How can blockchain and Web 3.0 solve the evils of social media? In a two-part special, Forkast.News examines the potential and pitfalls of decentralized social media.
More than 2,000 people from around the world recently traveled to Lisbon for the first major global conference of the world’s fourth largest blockchain by market capitalization, Solana. “Breakpoint Conference 2021” hosted dozens of events. One announcement in particular probably stole the show: a US $ 100 million investment to help build decentralized social media apps on Solana. Seven Seven Six, the venture capital arm of Alexis Ohanian, co-founder of social media giant Reddit, partnered with Solana Ventures on what Ohanian called a “pivotal inflection point” in those early days Web 3.0.
The predecessor of this concept – Web 2.0, what we live with now – was born out of the advent of social media and the growth of e-commerce, enabling peer-to-peer communication of information in unprecedented ways. . Today, as cryptocurrency increasingly integrates into more digital platforms, some speculate that the nature of the Internet is shifting towards communication of value – Web 3.0. And as the primary point of contact with the internet for most of us, social media is no different.
“How to rebuild social networks? It’s done very well in the world, but the advertising model is pretty broken, it creates weird incentives, ”said Austin Federa, communications manager at Solana Labs, in an interview with Forkast. News. “The users of a platform do not own a platform; it breaks that relationship. And so, there is an inherently exploitative and rent-seeking model that is [intrinsic to] any sort of system built that way.
In recent times, scandals abound within social media companies, demonstrating this idea of corrupt incentive structures pushing platforms to prioritize profits at the expense of the well-being of their users – or even the society in its own right. together. Major concerns about the changing nature of the role of social media in society were first raised with Facebook’s involvement in the Cambridge Analytica scandal surrounding the 2016 US presidential election, where questions were raised about the how the company handled user information and the impact it may have had on this election. More recently, the company was rocked by a series of scandals, with company whistleblowers revealing that Facebook had knowingly played with its algorithms to present controversial content at difficult times over the past 12 months in order to maximize profits. .
“There was an old analogy that these social media companies were town squares – and they weren’t,” Federa said. “These are private, for-profit companies that mine your data and use it to sell ads. Yes, they bring you value in return for that, but if we’re really talking about rebuilding the world, rebuilding social institutions to exist in these open spaces that cannot be managed by any business, it has to belong to the community. , which must be built as a giant digital cooperative.
Federa and others argue that a decentralized social media platform could solve many of these problems. Decentralized hosting takes control out of the hands of the privileged few and distributes ownership and responsibility across the community. Integration with cryptocurrency allows content creators to gain directly from the community, reducing reliance on advertising as a content engine. Non-fungible tokens will enable the ownership and sale of digital assets and further integration with games and metaverse. What not to like?
“Web 3.0 is going to blur a lot of those distinctions because they were really business unit distinctions,” Federa said. “These weren’t necessarily inherent product distinctions. ”
Changing the incentive structure
Of course, there are platforms that are trying to live up to this philosophy right now. “Voice” is an NFT platform trying to bridge the gap between Web 2.0 and 3.0 and allow a community to flourish around the creators who use their platform. Launched in January 2019, the company initially aimed to become the first social media platform to have a governance token approved by the United States Securities and Exchange Commission. Sadly, between a change of administration and time constraints, this plan ultimately fell through, but not without the team learning a few things along the way.
“What we’ve discovered is that the future of social media isn’t just a token version of Facebook,” said Salah Zalatimo, CEO of Voice. Forkast. News. “What we have achieved after a year and with the emergence of NFTs is that crypto and blockchain actually allow us to do better things. That’s the definition of disturbance, right? The blockchain has so much power that for us, simply innovating on social media was not enough. And honestly, we didn’t think it would be enough to bring people in, to make people change. But what if we can use blockchain and NFTs and the potential to completely disrupt social media as it is today and make it obsolete? Well, now we are talking.
Through their ability to convey value digitally, Zalatimo sees NFTs putting economic value and governance back into the hands of communities – enabling micro-communities to become self-reliant and gain interest in the value generated by their own. users through appreciation. Once this capability is introduced, suddenly there is a massive platform of engaged users, all of whom have contributed and can share in the benefits of the network.
“We believe the near future of social media is a much more disaggregated and decentralized ecosystem of micro-communities, all powered by independent tokens and a blockchain, both non-fungible and fungible tokens,” Zalatimo said. “So, so, yes, we are a social media platform, but not in the sense of Web 2.0. It’s in the future Web 3.0.
But not everyone thinks all of this is necessary to make the changes people want to see in social media. Launched over 10 years ago and with over 55 million downloads, “You Now” is one of the top 50 social media platforms focused on live video streaming. Based on a subscription model, the on-premise economy relies on users giving ‘freebies’ to content creators, which translates into ‘likes’, which can in turn be shared with other content creators or cashed in against fiat. By using this funding model, he doesn’t have to depend on advertising, which drastically changes the incentive structures for content creators on the site.
“There are no ads on the network, which means our creators don’t have to go for things on a large scale,” said Jon Brodsky, CEO of You Now. Forkast.News. “You go to any other video-driven social network and they basically do whatever they can to be as extreme as possible so that the algorithm gets them back and they keep going. This is not our point. We’re talking about real human relationships and the people you enjoy spending your time with.
Brodsky added that because content creators are paid directly by their subscribers rather than a percentage of platform-wide ad revenue, creators on You Now can earn as much, if not more, than creators on. other sites that may have a larger model of viewers or subscribers. Because they are “paid what they are worth”, as he describes it.
Cryptocurrency supporters might look at this situation and think there was a perfect opportunity to introduce a governance or utility token into this on-premises economy. You Now had tried this system, but it hadn’t worked very well for them. For many years, You Now has been integrated with Props, a third-party protocol that allows platforms to embed community tokens into their own services. Thanks to props, you have now enabled users to earn tokens and have stakes in the same way a decentralized Web 3.0 platform would.
Until the program’s cancellation in mid-October, the Props protocol was based on the usual business model of paying creators through fiat and the giveaway system. Brodsky believed in the product, saying it had “all-star backing” and was fully SEC regulated, but there was only one problem.
“It didn’t work,” Brodsky said. “It wasn’t a huge driver for the general public. When we looked at it, there were definitely some people who are crypto heads who really liked it, but it was a small percentage of our user base, just like it is a small percentage of the global population.
Cryptocurrency analyst firm Triple-A found that global cryptocurrency adoption was averaging 3.9% globally in 2021, albeit with the explosion of the popularity of crypto during the year, this number is expected to increase dramatically.
Despite the relatively low level of engagement with the product, You Now was happy to continue using the protocol, but unfortunately due to declining business on their end, Props canceled the partnership. A similar story follows with a similar protocol called Ken, with both still operational but on a small number of networks.
“[It] was not capturing the imaginations of users on a wide variety of networks as you would expect, ”said Brodsky. “It makes me pretty cautious when I hear about decentralized social media. “
Part 2 of this two-part series, which will explore moderation and concerns about transaction speeds and selling the concept to the public, will be released later this week.
