By 2021, the number of active social media users is expected to reach a mind-boggling 3.02 billion, with over a third of the world’s population using social media platforms it’s important to discuss the downsides of this new digital landscape and how novel technologies like blockchain could potentially revolutionize this space.
Currently, the market is dominated by one company, Facebook with over 2.3 billion users. For the perspective of the influence Facebook holds, of the six social media platforms that have over 1 billion users, Four of them are owned by Facebook. Shockingly one of the most popular social media giants has also been involved in a slew of scandals related to user privacy and data leaks.
Hence the important question here is, could a startup usher in a new era of social media that promotes data security and transparency while respecting user privacy? Let’s consider the possibilities
What’s wrong with the current version?
Even though social media companies have amassed billions of users on its platforms, the enterprises are losing their edge as some users are increasingly more discontent with how these platforms function. Spearheading this group are content creators who have been disproportionately compensated for their valuable work, that educates or entertains users who consume content.
Data privacy is another key factor why users are discontent with current social media platforms. Unless you live under a rock, hackers leaking private user data from social media platform should come as no surprise. In retrospect, social media giants like Facebook with over 2 billion active users have been accused in several high-profile data scandals including the infamous Cambridge Analytica case, in which the company was accused of revealing sensitive data of over 87 million Americans to a British political consulting firm that worked for Trump’s presidential campaign.
Social media platforms like Facebook have been criticized numerous times in the past for providing sensitive data of its users to enterprises. Enterprises use this data to understand an array of behavioural sciences characteristic to each demographic and leverage this knowledge to push advertisements of products/ services which you are most likely to buy. The business models of all ‘free’ social media platforms like Facebook depends on ad revenue and this is why it’s so difficult to respect the privacy of users on these platforms.
“If you’re not paying for something, you’re not the customer; you’re the product being sold.”- Andrew Lewis
On top of all the data leak scandals, invasive user privacy laws and disproportionate reward systems there are several reports which reveal the deteriorating effect social media has on the mental health of users. The studies have found a correlation of high social media usage with depression, anxiety, loneliness and even suicidal tendencies. Considering all these factors it comes as no surprise that many users are choosing to leave social media platforms.
Now, what is blockchain technology? And how can it mitigate the array of problems that users face social media platforms?
Enter blockchain technology!
Blockchain technology was created nearly a decade ago and is the core technology behind the sensational cryptocurrencies which taking the world by storm. Blockchain is a distributed ledger technology (DLT) that created a ‘ block’ for information stored or processed. Every transaction made on this ledger has to be approved by the entire chain or is inherently decentralized and this feature makes the technology more secure and transparent than current systems.
If social media platforms could integrate or completely adopt blockchain technology and make a revamped social media 2.0 it could prove profoundly beneficial for users. Let’s consider the possible use-cases.
- Augmented user privacy
The benefit of a blockchain powered social media platform will be instant as users could possibly send messages, make transactions and start a crowdfunding campaign securely as all the information will be stored on a blockchain network. The inherently decentralized nature of blockchain technology makes it incredibly difficult for hackers to access this data.
- You are not the product
Content creators and users could benefit immensely from this new era of blockchain powered social media platforms, as users are no longer the product. Content creators could get fairly compensated in cryptocurrencies for creating and distributing valued content instead of the platform absorbing a lion’s share of the revenue.
- Promoting authentic users
The slew of new blockchain platforms could promote user accountability online by making identity verification easier thus preventing any fraudulent activity on the space that could compromise user privacy. Cases of identity theft and fake content could be a thing if the past. On top of this, authentic users could also get compensated for watching an advertisement which is a radical idea in the space of marketing and advertising.
Has the era of new social media platforms already begun?
Social media platforms powered by blockchain are among the top industry sector in the entire blockchain space. There have been as much as 124 ICOs in this space and combined these startups have managed to raise a whopping ~$2 billion (Source)
Funds raised ($MM) by various sectors
The top five ICOs in the space collectively raised ~94% of all funds raised in this space amounting to $1.834 billion. The following are some of the projects that exhibit great promise.
Sapien is a democratized social news platform that aims to reinvent social media from the ground up and managed to raise $20 million during its Initial Coin Offering (ICO). The company aims to refocus social media from financial gain to one that champions the users.
Steemit is the first social networking platform built on the steem blockchain. It’s decentralized platform rewards content creators for creating, distributing content and growing a community of followers. Steemit’s platform is at its core a points system and since this these points are on a blockchain network, they can be traded with other users.
Patron is a Japanese startup that aims to boost the social media influencer market which is valued at over $1 billion and is expected to grow even more. The company managed to raise as much as $70 million during its Initial Coin Offering, it’s business is radical as it aims to streamline the influencer market.
Facebook fights back
Facebook is one of the top tech giants in the world with deep pockets and top-class engineers, quite unsurprisingly it’s exploring options into blockchain technology before it gets blindsided by the competition. Recent events are suggesting Facebook is quite serious about the technology, including-
- Facebook is exploring how to integrate blockchain technology into its login and data-sharing systems, according to a report by Forbes.
- Facebook acqui-hires Chainspace employees (Source). Chainspace is blockchain startup that aims to augment the technology beyond its current use-cases to new frontiers. Comprising of researchers from University College of London, This deal is a clear indication that Facebook is exploring how to integrate the technology to its platform.
- Last year, Facebook revealed plans of developing a stablecoin on its messenger platform to target the Indian remittances market.
Can Facebook be blindsided by a startup leveraging blockchain technology? The chances of that happening are slim, mainly due to Facebook’s massive and still growing user base and technical prowess which enables the company to stay ahead of the competition. Having deep pockets also helps the company fund research or merely acquire the intellectual property of startups.