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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 ask.fm. Ask.fm 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.

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Distributed Summary:

  • Coinstar and Coinme team up to offer bitcoin-for-cash transactions at grocery stores around the country
  • Twitter users have shared photos of the on-screen process

Here Come the Three Bears

Joseph Lubin Joins ErisX

Distributed Summary:

  • The founder of ConsenSys joins the board of ErisX, a spot and futures crypto asset platform
  • Could precede additional assets becoming available on the platform
  • Signals potential optimism for 2019 crypto asset market

Legislation From Wyoming Could Enable Blockchain-Based Stock Certificates

Distributed Summary:

  • Bipartisan bill would allow corporations to use blockchain tokens as their only form of stock certification
  • Comes on the heels of other pro-blockchain legislation passed in the state
  • Successful implementation under these blockchain-friendly laws may change legislation elsewhere