Download: Episode 41.
This week Audrey and I talk about Bitcoin and it’s monstrous power consumption, Patreon’s fee changes, community broadband efforts, and more. Enjoy!
- Bitcoin could cost us our clean-energy future | Grist
- Cryptocurrency – Wikipedia
- Bitcoin Energy Consumption Index – Digiconomist
- We’re Updating Patreon’s Fee Structure. Here’s Why. – The Patreon Blog
- No one makes a living on Patreon | The Outline
- Inside the 6 Hypotheses that Doubled Patreon’s Activation Success — Brian Balfour
- My theory: Patreon doesn’t want to be a money services business | Subfictional Studios
- Better than Patreon / Audrey Eschright
ProPublica & Facebook political ads
Community broadband efforts
- This Interview Was Conducted on an Anonymous, DIY Cell Phone Network – Motherboard
- To Save Net Neutrality, We Must Build Our Own Internet – Motherboard
- Equitable Internet Initiative | Allied Media Projects
Things we like on the internet this week
- Audrey: Fixed the atom feed on her blog (so go subscribe) and wrote a post about Patreon.
- Christie: Present & Correct on Twitter: “A super nice book of old Finnish stitch patterns. Here in full https://t.co/g8vw8363uj https://t.co/hv5ADIvIBT”
Holiday Newsletter Now, Through December 16th
We’re now sharing daily gift ideas, educational resources, and favorite causes to support, through December 16th. Stay with us through until the end to be included in a final gift drawing from The Recompiler and our friends. Further details and sign-up here.
New products in the Recompiler Shop!
Call for Contributors for Issue 10: Science!
For our second issue of 2018, we’ll be talking about science! From computers to data to social and natural sciences, it’s a way we explore the world and define our work.
Here’s a few ideas to get you started:
- Connecting computer science fundamentals with everyday programming
- How open source software tools power scientific exploration
- Ethical data collection and use
- Citizen science and ways of bringing non-specialists into our work
- When is computing an art, a science, a craft?
- Anything involving dinosaurs
We look for ideas that will be effective at an advanced beginner to intermediate level of technical knowledge, and that are grounded in the author’s personal experiences. We’re especially interested in work from people who are part of under-represented groups in technology. Contributors are paid.
Find the details and submit your ideas at https://recompilermag.com/participate/. Submissions are open through January 1.
Now Broadcasting LIVE Fridays at 10am PST
Taking what we learned from our first ever live telethon earlier this month, and equipped with a brand new mic for Audrey, we’ll now be broadcasting our episode recordings LIVE on most Fridays at 10am PST. Mark your calendars and visit recompilermag.live to tune-in. Note: No live broadcast on December 15th since Christie will be out of town, but we’ll be back the following week.
We love hearing from you! Feedback, comments, questions…
We’d love hearing from you, so get in touch!
Christie: Hello, and welcome to The Recompiler, a feminist hacker podcast where we talk about technology in a fun and playful way. I’m your host, Christie Koehler.
Episode 41: We’ll never have a perfect mix, but we’ll keep trying.
This week, Audrey and I talk about Bitcoin and its monstrous power consumption, Patreon’s fee changes, community broadband efforts, and more. Enjoy.
Did you have any announcements, Audrey, before we start talking about stuff?
Audrey: Well, the holiday newsletter is well underway. I think we’re on day five, and there’s still time to sign up. We’ll keep going all the way through the 16th. That’s the main thing. Oh, but you know what? I added new products to the shop yesterday.
Christie: Oh, what did you have?
Audrey: We have a new mug design, and we have a new tote bag.
Audrey: They’re using some fancy new Year 3 art that we have.
Christie: Okay, cool. Shop at recompilermag.com for that.
Audrey: Mm-hmm (affirmative).
Christie: Cool. The call for contributors for issue 10 is still open, right?
Audrey: Yeah, and it will be through January 1st. We’re really interested in hearing about science from all angles, different ways that people participate in it or contribute to it or think about science, especially as it relates to computing and software.
Christie: Cool. Is it recompliermag.com/participate on that one?
Audrey: Mm-hmm (affirmative).
Christie: All right. Cool. I’m a little tongue-in-cheek excited, but for the first time, one of our main topics is actually going to be Bitcoin. I think we probably both have curmudgeonly feelings about Bitcoin, which is possibly why we haven’t talked about it yet, but …
Audrey: And not knowing what the angle was that would be interesting. There’s the whole “What is Bitcoin,” which I believe we’re going to discuss, but after that, it’s like, “And then what? What do we do with it?”
Christie: Right. I know that it is hitting the mainstream, because a couple months ago, my mom was like, “I just watched this really interesting documentary on Bitcoin.” Of course, it is having this meteoric rise in value right now, so markets, I feel like every night Marketplace talks about it, so it’s definitely … And they’re about the open a futures market for it.
Audrey: Oh, interesting. That seems like it will raise the value as well.
Christie: It will also enable speculation, right?
Audrey: Mm-hmm (affirmative).
Christie: I mean, when you first start getting these derivative financial products. Anyway, so-
Audrey: Yeah, that is a place where things get messy, fast.
Christie: Right. I want to veer us back from that, because we could spend hours talking about derivative financial products.
Audrey: We’re not that podcast.
Christie: Right, but go read The Big Short if you are at all curious, and then you’ll realize that money is this completely made up thing, and the world is totally ridiculous. When I heard the futures thing, I was like, “Oh, great. How soon are we going to have credit default swaps?” Anyway, but there’s new article going around from the Grist from Eric Holthaus, and I had seen this topic several times now, and I’ve seen it enough times that I was like, “Okay, I think there’s something to this, so I want to go look at it a little more.” The headline is, “Bitcoin could cost us our clean-energy future.” It’s basically talking about the energy required to generate Bitcoin, and to maintain the transaction ledger, basically to maintain it, and it’s a lot. It’s a lot of energy.
Audrey: When I read this, it made sense to me. I hadn’t thought a lot about the scale of Bitcoin these days. I think that if you paid attention at the start and then tuned out, which is reasonable if you’re not spending it, it might be easy to overlook just how big it is, in terms of transaction volume, amount of Bitcoin out there, desire to generate more Bitcoin.
Christie: Before we jump in, because I think there’s … If some of our listeners are like me and they’ve heard Bitcoin, and then they get the Peanuts dialogue, when the adults start, “Wah wah wah,” so Bitcoin is a cryptocurrency.
Audrey: Mm-hmm (affirmative), and then you have to ask-
Christie: That is a confusing term.
Audrey: No, I agree, because-
Christie: I also hear things like … There’s cryptography and encryption, so codes, but then I also hear things like crypto-fascist, and I get very confused about that prefix. I think recently I figured out that there’s a little bit of a dual meaning, and that when people say crypto-fascist, it’s like secret fascist, like covert, and that’s not exactly how it’s meant when you’re talking cryptocurrency, right?
Audrey: No, I don’t think so. I think it’s not that it’s secret currency, although the ownership can be secret. I think that the reason that it’s called a cryptocurrency has to do with the use of something called the blockchain, the specific process that is used to keep those ledgers that you were discussing.
Christie: Yeah, and actually, there’s the Grist article, which talks about basically … It gives a high level overview of the amount of energy required for these transactions, and then it links to this Digiconomist.net landing page, and it had a … I only copied part of it, but to me, it had one of the most clear definitions of what Bitcoin was, so Bitcoin is a digital asset, a digital currency, so it basically only exists in a digital form. You can’t hold a Bitcoin like you can hold a dollar or Euro or a bar of gold.
Audrey: There’s another … This might be getting a little bit too far in, but there’s another interesting part of this that, if you’re handling U.S. dollars these days, the amount of U.S. currency in circulation is not the same as the number of paper U.S. dollars out there, so there’s already, not exactly but-
Christie: Is it more or less?
Audrey: There is less physical currency. Well no, actually I guess that is the … I’m just thinking we’re not gold standard backed anymore, you know? That idea that those dollars are tied to a thing, there’s not … If you printed Bitcoin certificates, you’d be in the same situation as the U.S. dollar, except …
Audrey: … from who regulates it.
Christie: Right. You’re saying-
Audrey: It’s a pretty big deal
Christie: You’re saying to a certain extent all of our currency has a digital component?
Audrey: Yeah, right.
Christie: Meaning my bank account with First Tech, there’s not a box with my name on it that has cash in it. It exists as a number and this is what a run on the bank is when more people go to withdraw, to liquidate their assets on paper … I’m confusing things.
Audrey: Than what the bank actually has in the vault.
Christie: Right. Someone just had to do that. That happens occasionally. That’s when they do a … What do they call it when they do a bank shutdown? When the government says, “Okay, no, you can’t withdraw all your money or they do limits or something like that.”
Audrey: Yeah. It’s a situation that everyone wants to avoid.
Christie: The way Bitcoin works is that … I’m trying to find the best nugget in here.
Audrey: There’s kind of those two components like how do you make Bitcoin and then the other one is how do you transfer Bitcoin.
Christie: Right. You make Bitcoin by mining it. This is my-
Audrey: Air quotes?
Christie: No. You should tell me if I start to get this wrong because I’m still trying to get this straight. You earn, you meaning your computers, acquire Bitcoin by mining it and basically mining it is doing really complex mathematical computations. There’s something about a bunch of miners are doing these same calculations and they’re using a proof of work algorithm and so the first miner that solves this problem and then has it confirmed gets Bitcoin, right? Is that basically how it works?
Audrey: I think so, yeah.
Christie: Imagine it’s like you’re solving a really hard math problem and then you bring it up to the teacher and if you’re the first student then you get some coins.
Audrey: Every problem is exponentially more difficult. Early on, it was easy. Everybody could solve those problems.
Christie: They designed this thing about making it harder to ration the amount of Bitcoin. It says a new … No, those are transactions. Anyway, a certain amount of time goes by before some miner comes up with new Bitcoin and then the other thing I think is interesting about this is all the miners are basically … There’s a lot of duplication of work.
Audrey: Mm-hmm (affirmative).
Christie: Then there’s this other thing about … Because the person who designed Bitcoin wanted it to work without relying on trusting or relying as little as possible and trusting all the other parties in a network, right??
Audrey: I think this is the other reason that people call it a cryptocurrency.
Christie: Okay, because of the trust minimizing thing. Then the other things that miners do is that they add transactions to this ledger like when Bitcoin changes hands and then other miners double check that work. Do we have the basics?
Audrey: I think so, yeah. There’s a shared computational process that’s used to record entries, those transactions. I think when people talk about the blockchain, they mean that specific process.
Christie: That is-
Audrey: I mean not the generalized version of it but the very specific process.
Christie: That is … The one element of trust you do have to have is that the Bitcoin is code is open source that all these miners are running a legitimate source copy of the Bitcoin code, right?
Audrey: Mm-hmm (affirmative).
Audrey: I mean I think because everybody is double-checking it if there’s one node that gets a different answer. I mean I would assume that there’s some kind of reconciliation process there.
Christie: The process of producing a valid block is largely based on trial and error were miners are making numerous attempts every second trying to find the right value for block component called the [Nants 00:12:31] and hoping the resulting completed block will match the requirements. For this reason mining is sometimes compared to a lottery where you can pick your own numbers. It says the continuous block mining cycle and incentivizes people all over the world to mine Bitcoin. As mining can provide a solid stream of revenue, people are very willing to run power hungry machines to get a piece of it.
Audrey: My impression when I heard about it early on was that there was an assumption that fewer people would put the work in as it got more complicated, not that there would be lots of organizations that could find a way to get cheap enough power that they could keep going.
Christie: Right. It feels like one of those things unattended consequences like this is something that happens when you have … Bitcoin was created by one … We think it’s one guy. We don’t know who it is. It could be a consortium.
Christie: We don’t know their true motivations because there’s no way to check and I do think … I mean we see this all the time in technology where the externalities are just not considered or the external consequences. A comparison right now of Bitcoin, and keep in mind that Bitcoin is not the only cryptocurrency, it’s just one of the most popular us using as much energy as the country of Serbia and nearly as much as Denmark.
Audrey: That seems like a lot.
Christie: It’s a lot. It’s using almost 50% of the power that the Czech republic is using annually.
Christie: I’m just reading off these charts.
Audrey: I think the idea is that we will be using the current energy usage of the entire world within the next 18 months? Is that what I read on one of these?
Christie: Possibly. I didn’t pull that quote but you’re probably right.
Audrey: That’s a lot.
Christie: Yeah, it is a lot. It says, “Bitcoin’s biggest problem is not even its amount of every consumption but that the network is mostly fueled by coal, fired power plants in China. Coal based electricity is available at very low rates in this country.
Audrey: As long as it’s profitable I mean of course if you had access, you’d want to do this. I don’t know. I guess if the energy costs are subsidized in the way of not considering those externalities. Is this the cheapest way you could possibly make money?
Christie: Right, given the circumstances. There might be am entry threshold capital. There’s also a bit in here about by comparison how much money or how much energy does it costs to transact, Visa transactions and it’s just like, it’s a tiny fraction.
Audrey: I mean that really makes sense even if the same number of Visa transactions, Bitcoin transactions were happening. We understand that the Bitcoin transactions are inherently more computationally complex than our regular credit card transactions.
Christie: Right. That was intentional in the design and I haven’t read the original paper but we should go find it. I’m curious if there’s anything about energy requirement.
Audrey: Right. I don’t know. My general impression is that this has gotten way bigger than anybody necessarily would have expected.
Christie: You mentioned the energy being subsidized and that’s what hit me too is like to me it tells me that the true cost of energy isn’t reflected in it and this sudden and massive increase in usage in electricity for this one thing really makes that clear in a way that maybe a slower increase isn’t although there’s probably people in this field that have been talking about this for a long time.
Audrey: I know that at least in the US data centers are located based on energy cost. There’s a reason that we have Facebook and Google centers that are based out of Pendleton, Oregon and it’s because they have access to hydropower.
Christie: Right. It’s cheap.
Audrey: They offer all of those things at a pretty good rate. I’m just thinking it affects the geographic location of data centers all the time and there’s a lot of incentive for, say, Facebook Google to make the energy cost lower because they are still paying a market rate for that. It becomes very different if your country or your geographic entity, whatever it is decides to subsidize that power usage.
Christie: It makes you realize how complex it is of a thing. Anyway, I thought this was interesting and I really liked this Digiconomist site because it explains things really clearly and it also has a bunch of links to other articles. It’s linking to articles going back as far as 2013.
Audrey: It seems like there’s really a lot to dig into if people are interested in this topic and I mean I don’t know. I think that the design is really intriguing. I think that the overall goals of it are … It’s worth considering whether it makes sense to have a currency system that is based on not trust. Decentralized, there’s a lot of reasons to think about that but you do have to think of trust and centralization and control all in one package.
Christie: Right. There’s also this is proof of work. That’s what Bitcoin uses, was the first consensus algorithm that managed to prove itself but it isn’t the only consensus algorithm. More energy efficient algorithms like proof-of-stake have been in development over recent years.
Audrey: There’s some set of Bitcoin coalitions or consortiums that would have to agree to make that change?
Christie: Right. It says, “Bitcoin could potentially switch to a consensus algorithm which would significantly improve sustainability. The only downside is that there are many different versions of proof-of-stake and none of these have fully proven themselves yet.” What it doesn’t say is how the Bitcoin would switch because my understanding is that there isn’t a real coherent Bitcoin governance structure. In fact, when we were first talking about this, there was some issue that came up a couple years ago about something, some kind of decision point like this and I didn’t have a chance to go look it up but it was something ledger size or the … I don’t remember.
Audrey: Everybody had to agree to make a certain change together?
Christie: I think it caused a huge disagreement. I think there was actually some kind of fork. I’ll see if I can track that down for the show notes and maybe I’ll add a little addendum.
Christie: The last couple of days, there’s been a lot of talk about Patreon
Audrey: On the topic of currency and transactions and how people get paid.
Christie: I’ve seen people be like, “I’m going to start an alternative and it’s going to take Bitcoins.”
Audrey: Sure. I don’t know. There’s already one you can sign up for with the Brave Browser.
Christie: I don’t remember what currency they’re using exactly though? Do they make their own?
Audrey: No. I think they’re using Bitcoin.
Christie: People are have been looking at cryptocurrencies to address micro transactions and part.
Audrey: We should probably step back just enough to say that the reason that everyone is talking about Patreon is that Patreon made a change to how payments work and how transactions work where they’re going to automatically charge people who contribute to support somebody, a processing fee. If I normally give you a dollar a month, I’m actually going to spend a dollar thirty on it.
Christie: Right. It’s even more complex than that. Did you see the updated blog post they put out yesterday?
Audrey: Mm-hmm (affirmative).
Christie: They’re going to have the Patreon pay this credit card processing fees, right?
Audrey: Mm-hmm (affirmative).
Christie: That’s a change prior to what the creators were paying them. Then they’re unbundling transactions.
Audrey: Right. That pair of things, it really doesn’t make sense unless what you’re trying to do is generate more processing fees.
Christie: That is a side effect. I actually think that there’s a regulatory issue that they’re hitting. I think that they need to unbundle so that they don’t look like a money services business.
Audrey: That’s interesting. I have not seen anybody discussing that side of it.
Christie: No one is talking about it but me near as I can tell. I should rush to get a blog post up before one of the bigger outlets actually does. I read the Crunch coverage. I’m like, “You’re not adding to this.”
Audrey: You should definitely write this up because I’m not saying that address … It makes sense to me. I know that we’ve seen a lot of tech company. It changes like this because they’re hitting various kinds of regulation around how they handle money.
Christie: Here’s the thing. I am not an expert in financial regulatory structure but I have insatiable curiosity. Do you remember, [get tip slash credit pay 00:23:51]?
Audrey: Mm-hmm (affirmative).
Christie: They hit something like this and the way they were operating was they’re basically holding balances for people and then redistributing. That’s what you have to do if you’re going to bundle transactions.
Christie: The payment processor they were using went out of business or something like that and the process of trying to find a new one, they were trying to switch to Stripe and Stripe said, “We’re not comfortable with your business model because you look like a money transmitter,” which is regulated as a money service business. I’ve been trying to find a concise information about what are the specific activities that crosses into that money services business. I haven’t found that yet. It’s possible there isn’t like that’s what makes this stuff so complicated is that there often is this gray area and usually-
Audrey: An intersection of different activities that maybe when you put them altogether, puts you in that category?
Christie: Right. It’s usually not … I mean there aren’t regulatory elves that sit on your shoulder and tell you when you’re getting close to a gray area. It’s usually like someone responsible for paying attention to that liability with your own company says, “Hey, you got to change this or a regulator, a government person comes in and tells you.”
Audrey: I mean of course Stripe has a big incentive to make sure that they’re staying within compliance on this stuff.
Audrey: I mean this is their entire business so it would be very important for them.
Christie: I’m not 100% certain about this. This is just my theory. If part of what’s motivating this change and I’m not sure it’s entirely motivating this change. Part of it is though it’s not really on Patreon’s interest to be super clear about that, right?
Audrey: Mm-hmm (affirmative).
Christie: Hey, we’ve got an opt operating super legally for the last whatever and we have to change, right?
Audrey: Yeah. I mean I think there is a general sense that they’ve done something that their investors are concerned about even if it’s just about them being overvalued and needing to produce a lot more profit in there. I think that the general vibe is that this is coming from up in their board and up in their investment structure.
Christie: Yeah, maybe. I mean I’m not the biggest fan of venture capitalist but I think that the conspiracy theory, “Oh, they’re just lining their pockets,” is a little nonsensical in this case.”
Audrey: It’s pretty weird awkward rush to be doing just for that. I’m fairly cynical about companies like this do things.
Christie: It’s also end of the year.
Audrey: I mean if you’re looking at your end of year numbers, you might think that you need to show that you’re making some change.
Christie: We don’t know what’s motivating them and we can’t know that. I also think … They are generating a lot more transactions. I don’t think that’s a profit generator. I think that the consolidated fee structure might provide them some padding around the ups and downs of the payment processing but I don’t think that they’re lining their pockets with that transaction fee.
Audrey: I mean the thing that I keep thinking about is that there isn’t a way to make for any of us to make individual transactions really any cheaper than they are like if you go through a process like Stripe.
Audrey: I imagine you can get similar rates with PayPal these days. Credit card processing costs a certain amount regardless. Either you are giving people enough support that everybody gets an appropriate $5 out of it or you’re not. Then I can understand that they don’t want to run transactions of less than a dollar and that those dollar transactions are probably not a very good deal under this kind of system but it’s like everybody is sitting there asking for pennies on this side of the road and I don’t know. The volume matters. The volume really matters.
Christie: It does but also structurally. Low dollar transactions are very expensive in just … To me, I feel like the banks and the credit card associations are as much a part of this issue as Patreon is and I think that’s not … I see a lot of people saying, “Let’s go build an alternative and I’m thinking unless you go into set up a money services business which I think has significant cost and effort associated with it, you will run into exactly the same issues like I think there is a reason that everyone congregated around Patreon with this low dollar contributions.
Audrey: Nobody else was even willing to try it. I think that’s what you’re saying that it wasn’t a financial good deal sale. Nobody would have wanted to try it. If you go out and you start your own new service and you say, “All right. We’re going to be really here for the community, without getting a company like Stripe or another payment processor or to somehow assist you in that way, you can’t get a better deal.
Christie: Nope. I looked because people are like, “Let’s go to Drip which is owned by Kickstarter and I thought, “Maybe Kickstarter can arrange for similar payment terms for Drip as they get Kickstarter. Kickstarter does have a different fee structure for under $10. It’s 5% and five cents. I think if Patreon could do that, that would go a long way because then those dollar pledges … If you’re talking about dollar pledges, a difference between 5 cents and 35 cents really makes a difference. Do you know what’s one very different thing between Patreon and Kickstarter?
Audrey: No, tell me.
Christie: Kickstarter doesn’t take PayPal.
Christie: PayPal is expensive.
Audrey: I am so amazed about anybody willingly uses PayPal these days.
Christie: Do you want to know why though?
Christie: I try to avoid it when I set up the Authentic Engine shop. Europeans started asking me for it because they can’t all … There’s something about the way … It’s cheaper for them.
Audrey: Oh, interesting.
Christie: On some cases, they don’t have a credit card that Stripe actually works with or something. I don’t know the exact reason but for me that’s why I been able to …
Audrey: I do end up using PayPal to send money to people in Europe. That’s true. There are other services that I’ve used, PayPal is the cheapest for them. I mean so much of the stuff that we’re talking about isn’t cross-border. It’s just within the United States.
Christie: For a lot of people, PayPal is the default. I think in part … Why is that?
Audrey: It’s integrated with a lot of these small services. I mean I think PayPal has actually put a ton of effort into trying to get little … I’m thinking about the Ko-fi one, K-O dash F-I. Their thing says, “We’re officially a PayPal partner.
Christie: That’s Ko-fi? It’s not Ko-fi?
Audrey: I think it’s Ko-fi like buy me a coffee. Anyhow, I think that they’ve been actively pushing this kind of integration for these little services and they’re charging a higher markup for it. I know just from setting our stuff up that getting a Stripe account made absolutely the most sense because everything I use as a business use a stripe.
Christie: Yes. One of the things I also see is that I’ve been doing web development long enough that when I first started, you had two choices basically for credit card processing, PayPal and Authorize.Net. This is not so long ago like 15 years ago. I’m simplifying it. There may have been a few others but those were the two biggies. They were awful to use. I think Authorize.Net, you still had to get a merchant account.
Audrey: Yes. That was a big barrier for a lot of small business.
Christie: Right. Stripe is not that old. When did Stripe?
Audrey: You mean …
Audrey: I think it’s five years.
Christie: Right. I think some of PayPal’s domination of the market is just 2011. 2-0-1-1, 2011, okay. I don’t know why I just fret. I had to say numbers. That’s six years. That’s not very long.
Audrey: Sure. There’s this historical side of it. I don’t know. I see people posting PayPal Me all the time and I really want to tell each and every one of them, you’re paying way more in fees than you need to if you’re doing that.
Christie: Has Stripe made it so you can just send individuals money with an email though?
Audrey: No. What you need to do, you have to pay for some kind of a finance service. The one I use is only $9 a month. I mean if it enables me to get $20 that I wouldn’t have otherwise, for me, that’s worth it.
Christie: Right. I didn’t mean that as a reason not to do it. I think anytime you add even a step.
Audrey: Square cash is the one that I use for what you’re talking about. It’s just put my email in and send me money.
Christie: I think Square is about the same age as Stripe.
Audrey: Mm-hmm (affirmative).
Christie: Thank you, Wikipedia. I wanted to know about the geometric square.
Audrey: I mean, yeah. I understand that logo.
Christie: Square is older.
Audrey: A year?
Christie: 2010, yeah. About quite a year.
Audrey: I mean I don’t know. I think because PayPal-
Christie: Oh, no, 2009. I’m confused. There’s founded and then launched. Sorry. I didn’t need to interrupt you with that.
Audrey: Oh, okay. We’ve got this historical side too like why PayPal? Like I said, I don’t think the economics work at all for small creators in the US. I think that the reason that there are businesses like Square and Stripe is because they look at this, thought they could do better. We’re probably right about it, you know?
Christie: Yes. They absolutely do. Like I said, I initially didn’t add PayPal for my store but then people asked and it’s like, “Well, I would like to be able to take your money and sell you stuff.” If you only have the energy to set up one and PayPal is more expensive. Anyway …
Audrey: I mean I guess for me this is trying to get into the other side of it too which whether or not we like it, if we’re asking people for money on the internet, we are running businesses. It’s to our benefit to realize that and to start taking advantage of things that are meant for businesses to do that especially when I see people that are offering $25 portraits so that they can make rent. I just think a little bit of marketing business organization and you can do so much better than that.
Christie: Right. If you can summon up the activation energy to figure that out, yeah.
Audrey: I think that folks that are thinking about setting micropayment services, a really so much better service that you provide your community is to help them with this part of it.
Christie: Right. Yeah.
Audrey: I don’t think that fundamentally the problem is scarping micropayments out of the system. I think fundamentally the problem us that we still have media systems that funnel attention to the biggest outputs, to the biggest outlets, to the biggest starts that we are … The long tail effect is good for Patreon, it’s not good for me.
Christie: It’s not much micropayment but micro-attention?
Audrey: I guess, yeah. If those units have attention corresponded to dollars but I know I keep putting these blog posts where I’m like, “If you like this, send me a dollar.” Annuity sends me a dollar very rarely. I don’t have the analytics to know how many views I have to get before I get one dollar.
Christie: Do you think it would work better if you said if you like this post, give me $5 or give me $10?
Audrey: I don’t know. That’s a good question.
Christie: Did you see this … I should have put it, we should have put it in the show … Or I guess this article in the outline, the 2%-
Christie: Okay. I only scanned through it but I thought it was interesting, the income distribution, I thought was really interesting.
Audrey: On Patreon. Very few people are making any money on there.
Christie: My suspicion is that the people, these red bar grass at the further right on this income distribution you get, my suspicion is that those are the more expensive people to support on Patreon too per dollar or whatever.
Audrey: The people that are getting the least are the most expensive to support. Is that what you’re saying?
Christie: Yeah possibly. I’m going to walk that back a little bit just because I haven’t thought it through. One of the things I’ve needling about is, “I think I figured why they unbundle transactions. Why do they decide to force the transaction fees on the Patreon instead of the creator. Something clicked for me when I read their update where they share a bit if feedback from a creator that makes a significant amount of money and they were complaining about the processing fees. It occurred to me I think whatever analytical process Patreon went through, I think they determined that a satisfaction of the creator who the creators who bring in bigger amounts of income was the deciding factor that the satisfaction of the Patreons.
Audrey: The stuff that I’ve read over the last day I think does reinforce that. There’s something connecting in my head here about the midlist author problem that there’s a certain category of whether-
Christie: The what author problem?
Christie: What does that mean?
Audrey: In terms of book sales, there’s the top of the list that’s like Stephen King but midlist is most of the authors that we read. That we as people who really like books read. Midlist authors have this interesting set of problems around the amount of promotional attention they can get and their need to do just well enough on every single book to get the next book contract.
Christie: Time and time again you run into this issue where the market sirs a much smaller portion. The market doesn’t serve the masses. A lot of the times when there’s this mass eruptions of anger or discontentment, about a change to a service, it’s because of that, it’s because all these people started building audiences on Patreon, this community with this low dollar contributions but that’s not what was important, is important to Patreon’s business and so you get that misalignment.
Audrey: I mean I think that just brings it back to that micropayments and micro-attention thing too that if most of us have 100% audiences and not even thousand person audiences, the kind of service that you need is so different. [crosstalk 00:41:02]
Christie: It’s probably not going to be venture backed.
Audrey: Probably not, no.
Christie: Because it’s probably going to have much lower margin than a venture back company will demand.
Audrey: My takeaway is like if you really enjoy what independent creators do, absolutely help them with their marketing, help them with their outreach, tell everybody how much you like them because that’s often the missing piece for a lot of us that we just aren’t getting the word out there the way that we want to. Any payment system that you set up, you still have to have enough people coming into it.
Christie: Let’s see. We’ve got 10 or so minutes left. There is a little … We talked in earlier episode about ProPublica collecting political ads on Facebook, remember that?
Christie: They published an update on how that’s going. They built software and machine learning algorithm to collect and analyze these ads. If you go to project.propublica.org/facebook-ads, I’ll add the link in the show notes, you can see these ads and you can filter by terms advertiser, targeting and search. A couple days ago, I was looking through here and I could not get it to show me anything but pretty left ads. I was like, “Oh, that’s interesting.” Well, here’s some from Donald Trump. Then I started wondering who’s going to know what ProPublica is and who’s going to install these browser extensions to send the ads? I thought, “Oh, it’s probably mostly left-leaning people.”
Audrey: Right. They may have to do their own kind of outreach to get the other side of it.
Christie: Right. I asked on Twitter and I mean I didn’t get a huge response but some of them was like, “My extended family that is conservative has never heard of ProPublica. This isn’t going to reach them.” Maybe this is the kind of thing that if you have conservative relatives when you’re visiting them you can surreptitiously or not, I don’t know installed.
Audrey: It might be an interesting conversation to have over Christmas about media literacy and ads and tracking.
Christie: Right. I don’t know. I thought that was interesting. We were going to talk a little bit about Link Rep but I didn’t get my act together to bring up more cool stuff.
Audrey: We’ll have to come back to that then.
Christie: Let’s table that, yeah
Christie: I do want to talk about … Oh my gosh. We’ve got three more topics. Which of these last three topics do you want to talk about, Audrey?
Audrey: I want to talk about community built broadband and networks.
Christie: Okay. You’ll have to fill me on this.
Audrey: We’re talking the other week about net neutrality and-
Christie: The vote hasn’t happened yet has it or whatever they’re going to do?
Audrey: I think so. I think it may be next week. Next week, not from when people are potentially listening to this. I have to learn to get that right. Sorry. We’ve been talking about net neutrality and who controls the internet who has really not just ownership of it but the control over how it works. I had mentioned that I am seeing a lot of interest in federation and federated approaches to some of these things and in distributed approaches to these things.
Clearly, we are not the only people tapped into that conversation because Motherboard through vice.com is doing a series on this where they’re interviewing people and talking to people about their specific projects and I thought that was super cool and really right in our interests. I think folks might enjoy reading that.
Christie: Cool. I see this meet the people building their own internet in Detroit. It makes sense that there would be this ever going on in Detroit.
Audrey: I mean just to talk about the Recompiler for a minute, we have an article on mesh networking in our next issue in January. I’m really excited to have a couple of people writing about that for us and explaining more about how this works and how it could work.
Christie: We should try to get them interviewed.
Christie: Shop at recompilermag.com if you want to get that issue.
Christie: Cool. Was there a particular effort that really stuck out to you or resonated with you?
Audrey: The work that I’ve read about happening in Detroit is really interesting because they’re doing a combination of things not just around installing technology but training people to be responsible for the internet connection that they install. I like that they’re kind of working on a couple different parts of this problem, not just the technical infrastructure that gets people on the network but the social and economic infrastructures that maintain it help people use it and just create a sense of community ownership over what they’re doing.
Christie: Hey, no surprise. It is a joint project of Allied Media which we’ve talked about before because they put on the Allied Media Conference.
Audrey: Allied Media Conference. They’re doing some really amazing work in Detroit. I think that’s worth reading about.
Christie: We’ve talked before about how we think Detroit is a model city in terms of grassroots organizing and community based organizing to provide essential services as governments do SMS of it.
Audrey: No. I mean if you want to understand what happens after capitalism, in the United States, I think Detroit is a really great place to go and check out what people are doing.
Christie: Yes. Cool. Definitely, going to … All right. Everything on the internet, is that where we’re at?
Audrey: I think so.
Christie: Oh, crap. [crosstalk 00:47:45]
Audrey: I think it may be time. Do you have something?
Christie: I forgot to pick something. Let me look at my favorites real quick.
Audrey: I don’t have anything favorite that I didn’t do myself.
Christie: That’s not against the rules.
Audrey: One, I fixed the Atom feed last night on my personal blog. I’m very proud of that because I’ve doing a home breathing with [Chuckle 00:48:09] and I only look at it every three months. At some point, I updated Chuckle and I didn’t really at what was going on and so the Atom feed is probably been broken for a year and I fixed it. The other thing is I read a blog post about my feeling about Patreon and this whole problem of how we support people. I don’t know. I guess I want to plug that.
Christie: Did you publish it?
Audrey: Mm-hmm (affirmative).
Christie: Okay. Cool. We should include that in the show notes. I hope I can write mine about it too.
Audrey: I mean I really you do because I think it’s just interesting. We have completely different angles that we look at this from but I think we come to a lot of points of consensus about like how people could work from this and build something better.
Christie: Definitely. I don’t know. I have to figure out what is a good link for this but someone tweeted out a link to a book on archive.org and it is a Swedish book with a title I’m not even going to attempt to say but it has … Did I say Swedish? I meant Finnish. I’m really sorry. It has all these really cool stitch patterns here.
Audrey: Oh, yeah.
Christie: Do you want me to send you a link to a tweet? You probably don’t.
Audrey: You can.
Audrey: I’ll open it.
Christie: The tweet has the image right in it where as the archive is the whole book. This will make a sound because I’m going to do it through Skype. I thought this were really sweet. I don’t know how it would go about making them.
Audrey: Oh, man. Speaking of updating things, I have updated Skype at I have no idea where anything is anymore.
Christie: Maybe I should open Signal.
Audrey: Shoot. Where is my chat?
Christie: Signal is gone away. Where’s Signal? Sorry. Technical difficulties. How do computers even work? Did you find it?
Audrey: Yeah. Of course it’s through Present & Correct. They have a really great Twitter feed of just interesting design inspirations.
Christie: I’ll link to the tweet in the show notes so that you can … It’s at Present & Correct and it’s some British-
Audrey: They’re like a stationary shop.
Christie: Yeah. I think I need to go there next time I’m in London. Office sentries for the modern workplace.
Audrey: These are great.
Christie: Aren’t they cool? They’re colorful and geometric and stuff.
Christie: All right. I think that’s our show.
Audrey: Yeah. We have gone through one hour.
Christie: Yeah. All right. Thank you everyone for listening. Thank you, Audrey for joining me and there will not … I’m going to be out of town next week. I have a brand new family member to help take care of, so no live … We will publish just this episode, no live recording next week but we should be back the following week, I think?
Christie: Cool. All right. Thank you, Audrey.
Audrey: Thanks, Christie.
Christie: That’s a wrap. You’ve been listening to the Recompiler podcast. You can find this and all previous episodes at recompilermag.com/podcast. There you’ll find links to individual episodes as well as the show notes. You’ll also find links to subscribe to the Recompiler podcast using iTunes or your favorite podcatcher. If you already subscribed via iTunes, please take a moment to leave us a review. It really helps us out.
Speaking of which, we love your feedback. What do you like? What do you not like? What do you want to hear more of? Let us know. You can send email feedback to firstname.lastname@example.org or send feedback via Twitter to @recompilermag or directly to me, Christie, with an I, 3K. You can also leave us an audio comment by calling 503-489-9083 and leave in a message.
The Recompiler podcast is a project of Recompiler Media. Founded and led by Audrey Eschright and is hosted and produced by yours truly, Christie Koehler. Thanks for listening.