Social Media Is Dead. Is Web3 Social the Answer?
New Web3 Social Media Startups Offer An Interesting Alternative
Social media CEOs have gone from heroes to villains over the last decade and it’s only getting worse.
Mark Zuckerberg is burning $40 billion on the metaverse. Elon Musk is running Twitter into the ground. And TikTok’s CEO was just flogged in front of Congress during a five-hour hearing.
Now, Congress is weighing a bill to ban TikTok, and there’s something extremely interesting about it. Mainly, that it wouldn’t fix anything.
Yes, yes — if you believe this is somehow about Chinese espionage on 150 million unsuspecting Americans, then I could see why you’d think that it might. But this is not about that, really. Because all of the data collection lawmakers all of a sudden seem to be worried about has been going on for more than a decade. At Facebook. At Google. And you can’t tell me that it’s fine just because … it’s American. That’s kinda … un-American.
In fact, even TikTok CEO Shou Chew had the stones to point out that exact point in Congress last week:
“American social [media] companies don't have a good track record with data privacy and user security. I mean, look at Facebook and Cambridge Analytica. Just one example,” Chew said.
The. Stones.
Watch Coinage’s Episode on Web3 Social ⬇️
And it’s a point that even some in Congress know to be true. Social media companies misusing and abusing all of our data for some pretty terrible outcomes is almost as American as baseball and apple pie at this point. And singling out TikTok just seems off. Even AOC posted (on Instagram) to make that point:
“[Banning TikTok] doesn’t really address the core of the issue which is the fact that major social media companies are allowed to collect troves of data that you don’t know about,” she said. Unfortunately, AOC then went on to advocate for some sort of American GDPR equivalent, which most argue was a failure in its own right. (Adding a check box that then allows companies to continue abusing our data hardly makes it consensual.)
So it begs the question, what might actually fix the issue?
Well, Web3 has offered a potentially market-changing alternative. That is, the notion that users should be in full control of their data online, and potentially, even ownership over the networks they are posting on.
New entrants like Lens Protocol, or Twitter-alternatives like Phaver (which is built on top of Lens) are some of the early challengers. Users create profiles that they own in the form of NFTs and write to the protocol with each post, follow, or like. All of these interaction are recorded on-chain and the experience is mostly the same, but everything under-the-hood is uniquely not at all.
Instead, users are in control of their data. Sure, they might be compensated for sharing that data with advertisers, but at least that’s more than just checking a box. They are getting compensated for the value they are bringing to the platform. And furthermore, users stand to gain also gain from the network effects of merely existing on a platform.
Facing what’s known as the “cold start problem,” social networks are notoriously hard to build from the ground up. We don’t want to join a new app unless our friends are on it … but neither do they. Instead of just building it and hoping they come, Phaver is planning to reward its earliest users.
In a Coinage interview linked to below, Phaver founder Joonatan Lintala explains that in their ecosystem, users can earn tokens by posting, and can earn even more tokens for interacting early with content that winds up going viral.
“A lot of the early users obviously are there because they see that if they're part of this now, then if this becomes popular, they will be rewarded and I think that's a fair thing,” he tells Coinage. “Like the first 100,000 active users should be rewarded because without them there would never actually be a platform.”
So far, Phaver says it has about 140,000 monthly active users. So that’s roughly 1,000-times smaller than just the U.S. activity on apps like Instagram. But, everything has to start somewhere.
And, if you think about all of the hollering and fanfare around the potential TikTok ban that now hangs in the air, it really is worth considering if it’s all much ado about nothing. In the end, if there is a better alternative out there that rewards users and puts their data and privacy first, it’s hard to see why that might not win.
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