For many, the arrival of bitcoin - the cryptocurrency predicted to hit a value of $1.2 trillion by the end of 2018 - promised something much more than quicker online payments. Free from government or central bank control, transparent, and regulated by a network of user, early adopters championed bitcoin’s utopian credentials.
It was breathlessly pitched as a currency for the people - out of reach of the manipulative forces of a centralised power hub. This appeal was enhanced by the timing of its inception which coincided with the fallout from the financial crash of 2008, heralding a time of scepticism of banks and the wider establishment.
Ten years on, although bitcoin has managed to shed its formerly seedy reputation, the currency is not much closer to entering mainstream usage. For most, the currency doesn’t offer many immediately tangible benefits over sticking with pounds or dollars. In fact, movement of large swathes of the currency has stagnated due to investors hoarding bitcoins with the intention of selling them at a profit. This behaviour has shifted bitcoin’s primary use away from everyday transactions and instead towards speculation.
But while interest in bitcoin as a currency has plateaued, curiosity about its underlying technology has intensified. The distributed ledger technology the currency relies on has attracted interest from a number of industries. Banks – the very organisations bitcoin users intended to bypass - have shown great interest in harnessing the technology to streamline online payments.
Blockchain technology offers a way to cut out the middleman in financial transactions. Instead of being processed by one third party, the transactions pass through and are recorded by numerous computers on a dispersed network. Hence the flock of platforms built by tech giants such as IBM and Microsoft offering ‘blockchain-as-a-service’ to businesses with an interest in secure payments and increasing transparency in supply chains.
Read next: Best blockchain-as-a-service options
Banks’ uptake of blockchain seems to signal the demise of the tech’s hopes of challenging the prevailing economic order.
But despite corporate interest in blockchain, could its most radical applications be yet to come? Today, there are a growing number of decentralised social media networks cropping up, with the hopes of one day challenging the supremacy of Facebook. They’re directly opposed to centralised, private platforms like Instagram or Snapchat that have to keep shareholders happy rather than simply their users.
In its purest form, such a network would lack a central body creating profit from the platform and therefore be unrestrained by the goal of appeasing advertisers. Like bitcoin, it could be modelled on a system where those who invest most time and effort in the network have the greatest influence on its evolution.
Synereo aims to provide such a platform, and has developed its own blockchain technology which the network is built upon. Aside from creating a decentralised social platform, the developers aim to drastically alter the traditional relationship between advertisers and the public. They claim that all the money paid by advertisers will be distributed among those who are exposed to the ads. This would directly monetise attention by paying individuals rather than the host network, thus recognising that the value of social networks is created by the users.
If this seems radical it’s because it is. In the current ecosystem, the users of the system aren’t remunerated even though they are the ones that bring value to the platform. Without its 2.2 billion users, Facebook wouldn’t be worth the $479.4 billion it is today. But do the users see any of that? No. In fact, we pay for the privilege through a steady stream of data.
It’s an effect that’s even more pronounced for platforms expressly designed for users to upload original content. Take YouTube as an example. Although its the original content creators that bring in the hoards of viewers, they have to fight hard to get a fraction of the sum that YouTube pays itself through ad revenue.
In fact, a 2018 study found that 96.5 percent of all YouTubers don’t make enough from their videos to pass the poverty line. Apply this to an industry where it’s a physical - rather than digital - service provided and the injustice becomes even more glaring. It’s as if for each Uber trip, the platform snapped up 95 percent of our payment (instead of the 25 percent it claims), leaving the driver with a mere five percent for services rendered. Blockchain-powered platforms, by removing the need for a middleman and facilitating direct peer-to-peer payments, could end up making these platforms obsolete altogether.
Running with this idea, Steemit is another blockchain-powered social network taking inspiration from community messaging site Reddit. It’s based on a decentralised network called Steem. Its internal currency is paid to posters for their contribution by other users. ‘Upvotes’ - instead of just carrying social prestige within the system - also contribute a fraction of the currency to the poster. The more steam currency you’ve accumulated, the more your upvote counts. You can spend the currency at a ‘peerhuub’ store affiliated with the site, or ‘cash out’ and exchange your tokens for Bitcoin or other currencies on cryptocurrency exchanges.
There has so far been $22,728,958 paid out to users according to the website. This system could counter complaints of lack of remuneration on sites such as YouTube, and for creators such as illustrators, meme-creators or artists on Instagram. The clarity of the supply chain afforded by blockchain systems could also help with problem of content appropriation and reposting without paying due credit.
Currently, transaction fees for online payments render micropayments inefficient. But in these new ecosystems, micropayments facilitated by cryptocurrencies could replace the revenue produced by ads and more directly benefit the producers themselves. For example, on a video hosting site, instead of being forced to view ads – from which the majority of revenue benefits the host site rather than the creator – you could pay a few pence to watch it, or more if you so choose. The internet’s lack of a successful model for monetising content means that media requiring high levels of production is chronically undervalued. A prime example is the funding crisis faced by news outlets, who are yet to discover a sustainable commercial model for the digital age.
“I always knew that an open-source social network was inevitably going to emerge and become competitive with the top establishment social network,” says Bill Ottman, founder of Minds, another decentralised social platform. “It also became clear that the mainstream social networks were not rewarding people — were not incentivizing people. They weren’t giving revenue opportunities. They’re restricting people’s reach — they’re spying on people! So it became sort of obvious that there’s a market requirement for this space that we’ve filled.”
However, it’s not just zealous newcomers attempting to disrupt social media, more established social networks are also beginning to dabble in blockchain. One example is Kik, the anonymous messaging app. It recently launched its own, within-app cryptocurrency, Kin, which raised $100 million in an initial ICO. Kin was launched to provide a way to incentivise developers to add digital services and applications to the network without involving a middleman to facilitate payments. Its final goal is to create an in-app marketplace where peer-to-peer transactions can take place and advertisers can directly speak to users and receive remuneration (e.g. for coupons) through the messaging service.
But while decentralisation may seem radical, it's not actually anything new. In fact, when the web first launched in the '90s, it was very much an unregulated, decentralised ecosystem. In those days, internet users published their own content directly to the web without the need for the middlemen such as Facebook. Since then, companies have built their own high-walled private gardens, trapping us inside so better to feed us ads and harvest our personal information.
Companies are guzzling our data like never before and using it in ways most of us still don’t fully comprehend. We let them rummage through and sell off what they find to any number of unscrupulous third parties. But despite the increasing distaste towards social media giants and their collection and misuse of our data, can people be persuaded to try something different? One roadblock is that although people may like the sound of the ideology behind these new (non-platformy) platforms, this may not be enough to convince them to leave their walled gardens because the main draw behind a social network is arguably who is there already, namely friends and family.
Although this imperative varies for different sites. For example, on content sharing or community board sites (e.g. Tumblr or Reddit), personally knowing people is less of an issue - explaining why these sites could be the first iterations of decentralised social networks to gain the most traction.
But for most people, transitioning away from the sites they already use may require more incentivisation. Kind of like how the idea of a cryptocurrency distinct from a centralised power like a bank is a very appealing thought. But not enough for me to shut my bank account and put all my money into bitcoin.
Given this, it’s unlikely that these early sites will tempt people over in big enough numbers to cause Facebook concern. But as blockchain (and the ideology it embodies) is absorbed into a growing number of industries, decentralised social networks could one day become the status quo. Leaving us to wonder why we ever spent so much time within these walls.