Cointime

Download App
iOS & Android

The Crypto Era of Social Media Is Upon Us

Validated Individual Expert

It’s inevitable.

The change is here, and only time will tell us not if, but when.

Decentralized social media has simply superior traits that make it an almost certainty.

However, Crypto enthusiasts could have little to celebrate, as some of the solutions that are coming out are actually contrarian to the Web3 vision… and could very well succeed without blockchains.

Nostr-Damus is back

This week we’ve seen the official launch on iOS of Damus, the first-ever truly decentralized social media protocol that’s iPhone-compatible, built by the Nostr team.

Already described as yet another “Twitter killer” Damus follows a similar approach to what Jack Dorsey is building with Bluesky, a social media network where users own their data and choose what to see and when, in comparison to platforms like Twitter or Instagram, that manipulate your feed in a centralized manner and, more often than not, in a biased way.

But how does Damus really work? The answer may surprise and, probably, disappoint many of you.

A network of relays

You see… Damus doesn’t rely on blockchains to work. Yes, you read that right.

Despite being decentralized, it’s not a blockchain protocol but a decentralized relay system.

But what does that mean?

It uses relays (servers) that do very simple stuff: you send them the posts you want to send and to who, and the relays do just that. But the key concept here is that those relays can be set up by you or by me.

Anyone gets to be a relay if they want to.

Thus, you don’t require or aren’t subject to a specific central entity deciding who gets to see your content or the content you get to see.

It’s entirely up to you.

Also, these relays are trust-minimized. In layman’s terms, this means that you don’t need to trust that relays will behave correctly, as signatures are verified directly from the client side (your application, basically).

But of course, blockchains had to be in the picture somewhere, right?

And of course… there’s Bitcoin

Adding to all of this, Damus also incorporates the possibility of donations to posts, a similar concept being soon implemented on Twitter.

And the best part is that Damus has native integration with Bitcoin’s Lightning Network, which allows users to seamlessly pay with Bitcoin on the platform.

But does this mean that the future of social media won’t depend on blockchains?

Not at all.

Blockchain has its own set of proposals

Besides non-blockchain solutions like Damus, blockchain developers aren’t oblivious to the decentralized social movement, with projects like DeSo or Lens Protocols offering similar value propositions but from a blockchain perspective.

In a nutshell, blockchain-based solutions like the Lens Protocol offer you the capacity to create a personal identity using NFTs, and use these NFTs as validators of said identity in the different platforms, allowing you to have one unique identity, totally owned by you, that can be transported through decentralized versions of Twitter, Instagram, or even Medium.

A seamless UX experience while giving back ownership of your data to you.

Inevitably, with all these options, one has to ask, what will blockchain’s role be then?

To blockchain or not to blockchain, that question is

It’s pretty easy to assume, just by reading Crypto enthusiasts, that blockchains are able to cure cancer, achieve world peace, and will destroy the traditional financial system.

However, we must be honest with ourselves; many of the Crypto industry’s claims are severely over-optimistic.

Let’s not forget the only certainty we have with blockchains. A blockchain is a ledger.

Let’s make it very clear

Blockchains are one thing and one thing only; systems that, powered by a decentralized network of nodes (servers) that agree on a common state of the ledger and cryptography, provide trust to systems by ensuring data integrity by avoiding single points of failure or governance.

In layman’s terms, blockchains act as trust enablers by ensuring that data stored in them won’t be tampered with. Simple as that.

At first, this seems like nothing, but it’s a quite powerful element, especially when you factor in how much trust matters in today’s world.

Ask yourself this: Would you trust someone that you know nothing about to pay you $2,000 dollars?

Data integrity is fundamental

The truth is you probably won’t trust them.

But when he/she takes out their credit card to pay, you are suddenly much more confident about it. At the end of the day, banks provide the necessary trust for an economic system to work, as they won’t allow anyone to spend money they don’t have, at least not without incurring in debt.

But the fact that financial systems need banks to work proves that they aren’t optimal, as you require these centralized entities to take part in almost any transaction.

But what if we had a system that generates a global, immutable, database of data that is really hard to modify? In that scenario, you can be confident that he/she who claims to have $2,000 dollars to pay you, actually has them.

And with no middlemen like banks in between, the network itself acts as the guarantor of trust. And that’s where most people reach.

The eternal “Bitcoin is money” discussion.

But, to me, blockchains are meant to protect much more than financial data… like your digital identity.

Protecting what’s yours

Your data, by now, is well spread through the Internet.

Heck, someone could be using your data to commit crimes while you’re sitting at home watching Netflix.

We’ve come to accept that, but we shouldn’t.

But what are we supposed to do? As websites don’t trust us, they require our personal information to validate we’re trustworthy individuals.

It’s what we describe as Know Your Customer procedures, or KYC, forced upon all companies so that governments and agencies can know as much as possible about us to fight money laundering or terrorism.

A noble cause, but that doesn’t mean we should be willing to give our personal data that easily.

But what if there was a way to retain ownership over our data while still complying with the aforementioned regulations?

Well, that’s coming, thanks to the blockchain.

Storing our data in blockchains

While it’s certainly unclear the extent to which blockchains will participate in decentralized social media, we can optimistically assume that, at least for certain data, blockchains will be used no matter what.

What data you may ask?

Well, it probably should be very clear at this point in the article.

All data that requires cryptographic guarantees that it will stay untouched, or immutable as Crypto enthusiasts love to say. And we have up to three ways to how this could take form on social media:

  • Bluesky/Damus vision: According to the non-blockchain systems, blockchains would only be used for one thing, payments. And, in this case, no other blockchain but Bitcoin, as I’ve described in this article.
  • Block’s approach: This is an overarching solution beyond Social Media and focused on an alternative view of the decentralized Internet, ironically named ‘Web5’. In this solution, our identity would be stored in a Bitcoin Layer 2, named ION. Again, no blockchain besides Bitcoin would be used, and blockchains would only be used for two things: storing the user identity and for Bitcoin payments.
  • Lens Protocol approach: In this view, blockchains are the foundational element of the whole infrastructure, very aligned with the idea of what Web3 should be. In this scenario, almost all data, and basically the whole Internet, runs on blockchains.

So the real question is, which view is more likely?

Keeping feet on the ground

One question hasn’t been answered regarding blockchains to this day.

How do we make them scale?

To ensure blockchains stay decentralized, we need to make sure they can be run by simple hardware, so that anyone can participate. This is the only way to true decentralization.

For that reason, the number of transactions introduced in each block (each new group of transactions that are approved and settled) has to be small so that these servers can handle it.

Consequently, the more decentralized you are, the less performance your blockchain has. However, if solutions like zk-rollups or modular blockchains live up to their promise, performance could be considerably increased.

Technical Note: Other proponents in the space argue that the key to decentralization is ‘breaking’ blockchains into smaller pieces. However, I don’t believe these models will succeed as the tokenomics of the native tokens of those blockchains aren’t really clear. In other words, if breaking down the chain means less rewards for nodes, will there be an incentive to participate?

Anyhow, if this vision fails, the Web3 concept where all data in the digital world is stored in blockchains will inevitably fail.

However, I want to make myself clear that this is just an opinion but, to be honest with you, I believe that the future of blockchains will be constrained to very specific, yet extremely powerful use cases, like the decentralized identity we’ve discussed or decentralized digital services like DePIN, making blockchains fundamental in our lives.

But I don’t believe all data will be stored in them, so solutions like the one proposed by Block or Damus could certainly become true.

Naturally, your opinion, if contrarian to my views, is just as valid as any other, as nobody really knows the outcome. Luckily, one thing seems certain to me: blockchains are part of social media’s future, a social media where your data, finally, belongs to you.

What do you think?

Comments

All Comments

Recommended for you

  • U.S. consumer confidence improves again in November, reaching a two-year high

    Dana M. Peterson, Chief Economist of the World Large Enterprises Federation, said, "US consumer confidence continued to improve in November, reaching the highest level in the past two years. The growth in November was mainly due to consumers' more positive assessment of the current situation, especially in the labor market. Compared with October, consumers' optimism about future employment opportunities has also greatly increased, reaching the highest level in nearly three years. At the same time, consumers' expectations for future business conditions have not changed, while their optimism about future income has slightly declined." Earlier, the US Conference Board Consumer Confidence Index for November recorded 111.7, a new high since July 2023.

  • Starknet: Phase 1 of STRK staking is now live on the mainnet

    Starknet announced that the first stage of STRK staking has officially launched on the mainnet.

  • CZ: Not trying to end the meme craze, just encouraging more builders

    CZ posted on X platform today, saying: "I am not against Meme coins, but Meme coins have become 'a little' strange now. Let's use blockchain technology to build practical applications." Some community users said that even Musk is a supporter of Meme coins, and it is very difficult to end this frenzy. CZ responded that "there is no attempt to end anything, everyone has the right to choose to invest or hold what they want. Just encourage more builders."

  • Talus Network Completes $6 Million Strategic Round of Financing with a Valuation of $150 Million

    decentralized AI protocol Talus Network raised $6 million in a strategic financing round led by Polychain Capital, valuing the company at $150 million. This funding will help further develop the Talus ecosystem, including the Protochain, Nexus framework, and "AI dating experience" application.

  • AXIOS: Trump is considering appointing a secretary of state for artificial intelligence

    according to AXIOS, Trump is considering appointing an AI minister to coordinate federal policies and government use of emerging technologies.

  • Coinbase International has launched COW perpetual contracts

     Coinbase International has launched COW perpetual contracts. COW-PERP market limit, market, stop loss, and stop loss limit orders are now all available.

  • Schuman Financial Completes $7.36 Million Seed Round, Led by RockawayX

    Schuman Financial has completed a $7.36 million seed round of financing, led by RockawayX, with participation from Lightspeed Faction, Kraken Ventures, Nexo Ventures, Gnosis VC, Delta Blockchain Fund and Bankless Ventures. In addition, Schuman Financial has launched a euro stablecoin, EURØP, which complies with the MiCA standard.

  • QCP: BTC's path to $100,000 has stalled, and ETH implied volatility has turned to put options

    QCP Capital has published an analysis indicating that the recent drop in the price of Bitcoin has resulted in long liquidations exceeding $430 million. This drop coincides with the end of five consecutive days of net inflows for spot ETFs, which recorded a outflow of $438 million on Monday, while MicroStrategy fell by 4.4%. With the US holiday approaching and no immediate catalyst to push prices higher, BTC's path towards $100,000 has stalled. In addition, the implied volatility of ETH has turned to bearish options rather than bullish options, and market concerns about downside risks may intensify, especially with the release of the FOMC meeting minutes and PCE data. However, in the long run, this market decline is not an excessive correction. Bitcoin has only retreated to last week's level. Since Trump's election, the market has become extremely overbought and leveraged, so a pause is inevitable.

  • Binance will delist GFT, IRIS, KEY, OAX, and REN

     Binance will delist the following trading pairs on December 10, 2024: GFT/USDT, IRIS/BTC, IRIS/USDT, KEY/USDT, OAX/BTC, OAX/USDT, REN/BTC, and REN/USDT. Additionally, Binance Futures will close all positions and automatically settle the KEYUSDT and RENUSDT USDⓈ-M perpetual contracts on December 3, 2024 at 09:00 (UTC). After the settlement is completed, the contracts will be delisted.

  • Careers in Crypto: 5 Insights for 2024

    In an overwhelming job market, leaning into personal networks and connections are more important than ever. Emily Landon, CEO of The Crypto Recruiters, outlines what is happening in the crypto job market and how you can position yourself or your company in 2024.