The Network Effects of Stories
The Birth of Living Stories, Part 4
The internet is not just a technological marvel but a cultural and economic phenomenon shaped by its underlying networks. These networks—whether open and protocol-based, corporate and centralized, or hybrid and blockchain-powered—define how we interact with information, connect with others, and own digital assets. Understanding these paradigms is key to grasping the future of the internet, especially as we enter the era of blockchain networks and the concept of “Story as Platform.”
The Open Internet
The internet is the world’s largest computer network—a vast, physical infrastructure of interconnected computing devices linked by copper wires, fiber optics, and wireless systems. At its core, it operates as an open network. Any device, or “node,” can join as long as it follows the necessary protocols such as the Internet Protocol (IP) or Transmission Control Protocol (TCP). These protocols, once formalized and widely adopted, become standards, ensuring seamless communication between devices. This openness, combined with its ability to integrate new technologies, has made the internet a foundation for global connectivity and innovation.
On top of this physical layer sits the application layer, where software protocol networks like the Web (HTTP) and Email (SMTP) reside. These are the tools we use to interact with the internet daily. The Web, for instance, enables the linking of content through billions of webpages accessed via browsers, while Email facilitates global communication. Both are examples of protocol networks, designed to be open, interoperable, and universally accessible. However, while the internet’s physical protocols provide the infrastructure, the application layer transforms it into a platform for communication, commerce, and creativity.
Protocol Networks vs. Corporate Networks
The distinction between protocol networks and corporate networks, wonderfully explained in the book ‘Read Write Own’ by Chris Dixon, is pivotal to understanding how the internet operates and evolves. Protocol networks, like the Web and Email, are decentralized systems where no single entity has control. They enable interoperability, allowing diverse devices and applications to work together seamlessly. These networks are foundational, open by design, and inherently scalable. They thrive on standards that encourage innovation, as seen in how the Web’s protocols (e.g., HTTP, DNS) enable billions of interconnected websites.
In contrast, corporate networks—such as Facebook, TikTok, and other social media platforms—are centralized ecosystems owned and operated by private companies. These networks also leverage the openness of the internet but create closed systems where user data and interactions are controlled within proprietary silos. While corporate networks excel at fostering rapid adoption and user engagement through network effects, they centralize value creation, capturing profits for shareholders rather than distributing them among users and creators. This centralization contrasts sharply with the ethos of openness and shared ownership inherent in protocol networks.
The rise of blockchain networks, however, introduces a new hybrid model, challenging this dichotomy by blending the openness of protocol networks with the value-alignment mechanisms found in corporate networks.
Blockchain Networks: The Best of Both Worlds?
Like protocol networks, blockchain networks are decentralized. They enable interoperability, transparency, and permissionless participation. But unlike traditional protocol networks, blockchains embed ownership at their core through cryptographic tokens. These tokens can represent anything—currency, assets, or governance rights—allowing users to own a piece of the network they contribute to.
This “ownership economy” is a paradigm shift. Where corporate networks enrich shareholders, blockchain networks distribute value to users and creators. For example, Ethereum acts as a decentralized platform that anyone can build on, while its native token, ETH, aligns incentives between developers, users, and investors. The result is a network where growth benefits all participants, not just a centralized authority.
Story as Platform: Building on Blockchain Networks
The potential of blockchain networks extends beyond finance into culture and creativity. Stories, the foundational element of human connection, can now evolve into platforms themselves.
Imagine a storyworld built on Ethereum or another blockchain, where tokens empower creators and fans to align their incentives and collaboratively shape a living narrative ecosystem. Instead of being confined to a single medium—a book, film, or game—the story is woven across interoperable digital spaces, with its characters, settings, and assets represented as programmable tokens. These tokens can take various forms: utility tokens granting access to story-driven perks or features, security tokens enabling fractional ownership of the broader IP, semi-fungible tokens representing certain classes of assets such as environments or props, and NFTs representing unique digital collectibles such as avatars and AI agents. Together, these tokens create a robust economic system that nudges participants to engage, build, and expand the storyworld.
Through token economies, creators can bootstrap network effects by incentivizing early participation and offsetting the initial lack of utility that nascent networks often face. For fans, token ownership isn’t just about financial utility—it becomes a gateway to meaningful participation. By providing tools, storylines, and digital assets, creators act as the “narrative leadout,” inspiring the community to co-create in ways that align with the storyworld’s goals. This decentralized, yet coordinated, approach allows real-time teams to scale not by centralizing control, but by distributing value and ownership back to their audience, ensuring that the story grows dynamically as a shared cultural endeavor.
For creators, this means new revenue streams and a deeper connection with their audience. For fans, it transforms passive consumption into active participation. They are no longer just readers or viewers; they are co-creators, building alongside the original creative team. Blockchain-based stories become platforms for collaboration, blurring the boundaries between creator and fan.
This shift creates a multi-sided marketplace for creativity, where fans, creators, and IP holders collaborate to push stories forward in ways never before possible. By amplifying the value of participation, each contribution enriches the ecosystem, further strengthening the network effects of the storyworld.
The Network State: Stories as Culture and Governance
The concept of the Network State, popularized by Balaji Srinivasan, takes blockchain networks to their logical conclusion. A network state is a community organized online but with aspirations of physical-world presence. It leverages blockchain technology for governance, identity, and economic coordination, creating a digital-first nation.
Now, extend this idea to stories. A rich storyworld, with its intricate lore, mythos, characters, and cultural artifacts, could evolve into a network state. Fans and creators, united by a shared narrative, form a cohesive community with its own economy, governance, and identity. The story becomes more than entertainment; it becomes the foundation for a unified culture that exists both online and in the physical world.
For instance, a storyworld like Star Wars could have its own blockchain-based tokens for governance and commerce, with fans voting on new story directions or using tokens to access exclusive content and assets. Over time, this decentralized fandom could grow into a network state, with its own virtual and physical spaces where members gather, trade, and live according to the values of the story.
Conclusion: Stories as the Next Great Network
The evolution of networks—from protocols to corporations to blockchains—reflects humanity’s shifting relationship with ownership, participation, and community. As blockchain networks continue to mature, they open the door to a new era where stories are not just consumed but co-owned, co-created, and lived.
This transformation challenges us to think of stories not as static narratives but as dynamic ecosystems capable of fostering cultures, economies, and even governance structures. Whether as platforms or network states, stories are poised to become the next great networks, reshaping how we connect, create, and share meaning in the digital age.