With the market value of cryptocurrencies pushing $1 trillion in 2018, blockchain technology is one of the most promising upcoming shifts in the information technology industry, but what exactly is it?
Blockchain can be thought of as a highly secure digital ledger (think spreadsheet) that lives on a global network of computers and enables peer-to-peer transactions to take place. This network allows a group of connected computers to maintain a single ledger rather than having the data owned by one manager.
There are a variety of blockchain based systems on the market today. Most commonly these systems process information by putting them into groups called “blocks” and linking them in a chronological order to form what’s called a “chain”. This creates a blockchain. Before new information can be added to the ledger, blockchain uses mathematical functions and code to approve and verify transactions. Each piece of information must answer a complex mathematical problem created by a cryptographic hash function (a mathematical algorithm) before it can be added. If the answer is correct, the information becomes part of the blockchain; if the answer is incorrect, a consensus is reached before the information gets recorded.
Why is this valuable?
Blockchain technology is a revolutionary way of organizing and accessing large amounts of data. It can be applied to numerous types of transactions – from those that are of monetary value to those that collect personal information, such as social media platforms.
Social media today
Collectively, social media platforms have an estimated 2.46 billion users and billions of pieces of content generated and shared across networks each day. Facebook alone estimates that approximately 100 million hours of video is viewed on its platform daily. To join the conversation and become part of the network comes at a price to the user. Concerns over privacy, content distribution and transparent advertising are only some of the challenges that exist within the social system today.
Blockchain social media innovators such as Marcel Füssinger, co-founder and CEO of SocialX, are bringing forth decentralized social communities that can change the platform in three ways:
- Giving ownership of content back to social media users
- Allowing the community to decide what content is valuable
- Creating a reward system where users benefit for contributing and engaging with content
1. Giving ownership of content back to social media users
Large amounts of content have created a stepping stone for advanced algorithms to be active in the background of social platforms pushing content through to user feeds. Over time, these algorithms have been altered, making it much harder for businesses to earn organic engagements and nearly impossible for users to avoid unwanted advertisements.
Furthermore, content on most social media channels gets absorbed by the platform – meaning, when users upload videos or photos, they authorize platforms to reuse their content for a variety purposes. This can have of a larger monetary gain for the platform instead of the user. With blockchain, social users rather than the platform own posted content.
2. Allowing the community to decide what content is valuable
We live in a world where fake news travels faster than true news. To better understand how false news spreads, Soroush Vosoughi, Postdoctoral Associate at MIT’s Laboratory for Social Machines, monitored a set of rumors on Twitter from 2006–2017 and concluded that false news reached more people than true news.
The top 1% of rumors reached between 1,000–100,000 people, compared to the truth that hovered around 1,000 people. Emotional reactions were thought to be responsible for the difference. Leveraging blockchain in social communities would allow for content that’s posted to be accurate because a piece of information cannot be added to the chain unless it is verified and approved by the entire network.
3. Creating a reward system where users benefit for contributing and engaging with content
The reward users get from social media platforms can be measured in the form of followers and engagements. Users liking, commenting and sharing content across networks daily creates a gold mine for social media platforms and advertisers. In 2017, Twitter earned 86% ($2.1 billion) of its revenue from advertising.
Blockchain-based social networks such as APPICS are looking to change this by rewarding creators, influencers and users of content in the form of cryptocurrency. Thus, rewards are returned to users instead of being absorbed by the platform.
Blockchain-based social media and the future
The mechanics of blockchain will produce a different user experience than what we know today, where account logins signify a surrender of personal information to the platform. With blockchain, a user could have a profile as an extension of his or her browser that identifies ownership of a variety of accounts. If the user goes to an identified social media account, the platform will recognize the user without the exchange of personal information.
Putting data back into the hands of individuals means people will have more control over who has access to their personal information. However, this presents a challenge for marketers: If marketers do not have access to personal data, how can we create customized and targeted experiences?
Another trend to watch for is a spike in the amount of content that’s created for social media platforms. If rewards are given to creators, influencers and users of content, this could cause an uptick in the amount of content that’s produced and make it more difficult for content to be seen.
While we can’t predict with certainty that blockchain will outdo the current social system, we know that its uses are vast and valuable. If we do arrive at a complete blockchain-based social system, we will still be faced with challenges. However, as users, we will have more control over our personal information, content and the access to accurate information.
If you’re interested in innovation in marketing, why not attend the Festival of Marketing in London, where one of 10 stages will cover innovative uses of new technology in our industry.
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