Can Decentralized Community Crypto Projects Be the New Social Media?

Since the late 90s and early 2000s, social media platforms have managed to become an integral part of our daily lives, with their total user base surpassing 4.5 billion users worldwide.

Social media platforms are forever evolving, from the creation of new social sites like TikTok to major rebrands (X, formerly Twitter). However, in an era dominated by centralized social media giants, the emergence of community crypto projects heralds a potential new direction.

Leveraging blockchain technology, such platforms prioritize decentralization, granting users unprecedented control over their data and content ownership.

Could community crypto projects be the future of social networking sites?

We speak to project founders in the space, looking to unlock a less “Big Tech” controlled version of social media.

Community Crypto Projects vs Centralized Social Media

Decentralized social media platforms could be en route to revolutionizing one of the biggest online industries today. From data breaches to content moderation and a very relaxed approach to user privacy, traditional social networking sites could find themselves in hot water, which is where blockchain-based social networks could come in.

“Decentralized social media platforms offer distinct advantages compared to their centralized counterparts,” Daniel Pal, the founder of Chappyz, told Technopedia.

He explained that one of the biggest advantages that decentralized social networking sites have over centralized ones is their resistance to censorship.

“In a decentralized system, authority is distributed across numerous nodes, making it challenging for any single entity to control or manipulate content. This creates a more open and diverse online environment where freedom of expression is less vulnerable to suppression.”

One of the crypto industry’s largest and perhaps most popular decentralized social media networks is Mastodon – a fully open-source microblogging platform. Its decentralization provides users with increased autonomy and privacy, something a number of traditional social networking sites are not doing as well.

In addition, bringing social networking sites into the world of Web3 could “crack open an array of business models and opportunities”, the co-founder of Rarilabs, Lasha Antadze, told Technopedia.

Dmitry Mishunin, the CEO of HashEx added that decentralized social media platforms reduce the influence of a central authority and could potentially lead to a more democratic and equitable online environment.

“By dispersing data across a network, these platforms are less prone to data breaches and centralized manipulation. This decentralization not only safeguards content but also nurtures innovation, as users and developers are liberated from the constraints of a single entity’s rules and algorithms.”

Community Crypto Projects Fuelling Ownership

One conversation that frequently comes up is privacy and control of your data.

“By redefining the traditional paradigm, these projects empower users with unprecedented control over their personal information. In these platforms, individuals retain ownership of their data, determining how it is shared, who can access it, and for what purposes.

“This user-centric approach significantly reduces the risks associated with centralized data storage and minimizes the likelihood of unauthorized use,” Chappyz’s Pal noted.

Rarilabs’ Antadze added that users could also use community crypto projects to monetize their personal data in a way they could never achieve on Web2 applications.

“[Users] could, for example, auction their data to advertisers on a secondary market.”

Antadze brought up the infamous Cambridge Analytical scandal, where users were not even aware that their data was being abused, yet it reshaped election results globally.

“For traditional social media and decentralized social media to truly and meaningfully collaborate, traditional media would have to fundamentally alter their infrastructure and start adopting decentralized practices.”

In addition, heightened data privacy concerns could significantly influence how people are using more traditional social networking sites, leading to more privacy-conscious behaviors and a demand for platforms that respect user autonomy, HashEx’s Mishunin added.

“The blockchain technology underlying these platforms ensures transparency and security, making it difficult for third parties to access or misuse user data without consent.”

The Tokenomics of Community Crypto Projects

Crypto projects often use tokenomics to incentivize user engagement and governance. Through decentralized structures, users are rewarded with tokens for their contribution, fostering ownership and active participation in shaping a blockchain’s future. The same goes for community crypto projects.

A prominent example of this is Steem, a social blockchain that rewards users with STEEM tokens for content creation.

Mishunin said that tokenomics can cultivate a great self-sustaining economy within a crypto community project where tokens hold tangible value and can be utilized for various services, fostering an even more engaged community.

“Tokenomics serves as the heartbeat of user engagement, creating a dynamic ecosystem where active participation is not only encouraged but also rewarded.

“These projects utilize tokens to incentivize users for their contributions, whether it is crafting valuable content, engaging in meaningful discussions, or providing technical support. By receiving tokens as tangible rewards for their efforts, users are not only recognized for their contributions but are also spurred to continually participate in the project’s growth and evolution,” Chappyz’s Pal added.

However, while tokens do have the potential to redistribute power to users and communities, they could also be considered a “double-edged sword”, Rarilabs’ Antadze said.

“It is important to design tokenomics in a way that means the community is rewarded for their participation but not solely incentivized by financial gain. It is vital that connection and interaction remain the key incentives; everyone in Web3 is familiar with the trap of token hunters and the detrimental impact they can have on the community.”

Traditional Social Media Hesitant to Approach Decentralization

While a collaboration between Web2 social media applications and Web3 technologies could sound like an appealing pitch, HashEx’s Mishunin explained that “it is important to approach [this idea] with a realistic perspective”.

According to Mishunin, traditional social media platforms could be more hesitant to embrace decentralization as it “could be perceived as a relinquishment of their control and influence.”

Rarilabs’ Antadze agreed, stating that the Web2 social media business model is highly incompatible with blockchain technologies.

“For traditional social media and decentralized social media to truly and meaningfully collaborate, traditional media would have to fundamentally alter their infrastructure and start adopting decentralized practices.”

On the other hand, Chappyz’s Pal is more bullish on the topic, noting that there “is ample room for collaboration between traditional social media platforms and decentralized projects”.

“While traditional platforms have established large user bases and robust infrastructures, decentralized projects bring innovative approaches to privacy, data ownership, and user control. Collaborations could leverage the strengths of both models, potentially incorporating decentralized features within existing platforms or promoting interoperability between them.”

He added that a collaborative approach could also have the potential to create a hybrid ecosystem that combines the best of both worlds, offering users enhanced privacy and control while also maintaining the widespread accessibility and features of traditional social media sites.

The Bottom Line

In the ever-evolving landscape of social media, the emergence of community crypto projects introduces a potential paradigm shift, challenging the dominance of centralized giants.

By leveraging blockchain technology, community crypto projects could become a cornerstone, empowering users with unprecedented control over their data and content ownership.

Yet, collaboration between traditional and community crypto projects faces hurdles, meaning the future could lie in a delicate balance — leveraging the strengths of both models for an innovative, hybrid ecosystem that prioritizes user privacy and control.

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1. This article is reprinted from [Techopedia]. All copyrights belong to the original author [Iliana Mavrou]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
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