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

  • Cointime May 12 News Express

    1.The number of Bittensor subnets for the AI ​​project will increase to 64, and 1024 subnets will be achieved this year2.Trader predicts Bitcoin price will reach $350,0003.vladilena.eth redeemed 1930 weETH from Zircult, suspected of selling4.Solana’s on-chain DEX transaction volume yesterday exceeded the sum of five chains including Ethereum, BSC, and Arbitrum5.RSS3 VSL locked-in amount surged in the past two days and is close to 200 million US dollars 6.The transaction volume of Club Key on friend.tech platform exceeded 1 million7.Lido has paid out more than 516,000 ETH in staking rewards, equivalent to approximately $1.51 billion8.1,000 BTC transferred from TronDAO to an unknown new wallet9.Report: Justin Sun deposited 120,000 eETH into Swell L2, worth $376 million10.1707.36 BTC have flowed out of Binance in the past 7 days

  • Xinjiang launches special campaign to combat illegal fundraising, with key areas including virtual currency, blockchain, etc.

    According to Chang'an Xinjiang Public Account, Xinjiang Autonomous Region and Corps have launched a joint special action to crack down on illegal fund-raising, with key areas including third-party wealth management, fake private equity, fake gold exchange and other traditional fields, as well as emerging fields such as virtual currency, blockchain, cultural tourism, film and television investment, and debt resolution services. It is reported that key cases include cases involving more than 100 million yuan and cases that have been criminally filed for more than five years.

  • A British court has postponed the final sentencing of Wen Jian, a British-Chinese national involved in the country's largest Bitcoin money laundering case, until May 24.

    On May 11th, it was reported that Jian Wen, a 42-year-old British Chinese citizen, was found guilty of "participating in arranging money laundering" in the UK's largest Bitcoin money laundering case. He could be sentenced to up to 14 years in prison. Jian Wen's defense lawyer, Mark Harries, stated that due to the judge's busy schedule, the UK court has postponed Jian Wen's final sentencing, which was originally scheduled for May 10th, to May 24th.

  • Web3 startup Star Nest completes $6 million in Pre-A round of financing

    Hong Kong Web3 music startup Star Nest announced that it has completed a $6 million Pre-A round of financing, led by Chuangqi International Limited, a wholly-owned subsidiary of Hong Kong Stock Exchange-listed company Guofu Innovation. Star Nest will collaborate with Armonia Meta Chain to develop the Star Nest SpaceStar metaverse game, which includes music, role-playing, and social features.In addition, Star Nest plans to launch its NEST project in the third quarter of 2024. Nest will receive 2.1 billion NEST tokens tailored for the project, and Star Nest will use the NEST token to build a more complete music industry token economic system. The NEST token will be widely used for purchasing performance tickets, chain game cooperation, metaverse consumption, governance voting, and other activities.

  • Over $594 million worth of PYTH is staked

    According to Dune data,  there are currently 1,201,167,362 PYTH tokens in the staked state, with a total staked value exceeding $594 million. The number of PYTH stakers has reached 151,211.

  • US Department of Justice: Tornado Cash indictment has nothing to do with "free speech"

    On May 11th, the US Department of Justice explained why the motion to dismiss the criminal case against Tornado Cash founder Roman Storm was invalid. The Department of Justice reiterated that their indictment was not related to whether the Tornado Cash computer code had freedom of speech or was protected by the First Amendment of the Constitution. The defendant was not charged for publishing computer code, but for using it to facilitate profitable illegal activities.

  • USDC circulation decreased by $100 million in the past week, with a total circulation of $33 billion

    According to official data,as of May 9th, Circle has issued approximately $2 billion USDC and redeemed approximately $2 billion USDC in the past 7 days, with a decrease in circulation of approximately $100 million. The total circulation of USDC is $33 billion, with a reserve of $33.1 billion, including approximately $3.3 billion in cash and Circle Reserve Fund holding approximately $29.8 billion.

  • SEC rejects Coinbase's request for appeals court ruling on cryptocurrency rules

    The US SEC has rejected Coinbase's request to appeal to the court to review whether traditional securities rules are applicable to cryptocurrencies. In its application, Coinbase stated that it hoped the appeals court would consider whether the Howey test, which has long been used for securities evaluation, should be applied to digital assets. However, the SEC pointed out that Coinbase has not successfully demonstrated the need for such an evaluation. The SEC stated that Coinbase is attempting to create a "new legal test," but this attempt was rejected by the court. The court found that Coinbase's arguments lacked consistency and did not successfully demonstrate the existence of decisive issues. Currently, the judge responsible for hearing the SEC's case against Coinbase will make a ruling on Coinbase's intermediate appeal motion.

  • Colombian President Suspected of Accepting $500,000 in Illegal Crypto Donations

    Colombian President Gustavo Petro is suspected of accepting over $500,000 in digital token donations from a fraudulent cryptocurrency project during his 2022 election campaign. A former contractor revealed that the illegal donation occurred during a meeting in February 2022 that discussed the advantages of cryptocurrency and the possibility of working with the government. This allegation is one of the latest charges faced by President Petro during his election campaign, with the Colombian Prosecutor's Office investigating his campaign last year.

  • Blockchain Asset Management announces launch of a dedicated blockchain fund for accredited investors

    Blockchain Asset Management, a cryptocurrency fund with a scale of $100 million, announced the launch of an exclusive blockchain fund for qualified investors. The specific amount of funds raised by the fund has not been disclosed yet, but it is said to have reached "eight figures", which means it is in the tens of millions of dollars. In addition, the investment threshold for the new fund is $100,000, and all investors are required to meet the approved standards (annual income exceeding $200,000, net assets exceeding $1 million).