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At the beginning of 2018, Facebook CEO Mark Zuckerberg announced that he planned to look into blockchain as part of a new business model for the world’s most popular social network. Predictably, the Internet had a collective freak-out. How exactly would Facebook be able to leverage blockchain in the future?
A blockchain model for social media
Certainly, there is a precedent for social media companies embracing blockchain. One of the most talked-about models is Steemit, a Reddit-like decentralized social network. The concept of Steemit – much like the concept of Bitcoin – is a bit hard to wrap your head around simply because it is so revolutionary.
Steemit is a completely decentralized network that depends on its users to keep everything running smoothly. The crowd is able to reward other members of the crowd that are posting quality content. In fact, you’re able to earn cryptocurrency rewards for participating in the network. You don’t just get rewards for posting great new content, you can also participate in the rewards if you help to surface great content for the crowd.
There’s a lot to unpack here, obviously, but it’s possible to see the broad outlines of how the Steemit blockchain concept might be applied to Facebook. For one, you might get rewarded for posting really great content by getting paid out in cryptocurrency. Imagine posting an amazing photo of your pet cat on Facebook, getting hundreds of likes by your friends, family and co-workers, and ending up with a few fractional shares of Bitcoin in your “Facebook wallet” by noon. You might also get rewarded for curating “real news” and helping to spot “fake news.”
Blockchain and efforts to avoid censorship
Another idea might be using blockchain to circumvent media censorship in nations like China and Iran. One key characteristic of blockchain is that it is a decentralized ledger. It is updated constantly, and it is up to users to verify the information added to blockchain. Since it is completely decentralized, it is also beyond the purview of national censors. (Just like Bitcoin is beyond the purview of the U.S. Federal Reserve or any other central bank.)
Content posted on blockchain would not be able to be altered or deleted by governments, making Facebook the de facto place to go for dissidents, whistleblowers and investigative journalists. Posting an article about government corruption in China might get you locked up in jail these days, but not if the article were posted anonymously on the Facebook blockchain.
Blockchain and P2P transactions
Another potential idea for blockchain is some sort of solution that involves peer-to-peer (P2P) payments between Facebook users. This solution would be similar to a Bitcoin type of model, in which currency transactions can occur without the use of third-party financial services providers. When you pay with Bitcoin, there is no middleman – and, hence, no fees. So, unlike credit cards, PayPal or other payment platforms, there’s nobody taking a cut of every transaction. It’s easy to see how some sort of “PayPal killer” might be of interest to Facebook. Presumably, Facebook would integrate this solution into an offering like Facebook Messenger.
What’s next for Facebook?
The problem right now, as even Zuckerberg would probably freely admit, is that nobody really understands how blockchain works or how to make money from it. There are so many cryptocurrencies and “altcoins” out there that there is a real risk of a bubble. But as Facebook has shown with its early investments in artificial intelligence (AI) and virtual reality (VR), in today’s rapidly changing world, it’s absolutely incumbent upon all social media companies to anticipate changes coming around the corner and continue to innovate.