May 14, 2012

Coil: Building a New Business Model for the Web

You are all reading this on Medium, a beautiful blog site that’s struggling to figure out how to pay its top contributors. This problem isn’t new. It’s what Ethan Zuckerman called the Internet’s “original sin”, the fact that on the web there isn’t an obvious way to make money outside of workarounds like advertising, paywalls, or selling user data.

Have you ever given up on a website because your browser slowed to a crawl rendering ads? Have you not been able to read a news article because of a paywall? Increasingly, the Internet has become a series of such dead ends and it’s only getting worse.

“Welp, too many ads I guess…”

At the same time, we’re beginning to reckon with the consequences of having our attention sold to the highest bidders who rarely have our interests in mind. This can range from mildly embarrassing such as The Atlantic’s Scientology “advertorial” to deeply concerning such as foreign influence in democratic elections. One might recall Tim Cook’s prescient observation about “free” services: “You’re not the customer, you’re the product.”

For decades, people have discussed the potential of micropayments to support content creators that would move us away from the broken ad-supported web. Others have created subscription services that bundle content. But micropayments and subscriptions have always been built as closed systems, which fail to capture the huge variety of content on the web.

Refactoring the Web Economy

We need an open marketplace that makes it easy for everybody on the web to compensate and support one another: the curators, the subscription services, the content creators and, of course, the users.

Since joining the Bitcoin community in 2010 and later Ripple in 2012, my ambition has been to build a world where currency moves as frictionlessly as information. I’m realizing more and more that just building the rails is not enough. There are entire new industries that this technology could enable and a key ingredient is to inspire people by showing what these new tools can do.

Imagine an open protocol that provides a third option outside of the advertising and site-by-site subscription models.

One of the reasons the ad-supported model is still so dominant is because payments technology wasn’t ready yet. Each payment currently requires multiple steps just to authorize it, let alone signing up with different merchants. We’ve worked with Microsoft, Google, Mozilla, and others to create the W3C Web Payments Request API that has been rolling out to billions of iOS and Android devices but we can go so much further. With the technologies we’ve helped build at Ripple — XRP and Interledger — we can process trillions of transactions per second without any central authority. What if we managed to apply these tools as a way to offer an alternative to today’s ad-supported web? Imagine an open protocol that provides a third option outside of the advertising and site-by-site subscription models. We think there’s a huge opportunity to grow a web industry that is collectively bigger than today’s monopolies, yet much more diverse and distributed.

One Small Step…

And that’s why I will be stepping down as CTO of Ripple to set up a new company called Coil. Coil will use Interledger to make the web a more vibrant market for apps and content, where everyone’s contributions are rewarded. We will be based in San Francisco and two amazing people who have conceived and supported this vision for years, Chris Larsen and Evan Schwartz, will join me as board members and guide us on this journey.

Coil will build on Interledger.

Coil’s first product will be a flat-rate subscription for consumers which will allow them to support creators, breeze past paywalls, see less ads, and unlock additional features and content. Instead of building yet another proprietary platform, Coil will be the first company to pay out to any website using Web Monetization, a new standard for how browsers can pay websites using Interledger. We’re excited to see how users will react to being able to support creators directly and how creators will reward them with extra features and content.

We don’t have a launch date yet but you’ll see something soon. We’re fortunate to have strong financial and technical backing from Ripple, who are the lead investors alongside myself. This gives Coil everything we need to kickstart a healthier Internet.

If you are interested in learning more, sign up at and we’ll keep you posted.

Stefan Thomas
Founder at Coil, formerly CTO at Ripple

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