The rise in the prospects of Blockchain technology is analogous to the rise of Bitcoin. Bitcoin was more famous in the beginning because of its controversial nature and a direct challenge to the banking system. But Blockchain being the technology underpinning the cryptocurrency slowly captured the attention of everyone. Every nation-state approached crypto movement with caution and hostility, however, they were all in on Blockchain. Chinese made the Blockchain one of the crucial aspect of their China 2025 strategy.
Why Blockchain?
The rise in the popularity of Blockchain is important because of its applicability beyond the cryptocurrencies. The companies are trying to scale the opportunities in Blockchain in every sector of the economy. Nation states are not much behind in exploiting that aspect. Blockchain’s attraction lies in its features.
It is very secure when it comes to the existing methods. It is true that the hackers have amped up their efforts to target crypto assets but taking over a Blockchain still requires control of 51% of the entire decentralized nodes which is almost impossible. Because of that, the technology is more reliable than its alternatives. Also, there is no way to affect the data once recorded within the block.
There are many avenues for its applicability but today we are focusing on how it can better social media.
Time Well Spent
Social Media is the zeitgeist of the 21st century. It is fascinating, facilitated connectivity and intends to make us more informed. Or so we thought. Tristan Harris, ex-Google employee coined the term addictive economy to explain the rise of social media.
According to Harris, the aim of the Silicon Valley is to make everyone addictive of its products. Notification, chats, messages or reminders make us constantly on the lookout on our phone sets. Social media is at the center of this problem.
Data Scandal in the US
Another problem which is now having seismic geopolitical implications for the world is the rise of fake news. Many analysts have cited this as a major reason for the rise of Donald Trump. Facebook was one of the main reasons for his presidency. The Cambridge Analytica scandal was just cherry on the cake.
The idea that a tech company can loan its users data to a startup for psychological profiling was too much to comprehend. Mark Zuckerburg is on the global tour now to apologize for the blunder. His testimony in front of US Senate and European parliament testify to this fact. Sheryl Sandberg’s media tour in wake of the scandal was another fact that the whole enterprise stinks.
In response to these scandals, Facebook tried to delete the false accounts that have posted fake news in the recent years. They also are now tweaking their algorithm to change the way news is presented to their audiences. Up until now, the recommendations are made based on one’s browsing history. This, in turn, creates bubble effects which polarize the society on tribal lines.
Blockchain Applicability
Blockchain can solve these problems. A distributed ledger system is able to verify identities, data and information in the first place. There are instances of companies created for that purpose only. Take the example of Oxcert Protocol. It facilitates a framework for the enthusiasts and engineers to create decentralized applications called dapps.
This enables everyone to clearly verify and authenticate their digital and real-world assets. These include original content, ID, university degree, in-game items, property paper etc. This has the potential for the gathering and verification of all kinds of data. News and online content are a form of unprocessed data. (Unprocessed because they are not entirely verified).
There is going to be a pressure build upon the social media companies to budge up the pressure. The companies are now going to be forced to either outsource the job or to create their own Blockchain to incorporate the features of the Blockchain.
Revolutionize Ad Based Model
Social media’s business model is based on the collection of data. All these tech giants which rose to prominence in the first half of 21st century are ad-based business entities. These companies collect and then sent these data according to the targeting of the advertisement.
Everything one does on the social media every post every like, every comment and every pic can tell a lot about you, your location or your inclinations. These companies have huge servers to record all of these data in the same instant one hits the keyboard.
The newsfeed of the Facebook or Twitter is thus tailor-made according to one’s activities on the web in the past. Hence one gets numerous ads in one’s news feed. The Cambridge Analytica scandal brought to its forefront the issue of data privacy. Is this a right or not.
European Union has recently made a very big legislative move towards data ownership which puts companies like Facebook on the collision course with EU. If all the indications are right, Facebook is ready to see a reduction in its European share. User information are can be manipulated, distributed to the third parties and they can even sell them. The entire revenue stream of the Facebook is based on the data ownership.
Disruption
Blockchain has the potential to disrupt these models. They can give the users control over their very own data and information. Blockchain also empowers the consumers to decide where these data goes. This provides a data autonomy. No platform will have access to it unless the customer’s permission. The implications for all these are very far reaching.
Users can be empowered to choose the advertisers and third parties, not some shady guy typing an algorithm. The fees for the sharing of their data however small or large will get directly to the customers.
This can revolutionize the ad based modeling. The decentralizing effect of the Blockchain can easily disrupt the entire chain of command. The advertisers are already in the process of paying huge money to centralized entities. Now they can send the money directly to the right people. These people actually own the information. The transparency and rights-based approach itself is enough of transforming the entire ad-based model of social media.