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Why Social Media Platforms Should Be Turning to the Blockchain

While Facebook and Twitter are banning all crypto-related marketing from their platforms, a new breed of blockchain-based social media sites is growing. Amazingly, these platforms are gaining popularity at an explosive rate, with some managing to raise hundreds of millions of dollars for launching. 

Some of the social media platforms turning to blockchain technology have done well in the mainstream and are now seeking innovative ways to improve users' experience. A good example is Telegram, a cloud-based messaging app with over 200 million active monthly users and around 700,000 more signing up daily.

According to Bloomberg Technology, the Russia-based social media company managed to fundraise over $1.7 billion in token sales between February and March of this year. The company plans to use the proceeds to develop what it calls the “Telegram Open Network” (TON) powered by its cryptocurrency known as “GRAM.”

Another mainstream social media platform that is rumored to be planning an initial coin offering (ICO) is is the world's biggest quality assurance platform, boasting over 215 million users and an estimated worth of over $270 million. Rumor has it that the platform is planning to introduce an incentive-based system where users will be rewarded for their activity on the site.

Why Social Media Platforms Are Turning to Blockchains

One of the main reasons social media platforms are pivoting to blockchains appears to be the mounting urgency for privacy and data security, the threat of which is still fresh in everybody's minds, thus creating an opportunity for innovation and change. Traditionally, social media platforms harvest personal data from users for targeted marketing campaigns in exchange for free services. In many cases, it seems clear to the public that their data is misused, exposing them to harm.

A good example of this is the recent incident in which Facebook allowed the political consulting firm, Cambridge Analytica, to harvest private data and use it for psychological profiling. According to Business Insider, the firm used an application developed by  University of Cambridge academic Aleksandr Kogan to access Facebook users’ private messages for sentiment analysis.

To avoid such incidents, forward-thinking social media sites are shifting from the centralized ad-based models to blockchain-powered ecosystems. In the blockchain-based social media model, users will have full control of their data and will be able to choose whether or not to share that data and with whom. 

Another challenge facing the conventional social media model is the rapidly changing face of big data regulation. In the past, governments in the U.K. and the U.S. have shown increased interest in managing how advertisers utilize personal data. For instance, in the U.K., stringent big data regulation known as the General Data Protection Regulation (GDPR) is about to come into effect. The law is expected to not only affect businesses in the U.K. but also in the U.S. and other regions as well.

While the immutability of blockchain technology makes it somehow at odds with the GDPR, its contribution to data privacy and security makes it the best tool for users. Also, the few challenges between distributed ledger technology and the GDPR can easily be resolved, and blockchain-based solutions can meet regulators in a satisfactory compromise for both sides.

Finally, the blockchain-based social media platforms are also introducing other value-adding services for users. Social media platforms such as Indorse and Synereo, for example, allow users to share their skills and get rewarded in the process. Others are offering platforms where gaming communities can interact, compete against each other and receive and share information without fear of data scraping. All of this is being made possible by the advancement of blockchains and smart contract technology.

With the steady decline of users on social platforms such as Facebook and Twitter, and with most people opting for secure and innovative social media solutions, blockchain-powered platforms are bound for exponential growth.

Browser Extension Lets Users Shop on Amazon With Lightning Network

Source: CoinDesk

The crypto payment processor Moon has announced that users can now leverage a Lightning Network wallet to pay for Amazon purchases through its browser extension. The extension also enables e-commerce payments with litecoin, ether and bitcoin cash through Coinbase accounts.

FinCEN Takes First-Ever Enforcement Action Against Cryptocurrency Trader

Source: FinCEN

The Financial Crimes Enforcement Network (FinCEN) has assessed a civil money penalty against a peer-to-peer bitcoin trader for violating anti-money laundering (AML) regulations, its first enforcement action against a cryptocurrency exchanger. According to the agency, the exchanger failed to register as a money services business and failed to report "suspicious transactions," among other violations. The exchanger has been assessed a $35,000 fine and is now prohibited from providing money transmission services.

2019 Investments in Crypto and Blockchain Startups at $850 Million

Source: Reuters

According to data compiled by Pitchbook for Reuters, venture capital investment in crypto and blockchain startups has reached $850 million so far this year.

EEA Launches 'Token Taxonomy Initiative'

The Enterprise Ethereum Alliance has announced a "Token Taxonomy Initiative" to develop universal definitions for tokens to encourage their interchangeability across blockchain platforms. Members of the initiative include Microsoft, R3, ConsenSys, IBM, EY, Accenture and Intel.