Will Blockchain Have A Role To Play In Social Media?
After more than a decade of ferocious competition, ignominious failures, massive acquisitions, and privacy scandals, the social media landscape has settled down somewhat. Facebook has survived the rise of other social networks (by acquiring them, in the case of Instagram) and serious scandals over Cambridge Analytica and how it manages its users’ data. Twitter’s user figures are up and down but the site is still well respected, and Snapchat still corners the youth market.
Facebook, Instagram, Twitter, Snapchat — the most popular networks — have now been at the top of the pile for what is, in the context of digital business, a very long time. We’ve seen contenders cause a buzz on a fairly regular basis, but none have seriously looked like toppling the established leaders. What happens, then, when a new technology emerges that some are comparing to the internet itself in terms of its potential impact?
Blockchain technology is developing at a good pace, with new potential applications popping up seemingly every week. From the insurance industry to smartphones, blockchain is seeping its way into various areas of life as it finds a way to scale and enter the mainstream. But what impact could blockchain have on social media?
Facebook Creates A Cryptocurrency
Unsurprisingly, Facebook is throwing its considerable hat into the ring to position itself as key players in the future of blockchain. Rather than revealing plans to host part of its network on blockchain, though, Facebook is pursuing a cryptocurrency, reportedly called GlobalCoin.
Set to be formally launched in 2020, GlobalCoin will apparently allow users to make transactions through Facebook itself and may well allow Facebook employees to be paid in the cryptocurrency if they so wish. It will also, it has been reported, set up physical portals at which users can buy the coin. Twitter is reportedly “looking into” the potential of blockchain, but it is Mark Zuckerberg and co that are way out ahead at present.
New Entrants See Value In Blockchain
Away from the already established social networks, new blockchain-based offerings are popping up looking to spearhead a shift. Startups like Steemit, Block.One and Sapien are all creating promising social networks built on blockchains, with all the benefits to security and functionality that can come with that. In fact, despite each one having its own functionality and bearing a passing resemblance to an existing social network, most of the blockchain-based new entrants are promising similar things to each other.
Utilizing blockchain technology to give users greater control over their personal data is a common theme. This is clearly in direct response to the likes of Facebook repeatedly mismanaging user data. The majority are also attempting to lure content creators by rewarding them in token form, a technique used by countless “traditional” companies looking to topple Facebook by offering greater control over each user’s content.
Block.One has poured $150 million into its new social media platform Voice. Sapien pulled in $11 million in one funding round in early 2018. There is enough funding in the world of blockchain for these startups to provide longer-lasting competition than social media startups we’ve seen in the past, with a product that will only get easier to sell as blockchain becomes more of a household name.
Established Incumbents Will Be Tough To Topple
This all sounds promising; Sapien and Block.One has highlighted some of the biggest problems users have with social media and harnessed decentralization to address them. The problem with this approach is that this does not guarantee that anyone will be interested. The social networks still have to be fun, work well, target the right audiences, and keep people interested.
As one of the most competitive industries, given the size of the leaders, a new social network will have to offer something more than the eradication of fake news to maintain a user base. Even for relatively successful launches like Tsu and Vero — the former claimed to have 5.2 million users when the service ended — it is famously difficult to hold onto users and stop them going back to the established giants that they’re familiar with (and, crucially, where their friends are).
Sapien and Block.One may well find their niche among the tech community, though, along with those more interested in being paid to create social content. With regard to mainstream appeal, it will take blockchain technology becoming a part of daily life and the public becoming fully aware of its benefits for social media sites based on it to flourish. These are just two examples, too — just about every social media site you know has at least one blockchain-based equivalent waiting in the wings.
Blockchain will need to reach a point at which it effectively scales before any form of social network based on the technology can take off. Unlike some industries, social media is reliant heavily on a scale, with no metric more important than user figures. Unfortunately, blockchain is not fit for purpose just yet. Issues with scalability, privacy, and security are slowing down blockchain’s adoption with large-scale projects likely to have to wait.
Any new social network, blockchain-based or otherwise, will have to compete with the powerful industry incumbents that have seen off so many new entrants already. The success of networks like Sapien may well be reliant on the success of blockchain, though — if decentralization and not being beholden to monolithic entities becomes important to the average user, there’s no reason that blockchain-based equivalents to existing household names can’t find a place in the market.
One industry in which blockchain is already making an impact is coworking. At Primalbase, our offices in London, Berlin, Amsterdam, and New York are powered by blockchain technology — come and see for yourself.