Storm in a teacup
Over the last 6 months, we have been witnessing one of the greatest corporate sagas that is so much more binge-worthy than what gets passed on as reality on OTT platforms today. And no, it is not the Depp-Amber trial even though that came a close second. I am talking about the tete-a-tete that has been going on between Elon Musk and Twitter.
So, what happened? Musk secretly bought a 9.1% stake in Twitter, then decided not to join Twitter’s board after signing an agreement to do so, suddenly submitted a take-it-or-leave-it unsolicited offer to buy off the platform, tried to garner public support for this hostile bid, finally made Twitter sign on the dotted lines; and then just when the ripples were finally fading off, Musk decided to terminate the deal. Well, Twitter has had enough of this, and they are now taking Musk to court, citing that the violations “have cast a pall over Twitter and its business”. And this is for a deal that they did not even want in the first place. And as I am writing this piece, Musk has decided to counter-sue Twitter, claiming that the monetizable daily active users of the platform, i.e. people who can be shown ads, are far lesser than the total user base. Phew!! It is never a boring day in a world where the wealthiest man is Elon Musk.
But all theatrics aside, one can’t help but wonder what changes Elon Musk would have introduced to the platform if he was in charge. At various points, Elon has ranted about the need for an ‘edit’ button and the elimination of the spam bots, the latter being the bone of contention (or the pretext) cited by Musk in his abort of the acquisition.
However, there are two other points that Musk has raised in his critique of Twitter, and these points are significantly more important as we think about the future of Social Media in general. The first of the two points has to do with free speech. A self-proclaimed absolutist, Elon was very critical of Twitter’s decision to permanently ban Donald Trump, following the insurrection at the US Capitol building on January 6, 2021. He claims that Twitter, the “public town square” of the modern era, much like other high-tech media, cannot be the de-facto arbiter of free speech. So looser content moderation aligned to local laws was in the reckoning.
Think about this for a moment. Today, you can switch between news channels if you find the anchor too loud or too biased for your comfort. But the channel soldiers on for as long it can garner respectable viewership. So, ideally, should Trump not have had the right to a forum for airing his thoughts, and his followers the right to consume and participate in the aforementioned forum? Today Twitter has taken an extreme judgement call on Trump, and Musk believes that relaxed norms for content moderation would have stopped that. But more on that later.
This brings us to the last change that Musk intended to introduce. He believes that Twitter’s algorithm should be “open source” — a term for software that’s distributed freely and is able to be manipulated openly by many different contributors. Different channels, anyone!
The Case for Decentralization
All bets are off on whether Musk actually wanted to push Twitter towards decentralization. After all, corporate moguls owning media-houses are all too common; remember the Bezos takeover of the Washington Post in 2013 and the Reliance takeover of Network18 in India shortly after; and it is arguable whether either of them actually believed in and promoted the mission and spirit of free and unbiased journalism.
However, this provides a good backdrop for discussing how a hypothetical, decentralized Twitter, among other social platforms, would look like, Musk or no Musk.
Earlier, we discussed about the freedom to choose a television channel of your liking. A similar argument can be made of emails. Today Gmail is the leader of the email ecosystem by a mile, but there are competitors cropping up every day, and being booted out of Gmail does not take away your access to email completely. One of the biggest problems of a centralized platform is that it can de-platform you at any point in time and you would have no recourse.
Analyze this from a business risk perspective. Your entire business can be put to zero at any time by somebody else who really has nobody to answer to. Surely you need to be blind to invest in this kind of venture. Like somebody said, you are playing a reverse lottery every day and one day you may just get de-platformed.
Add the economics to this and you are in a bigger quandary. The centralized social media owns the social currency of the creator on the platform. So, all the views, the likes, the comments/retweets, and most importantly, the subscribers/followers are all linked to the platform. So if a content creator on YouTube wants to exit and move to a different platform, he/she will have to start from scratch all over again. This works out perfectly for the centralized platform because they now have an exit barrier for the creator, but this is counterproductive for the creator whose reputation and hard work could have been easily replicated in another platform should YouTube be decentralized.
Then, there are other policy-led boundaries in a centralized social media that are non-existent in the decentralized version. Let’s explain with YouTube. YouTube has a ‘one size fits all’ policy. So it gives zero options to the creators to tinker with the user experience of their viewers and subscribers. Now, agreed that Google spends quite a lot to keep the experience contemporary and simple and that not everybody would have the skill or inclination to make subtle changes, but the point is, should you have the knowledge and the tools to make changes, well, you are not allowed to do so.
Then there are obvious disadvantages with a centralized platform in that if data is controlled by one party behind closed doors, then it is susceptible to attacks. Furthermore, there is no concept of digital privacy. You pay with your personal information to utilize their services, and you have little to no control over the use of that data.
Decentralization fundamentally brings in a new realm of things. As a content creator, you are free to tinker with the algorithm to make a house that you are comfortable with. You can control the modalities and economics of that house. And as a content consumer, you are free to choose which house(s) you want to be a part of, akin to changing channels with a remote. You also get control over the full or partial consumption of your social footprint, and may even earn for such an exchange.
The transparency and traceability also improve, now that all content gets to reside on a blockchain. No more saving old tweets of celebrities that are deleted down the line, there is always a clear path to citations that is unquestionable and irrevocable. More importantly, there can be more efficient machine learning algorithms created on the data, that is open for consumption and hence leads to multiple use cases. For example, models can be used to identify harmful content or misinformation and traced back to the genesis of strict actions by governments. On the contrary, a Web2 world has Facebook controlling the data and running the models, and if misinformation spreads faster and is aligned to the generation of ad revenue, there is every incentive for Facebook to help it spread faster as opposed to controlling its spread.
Essentially, the Web2 world which the centralized social media are a part of, had a tacit agreement that while the content creators are given a forum for a larger audience, the platform modalities, algorithms and monetization were controlled by the platform. With the advent of Web3 and content monetization, social media as we know it seems apt for transformation.
A decentralized social media opens up a lot of interesting possibilities. Consider social tokens. Today you have blue ticks for account verification on Twitter. Let’s say that a decentralized version of Twitter introduces a social token that is linked to ‘good’ social behaviour driven by some algorithms. So you get to accumulate social tokens over time and then stake some of the accumulated tokens on a new profile/entrant. It is akin to a social currency being executed, similar to a recommendation or an introduction. But the difference is that in a decentralized Web3 environment, you can align an economic value to the social currency which pays you back if the bet turns out a winner. Alternatively, or maybe simultaneously, the social token gives you a stake on the governance of the platform.
The Future is closer than you think
Decentralized protocols are already up and running, and are gunning for the big techs to decentralize and transform the social industry just like Bitcoin and Ethereum have disrupted the financial system today.
Take DeSo, for example. Short for ‘Decentralized Social’, DeSo is a permissionless blockchain custom-built from the ground up to power and scale a new category of decentralized social applications. It is meant to take a private monopoly like Facebook and turn it into an open utility. This is built on a vision of the future that includes thousands of developers with thousands of apps and thousands of feeds to choose from… an ecosystem where there is a lot more competition, innovation, and shared ownership than monopolies (such as Facebook and Google) as they exist today.
With a native currency in the platform, DeSo is already supporting NFTs and Social Tokens and is innovating newer business models. Take Social Tip, for example. So in addition to likes, a social tip allows the content consumer to send money to the content creator as a token of appreciation for the piece of content.
This protocol provides each user with their own creator coin. Creator coins are available to buy and sell throughout the DeSo ecosystem, offering creators a token economy surrounding their brand. Which means that if you believe in the potential of a content creator, you may invest early in their brand. At a macro level, the increase in the community’s perception of a creator is reflected in the increase in the value of the creator’s coin.
As a content creator, you can, therefore, be innovative in engaging with your followers/fans, thereby boosting the value of your social token. For example, you can provide premium content or access to specific merchandise around your brand to the top holders of your creator coin. Heck, it can be as simple as the right to repost or comment on your posts. You can even create NFTs which can have a life of their own. Think of an NFT that gives the holder access to a specific event hosted by the creator every fortnight in the clubhouse. Such NFTs can be allowed to be traded, with the creator getting a share of the profits on each transaction. As you can see, you are only limited by your imagination in this magical world.
One other protocol is the Lens Protocol, which is not a native blockchain but is built on top of the Polygon (Matic) currently and plans to expand to other chains in the future. This protocol allows users to own everything in the form of NFT, so from your profile to your followers to all sorts of content/publications that you are putting out, are all made into NFTs that come with some sort of innate utility and rarity. The social graph of an individual forms the basis for algorithms to congregate in communities of his/her liking.
There are many other protocols that are addressing the decentralization of social media from different perspectives and are therefore challenging the mighty tech firms. How are the goliaths responding? Well, they are looking to leverage the metaverse to go from 2D to 3D, thereby making the interactions more immersive, innovative, and with more use cases.
Zuckerberg and his company looked to the future and changed Facebook to Meta–an attempt to usher in the metaverse, a new world built in virtual reality. Google’s parent company, Alphabet has also committed significant investments to the metaverse.
But, and here’s the clincher, if even today people are spending more than 50% of their waking hours looking at a screen (and I am being conservative here), and if that number is expected to increase sharply once Metaverse becomes ubiquitous, then the need for control and economic rights are bound to be stronger in the future.
And so the decentralization of social media seems more certain than ever. It is no longer a question of if it happens, only when it does. The disruption is well and truly underway.