Play 2 Earn, Part 2: The Future of Social Media
The blockchain will redefine social networking and content creation.
This week, we’re going to explore a big picture idea for what the future of Social Media could look like. If you’ve spent a little time thinking about the possibilities, then you may already know what could be coming our way. But if you haven’t, then you may just have an epiphany realizing what the future holds. I was blown away when I first started comprehending where crypto could take social media. So let’s strap right in and get going.
Social Media Basics
By Elliot Koss
Technical Level: 🛠️
Before we talk about how crypto will forever improve the social media experience, we first need to review the general elements of social media.
If you’re in your mid-30s, then you probably know that MySpace was the first mainstream social media platform. Then Friendster was popular for a hot second before Facebook started its run to becoming the dominant social media platform.
Today, Facebook and Instagram (both owned by Meta) are the main social media platforms, but TikTok is becoming one of the most talked about experiences with their video-first, short-form content. Twitter, once known as the public forum to learn the news before it was published, has made a series of missteps that has reduced trust for most users while bolstering loyalty amongst a smaller group. LinkedIn has become the de facto professional network. And Snapchat’s limited visibility and lifetime of communications has made it useful and engaging for a large audience. YouTube and Twitch aren’t traditionally thought of as social media platforms since they blur the line with TV viewing, but by the standards outlined below, they are definitely social media platforms with some of the more unique revenue generation possibilities for content creators.
There are other social media platforms with new ones launching every year, but let’s focus on the largest ones for the moment. Also, let’s forget about the fact that to run a proper social media platform, you need a large enough audience to sustain the desire for constant interactions. Obviously it’s important, but it’s not material to this part.
All of these platforms have a few common features:
A user profile that allows anyone to have their own, personalized account.
Users can connect with other users who they know (requiring mutual approvals) or they can follow people (requiring only one-way consent).
A main feed of content that’s served up by an algorithm controlled by the platform and based on the user’s activity and connections.
The ability to create some manner of a post, whether it is written, image, or video.
Liking and sharing posts that others created to help amplify content.
Public-facing numbers quantifying how many people follow, like, or share content.
Of the main social media platforms, all are free and ad-supported. There may be paid features such as LinkedIn’s premium tiers that give job seekers and hiring managers more capabilities or Twitter’s subscription tier that helps amplify content, but both LinkedIn and Twitter still use ads.
When it comes to users generating revenue through a social media platform, this is usually only reserved for content creators who have a large enough audience to meet eligibility criteria.
The social media landscape provides a variety of ways for users to consume content. Each has their own suite of features and tools that users must get comfortable with using. And most users have one, maybe two preferred platforms that they use daily with accounts on the others that they check less frequently. Power users could be checking multiple platforms every day, spending hours of time plugged into these online worlds.
And the social media companies have made a LOT of money with this business model.
Limits Of Social Media Today
But there are some key limits to social media today.
For starters, all of the platforms are proprietary, so if you wanted to have an account on all the platforms to consume content, you’d need to set-up individual accounts and then check each app or website every single day. This can be time-intensive. Plus, you may be following similar people or brands across each platform, which means that you could be seeing a similar experience already.
One pesky detail is that you may want to get the same handle on each social media platform, but depending on when you joined, that may not be possible. So instead of having a consistent identity across all the social platforms, you have slightly different names and profiles. And when you want to make changes, you’d have to change each of the platforms individually to keep them all consistent. The benefit is that you can have a slightly different identity across each social platform, but there is no convenience to make these updates simultaneously.
If you’re a brand or content creator, you’re likely on each of the platforms cross-posting content that’s specific to each of the various platforms. There may be short-form content for TikTok, witty quips for Twitter, engaging posts for Facebook, and how-to videos for YouTube. You’ve optimized these campaigns with the various measurement tools available, and you’ve spent hours and days just setting up all the various data connections.
Creating (or simply consuming) content from one platform to another can be exhausting.
Then, what happens if one of the platforms changes the terms of their business. For instance, they tweak their algorithm for the feed and now your content shows up less frequently because they’re trying to get you to pay for ads or some subscription tier. What recourse do you have? Perhaps you change your focus to another platform, but you’ve spent a lot of time, money, and effort building your audience on this platform. Abandoning it brings you to a sunk-cost fallacy where you have to determine if the effort for the future is worth it and ignore the fact that you’ve invested all these resources to get to your current position.
Those are the most obvious limits, but the one that’s likely felt by the most users, even if they don’t realize it, is the fact that your data is being sold to advertisers and in exchange, you receive free access to the social media platform. As a result, the social media platforms have earned billions of dollars with public valuations totaling more than $1 Trillion (at their peak).
How Crypto Changes The Social Media Space
As we’ve previously discussed, the crypto wallet is not only where you store your money but it’s also where you maintain your identity. The identity piece may seem like an after-thought, but when it comes to social media, it’s the main attraction.
Web3 is the next iteration of the internet that is powered by crypto. In this new phase of the internet, instead of using your email and having to come up with a new password for every website / app, you’ll login with your crypto wallet. And because your crypto wallet includes your identity information that you’ve added to the blockchain (some publicly available, other encrypted that only you can unlock when you want to give specific platforms access), you won’t have to constantly input your information on every website.
This means that instead of having to try to secure your unique username on each social media platform, you essentially select your username in your crypto wallet and then bring that username with you to the various social platforms. So you don’t have to worry about trying to get the same handle, because it’s tied to your crypto wallet and there’s only one in the given blockchain. This presents new potential issues until one main blockchain and standard is adopted, but that’s likely something that will sort itself out in the next couple years.
Ok, so accounts are simplified. Big whoop, right?
Not so fast. This is simply the tip of the iceberg.
First, if you’re a brand or content creator, this simplification of accounts is actually a big deal. But there’s so much more.
When content is added to a social media platform, it’s added to the proprietary database of that platform. There’s a cost associated with these databases, so this makes sense. Facebook isn’t going to pay for content to be stored on their server when Twitter is getting the benefit of showing it to their users.
In the crypto world, the content can be added to a public database where the costs are shared on the blockchain. But there’s one new element that we haven’t gone into much detail, and that’s the decentralized internet. If you watched HBO’s Silicon Valley, then you’re already familiar with the concept of a decentralized internet. What I love about that show is that it introduced some powerful concepts in hilarious and highly relatable ways.
The high level for the decentralized internet, which is stored in IPFS format (IPFS stands for the InterPlanetary File System - learn more here), is that instead of data being stored on servers that live in the cloud, data is instead stored in nodes that are maintained by lots of computers across the world. The cost of maintaining the data is shared by all the people who run those computers, so instead of one person or company bearing the cost, we all share the cost which amounts to pennies.
Ok, let’s go back to adding content in the crypto social media future, because this is where the fun begins.
Now that we can begin storing content publicly, when you make a post or take any action, not only are you doing it via the social media platform where the content originated, but any social media platform that’s building on the blockchain could also have that content.
This means that you could post something on Facebook that does show up on Twitter. Assuming both Facebook and Twitter start using the blockchain.
Once this happens, the entire concept of what a social media company is will begin to change.
Accessing The Blockchain
If you think back to the early 1990s when Netscape was taking the world by storm with their novel internet browser, you’ll realize that how you accessed the internet was this commodity. The company that controlled your browser controlled your homepage which dictated your search engine and ultimately generated a load of advertising money for that search engine. When Internet Explorer became the default for Windows 95, Netscape’s business essentially evaporated overnight. Over time, browsers have become customizable to the point that you can use any browser and any search engine that you choose. Google has still invested tons of money making Chrome the preferred browser, because they can ensure that Google is the default search engine.
But the browser was a game-changer when it came to the internet, because it gave anyone the ability to access a new standard called the webpage. All of a sudden, the internet that you saw in War Games (where Matthew Broderick uses his phone to connect his command line computer to change his grades in school and eventually, accidentally hack the DoD) was transformed into something closer to Hackers (which has hilarious graphics representing code, but whatever it’s still a great film).
Social media may become the first main use case for consumers accessing the blockchain in a way that isn’t purely about speculating on currencies.
Instead of being locked into Facebook or Twitter or LinkedIn or TikTok or YouTube or whatever, you could access any piece of content in the way you prefer. If you’re looking for short-form video, you could get an assortment of the best content from across Facebook, TikTok, or YouTube. If you’re looking for breaking news, you could use Twitter or LinkedIn or Facebook to find written content that feeds your impulse. But all from the same location.
A single location to browse the entirety of the social media blockchain posts without having to switch platforms.
As you begin to grapple with this concept, you’ll quickly start to wonder why any of these platforms even move in this direction. Obviously the existing heavyweights in the social media space have a lot to lose if they begin putting their posts on the blockchain and then users start gravitating towards one of their competitors.
Exactly.
Just like Facebook killed MySpace and created the opportunity for all the other social media platforms to exist, I expect that a new, blockchain-first social media platform will come into existence with all the features outlined above and begin to steal market share from the existing heavyweights. Once that begins, the entire landscape will begin to shift and we’ll see all the current social media leaders try to adapt. Some will succeed, others will fail. It’s likely that acquisitions and consolidation will occur.
The other prediction I have is that this will all happen, because this new crypto-first social media platform changes the ad revenue model so that they’re sharing revenue with users. Figuring out the correct balance of incentivizing users to post, share, and create with providing revenue for watching and consuming ads will be a challenge, but with the rewards so high, there are already many eager entrepreneurs who are building this future. Eventually, someone will figure out how to make it work.
Next Week
There’s more that I could write on this topic since it’s clearly so rich with possibilities, but we’ll pause here.
And as I review what’s been written, I realize that I didn’t tie it back to Play 2 Earn. Haha. There’s so much to cover that I didn’t complete the round trip that is teased in the title! If you bear with me, I’ll make sure that we complete the connection next week.
Speaking of which, next week, we’ll begin to cover the truly complex topic of Tokenomics, a growing and new field that deals with managing the economic balance of a blockchain’s token. This is another essential part of Play 2 Earn, and one that will deeply impact the future of social media.
News of the Week
NFL Rivals, a mobile game that uses NFTs in the background for collecting and trading cards, surpassed 1M downloads since its debut on April 26.
Animoca Brands has parterned with Chess.com to create Anichess (launching in 2024). Anichess combines the core rules of a classic chess game with a so-called “spell mechanic” that includes a range of offensive, defensive and counter tactics. There will also be esports-like elements added through challenges.
Web3 streetwear brand Gutter Cat Gang is teaming up with shoe retailer Puma and NBA player LaMelo Ball to release the “GutterMelo MB.03.” NFT sneakers are paired with a physical real-life sneaker counterpart and will be available to mint on OpenSea on June 29.
NFT trader MachiBigBrother, has sued independent blockchain detective ZachXBT, after the on-chain sleuth published a report last year alleging Machi embezzled tens of millions of dollars worth of crypto. The lawsuit, filed on Friday in the U.S. District Court for the Western District of Texas, alleges ZachXBT defamed MachiBigBrother, "inflict[ing] serious reputational and monetary harm” on him.