Most people use Blockchain and cryptocurrencies interchangeably but they are two completely different concepts.
Blockchain is a decentralized database that stores information in large chunks called blocks which are interlinked forming a chain of data called the blockchain.
Whereas cryptocurrencies are digital or virtual currencies that are secured by using blockchain technology.
This technology creates a decentralized ledger where every transaction gets registered and timestamped in a node of a block that is interlinked to other blocks. Now every block of data is secured cryptographically which means the data or in this case, the entry in the ledger gets verified by a network of computers before making it to the ledger eliminating any concerns of hacking and data manipulation.
Now, you may be wondering what all of this has to do with social media, right?
Well, there are around 4.2 billion social media users as of 2021 and this number increases year on year along with the privacy concerns associated with these networks. This is where blockchain technology is being considered as a big opportunity that could help overcome the main concerns of Online Social Networks (OSNs). These main concerns include stealing personal information, identity theft, data collection by the networks, data usage by advertisers, etc.
The decentralized, secure, and transparent nature of blockchain can bring much-needed privacy to individuals using online social networks. This technology can also be used by the creators of viral content to receive compensation similar to how Ethereum blockchain is being used to trade NFTs (non-fungible tokens) – one-of-its-kind digital creations.
Now, let’s explore the impact and application of blockchain technology in social media on a deeper level.
1. Prevention of Social Media Privacy Violations and Data Pilferage
Blockchain technology is not limited to securing cryptocurrency transactions, it can also be used for data validation, identity protection, and authentication when it comes to social media.
The majority of social media networks use conventional personally identifiable information (PII) for account authentication that includes full name, email address, phone number, etc. The PII is stored and managed in a traditional, centralized manner giving the networks a huge business advantage as well as making it a potential and easy target for hackers.
For instance, one of the main social media platforms, Facebook, exposed data of 50 million accounts back in September 2018. And this is not an isolated incident. Facebook has been in the news for a series of data breaches like the Cambridge Analytics scandal, interference of the Russian government in the US elections of 2016, illegal sharing of user data by the majority of apps on Facebook, and more.
Adding blockchain to social media will decentralize the storage of personally identifiable information (PII) making account authentication more secure and private, preventing chances of privacy violations and data pilferage.
Blockchain will also make conversations and transactions private between users enabling only the involved users to access the contents of the conversations and transactions.
1. Opening Doors for Secure Payments
Social media networks have come a long way from being mediums for connecting people to becoming platforms and tools that are enabling the creator economy. Amid these changes, these networks have been exploring their payment platforms since 2015.
For example, Venmo, an e-wallet, was among the first platforms to connect with social media to send payment notifications. Then there’s Snapchat’s payment feature called Snapcash, Facebook Messenger’s peer-to-peer payment option which is only available for their USA users, and Hike Messenger, an Indian Messaging App, introduced Hike Wallet.
Recently, WhatsApp, owned by Facebook, introduced WhatsApp Pay for 20 Million Indians in association with SBI, HDFC, ICICI, and Axis Banks.
Now, these payment options definitely add convenience to users’ overall experience but these platforms record all the transactions that happen on their platforms which is a major privacy concern. Again, this financial data will also be stored centrally making it easier for hackers to hack and then filter out high-value accounts and target them further.
Blockchain can be added to the mix to make payments through social media more secure and transparent as it is already being used to trade in digital assets like cryptocurrencies, NFTs, etc. Plus transacting in cryptocurrencies is getting lucrative for people since they can earn interest on Bitcoin, Ethereum, etc. which is why it’s important to make social media payments secure before it becomes mainstream payment option.
Using blockchain technology would protect users’ privacy and their financial data which would, in turn, make them more comfortable using social media platforms and their payment options.
If we were to think one step further, these social media platforms can automate many financial processes by using smart contracts (they are encrypted user agreements signed between buyers and sellers and lenders and borrowers transacting in the realm of blockchain technology). Blockchain technology can also make the tracking and analysis of data more secure and less invasive for the users.
2. Decentralized Social Media Networks
The privacy loop starts from the centralized nature of the data collected and stored by these social media networks and the fact that one giant company, Facebook, owns the top 3 social media networks with over 3 billion monthly active users collectively.
If we use blockchain technology to decentralize social media networks, then these networks would operate on independently run servers instead of centralized servers owned by a business.
One of the decentralized social media platforms is Steemit with over 1 million active monthly users. It is a blockchain-based social media Daapp (decentralized app) that lets its user create content, collect rewards for their content, and interact with other users.
They’ve basically incentivized socializing in their community. They also have Steem tokens that decide the magnitude of the Steem power the users hold, which means more Steem tokens means more Steem power and the users having more power get to decide on the community matters.
Mastodon is also an open-source decentralized microblogging social media network that functions similar to Twitter. It’s community-owned and ad-free and has over 4.4 million users. Open-source and decentralized will be the future of social media.
3. Cutting the Middleman and Earning What’s Rightfully Yours
With social media platforms adding more and more creators’ tools and creating an ecosystem for paid brand collaborations, influencers and creators have started monetizing these platforms.
But these content producers, creators, and influencers might lose a significant amount from their earnings because of these platforms acting as middlemen. The distribution and reach of the content are highly dependent on the platform’s algorithm which is among the important aspects of brand collaboration.
Moreover, when you share your content on these social media platforms, you are not only sharing your content publicly on the internet but you are also granting certain permissions to these platforms to use your content for their benefit.
By introducing blockchain to this process, we can potentially disrupt the process by enabling creators to create and share their content and have complete control over how and where the content is distributed. The more control over the distribution, the more they will be able to earn from their craft.
On a closing note,
Social media used to be fun & games until the platforms started taking advantage of their users’ data as well as the content being shared. Most of the social media users are still not aware of the privacy and data laws and how it affects them and their experience on these platforms which is why the platforms are able to get away with everything.
Sooner rather than later, these platforms will have to let go of their centralized power and accept the decentralization where blockchain will play a major role. The transition will be far from smooth for these platforms and some might be unwilling, but this is what’s best for all the parties involved in these transactions of data, privacy, and social lives.
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