subscription now. Their Nostr subscription.
An interoperable subscription they can interact with in any trusted app.
And the best part: They pick the price.
They’re taking their responsibility and lowering their mental cost with one action.
Now, you can start playing with wallet and home screen Interfaces that show the user at a glance: - What they’ve got left to spend for that month - What they already spent - What they earned (relative to that budget and/or a specific earnings goal)
I’m currently exploring this design space myself and the extent to which Freedom Tech budgeting can be gamified in novel ways will make TikTok look boring.
Some baby UI steps in this direction
But that’s just the budget part of course. We still need non-intrusive ways to display all these little price-tags for things if we’re not hiding them away behind a subscription.
The good news is that, when it comes to movies, music, articles, posts, FOSS apps and all other types of information that can easily be copied, it doesn’t have a price tag. It just has people zapping it. People that can use a lot more context and recognition than they currently get. (showing top zappers everywhere and letting creators reply to zaps being just a humble start for that)
For the stuff that does have price-tag, even the most obvious answer isn’t as bad I though it would be:
Just put it on the button.
The bigger the sum, the bigger the button.
eCash is what can make all of this work as a one-button action anyway, removing most of the friction. A budget, on the other hand, is what can remove most of the worrying. Color indications, permission prompts for higher amounts, etc etc… can all work in tandem for this.
With these examples I’m mostly trying to give you an idea of what is still left largely unexplored territory.
A territory that we will have to go and explore in any case.
A territory where Communities are easier to monetize then Content is.
A territory where I can count the current number of active designers on both hands.
A territory that can desperately use a Design Community.
You can guess twice what’s next on my todo-list….