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This article was published on January 26, 2018

Webcam girls are now — you guessed it — on the blockchain

Webcam girls are now — you guessed it — on the blockchain
Jamie Tolentino
Story by

Jamie Tolentino

Jamie Tolentino is currently working as a Digital Marketer at a Global Asset Management firm. She was previously an Innovation Strategist at Jamie Tolentino is currently working as a Digital Marketer at a Global Asset Management firm. She was previously an Innovation Strategist at Quirk London. Aside from writing for TNW, she also blogs on the Huffington Post UK.

When we think of blockchain, we usually associate it with financial services applications. However, blockchains have a multitude of applications and can be used in a variety of fields. It is, therefore no surprise that it can be used to power a new generation webcam platform such as Live Stars, that offers security and anonymity to its users.

The webcam industry landscape

Although the webcam industry has evolved from a small adult entertainment niche into a multi-million business, all existing webcam platforms present a number of fundamental problems regarding payments, security, and anonymity. Innovations in the webcam industry are therefore necessary to for achieving progress.

The webcam industry is the most technologically advanced branch in online porn. Models (usually, women) talk to video chat users and, for additional payments, pose, strip and perform sexual acts. Normally, models use their own funds and resources as all you need is a web camera, internet access and a room. However, there also exist specialized studios where several models can work at the same time. Webcams differ from the offline part of the sex industry and porn videos in that there is no physical contact between the model and the client and all the payments are non-cash.

Behind the scenes of the model’s webcam

Behind every model, there are a variety of intermediaries involved including agency owners, studio managers, and staffed internal transaction platforms. Each of these intermediaries takes a share in the models’ earnings, leaving the model only 20-25 percent of what her client paid. Activities of webcam platforms are also supported by numerous staff who are responsible for checking transactions, checking models comply with site rules, payments, technical support, marketing, and moderation. These staffs create huge overhead costs resulting in the platform requiring around 60 percent commission from payments.

Aside from the low percentage of earnings received by the model, the model has to earn a minimum required sum, usually $50 to get a payout. It’s worth noting that 99 percent of male models don’t even meet this minimum. In the instance where this threshold is met, most sites transfer payment within a strict period of time (mostly once a week, on a certain day). During this time, the model’s account is being checked for possible fraudulent activity. As a result, earnings of models can be blocked by the administration until all circumstances will be clear or payment can be completely denied. LiveJasmin for example pays the models 20-25 days after the end of the two-week period.

Issues with current webcam platforms

Since there are many intermediaries and steps involved in the payment of models, there is a lack of transparency. Clients are afraid of identity theft and models are afraid of deanonymization, blackmail and threats of exposing their work to their friends and loved ones.

Current leading platforms such as LiveJasmin, Chaturbate, Bongacams and MyFreeCams always use some form of ID to verify the identity of their models and to ensure they are of legal age. Each platform also makes their own client database, collecting payment information about when, what for and how much each client pays, geolocation data and sometimes ID. As a result, security and anonymity of provided data completely depend on the integrity of the intermediaries. Unfortunately, as the intermediaries control payment and have personal information at hand, they can be used to blackmail either the model or client.

Blockchain ensures anonymity

By using blockchain, the Live Stars platform can improve this semi-legal and often dangerous field of work by assuring anonymity via the blockchain system and replacing internal payment systems with tokens. Tokens are a form of currency that is fungible and tradeable on a platform operating on top of a blockchain. Tokenization removes the need for intermediaries, which can solve the delay in payment issues for the models and create transparency.

In addition, when clients buy some internal platform currency that they haven’t spent yet, they cannot get their money back as platforms do not offer refunds or resales. It’s just like buying arcade token that you cannot be refunded or resold. With tokens, refunds can be offered.

Security of data storage and transfer in blockchain technology is above and beyond anything else we have today. This means that identity verification can take place but the model can remove any of their personal information from the system at any point in time, which is supported by the open source code. Personal details, after having been approved by management, will always be encrypted. This process ensures anonymity for both the models and the clients. More importantly, blackmail cannot occur.

Better wages for the models

Since blockchain cuts out the intermediaries, Live Stars can offer models 70 percent of what the client paid.  This is significantly higher than what current platforms can offer. All payments on the Live Stars platform are automated using the open smart contracts function, which completely eliminates the human factor. This significantly minimizes the risk of losing money. As a result, the models not only get paid more, but they can also be sure that they will receive the payment without delay.

In summary, Live Stars is creating a new generation webcam platform that implements blockchain technology. For the curious, you can check out the alpha version here. Live Stars already have agreements with a number of studios employing models of both genders. The platform has a transparent structure, cuts out intermediaries and offers a multitude of advantages such as security, anonymity, fast payments and higher model revenue compared to the incumbent platforms on the market.

By having these benefits in place, webcams could potentially be less porn-orientated and move towards just personal communication. Personal communication is what attracts clients to webcams in the first place. Currently, models feel pressured to have “mainstream” shows, shows that majority of clients are ready to pay for,  just to have enough income.

Bear in mind that they only receive 20-25 percent of what clients are paying, and also have a minimum payout threshold. However, with the conditions of a secure and open platform, they can produce income from providing services for a smaller audience. It can be just a friendly conversation or specific sexual interests. This would make the webcam industry less niche, more open and less taboo which would be a big win for the industry as a whole.