Coinbase What potential does decentralized social media have?

Original: “The potential of blockchain to power the future of decentralized social media” by Coinbase Institute

Translation: Lynn, MarsBit

Social media platforms are still very popular, but users are becoming increasingly dissatisfied with the control that big companies have over their online social lives, whether it’s strict control or personal data collection. The recent launch of numerous alternative applications (such as BlueSky and Threads) reflects this dissatisfaction. Coinbase Institute’s new introductory book explores the potential of cryptocurrency and blockchain to power decentralized social media, which is an innovative social networking model that embraces the web3 vision of an internet owned by its users. Although still in its early stages, “DeSoc” has already spawned numerous decentralized applications and attracted millions of users interested in its vision of an on-chain social network.

At Coinbase, we are working to update the financial system by building trusted products that enable scalable cryptocurrency utility and adoption, because we believe that cryptocurrency and blockchain technology can increase economic freedom and opportunities worldwide. Coinbase chose to become a publicly traded company in the United States because we believe that embracing this fundamental innovation will best serve the United States, but we also pay attention to international markets, many of which are advancing strategies to become “cryptocurrency hubs”. We hope to see the United States take a similar approach, but the enforcement and regulatory approach in the United States has instead led to a disappointing trend in the development of cryptocurrency. One of the many promising innovations in the United States is decentralized social media (DeSoc).

Traditional web2 social media platforms have changed the way people communicate by connecting people from around the world. Over half of the world’s population uses social media, and the most popular sites generate billions of dollars in revenue. But these sites also bring traditional “web2” problems: large tech companies ultimately own the content created by users, and content moderation teams can remove users from the platform, delete years of content, and immediately sever the connection between creators and fans. Companies also profit from tracking and selling user data, and closed systems hinder innovation by third-party developers.

The DeSoc network has the potential to address these issues using blockchain technology and other web3 features such as tokens, pseudonymity, and decentralized governance. In short, the goal of DeSoc is to ensure that users have a direct relationship with their audience and with each other. Users can create accounts without providing personal information such as their name or email address. They can join specific platforms that align with their interests but still freely communicate with users from many different websites using their decentralized accounts. Users determine their own content moderation policies. Users who want to leave the platform can easily migrate their account data (including their username, posts, and followers list) to other websites.

Specifically, DeSoc applications offer numerous benefits that protect privacy, support creators, and stimulate innovation, including:

  • Freedom of speech and privacy. Many DeSoc networks allow users to post anonymously using identities that cannot be associated with their real names. Users are also less likely to be affected by content deletion and decentralization, as there is no central entity exercising such control. As records on the blockchain are immutable, DeSoc networks provide built-in tools for users who want to verify their real identities across multiple platforms.
  • Ownership and monetization. Many DeSoc applications rely on native tokens instead of advertisements or data tracking to raise funds. They then reward user participation by distributing additional tokens for posting or engaging in conversations.
  • Innovation. Most dapps are built using open-source code, which means developers have unrestricted access, modification, and building of existing code. This encourages collaboration and accelerates innovation.

Meta recently launched its own microblogging application called Threads, attempting to leverage at least some of these benefits. While Threads looks and feels similar to traditional social media websites, Meta states that it will be compatible with ActivityPub, a decentralized social networking protocol that allows accounts to be hosted on independent servers. This decentralized structure enables users to have better control over their data and easily interact with other networks on the same protocol.

DeSoc networks face specific challenges related to usability and content moderation. For example, their distributed nature may make it difficult for users to find specific friends and content. The sheer number of website names can be overwhelming for search and navigation. Sometimes, the moderation approaches of individual sites may result in de facto content moderation for the entire network. For these reasons, policymakers understanding DeSoc networks and the regulatory areas they involve is crucial. Specifically, DeSoc applications have raised concerns about the potential spread of misinformation and propaganda, as well as the responsibility of decentralized protocols for illegal or harassing speech (if any). They also lack regulatory clarity on data protection and consumer disclosure requirements, as well as the tax implications of token transactions.

Like all decentralized applications built on blockchain, DeSoc applications have the potential to increase freedom and opportunities worldwide by granting creators more ownership and control over their content and networks. Blockchain is a groundbreaking technology that enables direct peer-to-peer sharing of information and brings forth a variety of use cases that benefit from blockchain efficiency, transparency, and accessibility. In the world of the blockchain, transparency and trust are built into the decentralized protocol itself, and these protections will only be strengthened as the technology evolves. Therefore, lawmakers and regulators focusing on social media should direct their efforts towards centralized participants that require additional transparency and information disclosure.

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