Repairing Broken Social Media Models: The Power of Ownership
By Al Morris, CEO and Co-Founder of Koii Network
How the next generation of influencers will fuel blockchain adoption and a more equitable content economy
Social media is broken, and with it, so is the internet. There are more than 4.6 billion social media users globally, but how many of these accounts belong to actual human beings? Leading social media networks have come under fire for lax security measures. Bots throughout the web are swaying algorithms and news feeds to steer the content that users see. Social media disrupted the internet and moved ownership from the masses to a few central entities. Decentralized social media networks, and more notably, the people and influencers leading the way with Web3 content, have the tools to repair this issue.
By redistributing ownership from platforms to people, decentralized networks can repair the fractured systems in place. The next generation of influencers are leading this shift. By leveraging blockchain to earn fair monetization of their content, creators of all kinds are demonstrating that everyday people play a pivotal role in repairing our information economy.
Distorting the Creator Economy
The concept of social content monetization was unheard of as recently as 15 years ago when a mere 5% of adults in the United States used social media. In 2021, around 200 million social media users leveraged their followings to monetize content, 132 million doing so part-time.
The rise of social media has formed a new economy—the creator economy— an estimated $100 billion industry. But what began as a tool for participants to stay in touch with friends and family has transformed into an ecosystem that dictates how businesses operate and interact with consumers, and that primarily benefits large corporations.
As we look to the future of social media, younger generations signal the shifting ecosystem. Historically, younger consumers tend to follow influencers to new, content-rich platforms. The influencers that they follow are financially motivated, going to the channels where they can earn the most. So to predict where influencers and their legions of young followers will go next, consider where influencers have the most earning potential.
Ortiz-Ospina, E. (2019, September 18). The Rise of Social Media. Our World in Data. Retrieved August 25, 2022, from https://ourworldindata.org/rise-of-social-media
An Exploited Creator Economy and Reallocating Profit to People
While people should ideally reap the profits of their creations, we live in a world where the exploitative platforms hosting the content are seizing the lion’s share of profits, much of which stems from advertising revenue and monetized user data. Creators with large followings can sometimes take home a tiny sliver of ad revenue from their own work, but most are not seeing a single cent of the revenue generated from their content.
Meanwhile, social media platforms continue to profit handsomely from the traffic created by these creators. At the end of the day, money that is the direct result of creativity, ideation, and active participation of billions of users globally, ends up lining the pockets of a few giant corporations. The social media users driving activity ultimately end up working for free.
Now, let’s look at blockchain-based social media platforms. Unlike centralized platforms, they built upon open data sets, allowing and empowering users to choose their own algorithms, and demystifying these kinds of systems via open-sourced code. Rather than being systematically placed into an echo chamber of information based on many reductive, automated, and algorithmic decisions, users have more autonomy over their own content environment and possess the ability to shape it, own it, and explore it without third-party parameters.
Considering the economy created by social media content creation, it’s important to note that 66% of creators who monetize their work do so in a part-time capacity. Allowing them to flourish in new and unrestrained ways on social media is likely to result in an entire generation of content creators that move from part-time to full-time work—and their audiences will move with them. When not restricted by employer guidelines or third-party corporations with vested interests, creators are freer to share opinions, ideas, and perspectives, strengthening public discourse and overall engagement.
Tackling Misinformation & Censorship: Building an Equitable Ecosystem
Today, at least half of American adults get their news from social media, with especially interesting (and often sensationalized) news stories going viral within moments of publication. Intertwined with this are bot networks that are pushing misinformation to targeted users, creating a “news” landscape that is not rooted in professional, verified journalism.
Because of the nature of decentralized social media with open data sets, blockchain-based social platforms have the opportunity to create more open reputation systems. By tying individual identity to a record of content, a new ecosystem emerges in which people and publishers who share pertinent, accurate information, can build a reputation naturally based on factual merit, without the skewed interferences of money, clout, status, or agenda-setting gain. If an account, blog, or piece of content is tied to a less reputable source, it will organically be less prominently featured on users’ feeds.
As the Cambridge Analytica scandal demonstrated, reputable sources are critical to preserving online discourse. Content creators and influencers working in a blockchain-based environment will not only reap the monetary benefits of their own creations, but also build on-chain reputations in honest and transparent ways, benefiting the entire content network and mobilizing their followers to embrace this new technology that is elevating both their individual platforms and the health of the ecosystem at large.
Additionally, under the topic of building a more equitable information economy, it must be called out that decentralized content storage is inherently censorship-resistant, as there is a clear, permanent record of all activity taking place on a blockchain. The benefit of this is clear – content stored on a network of nodes cannot be deleted, altered, or removed. In this way, users are not subject to potential deletion of their content due to opposing a company’s guidelines, and they do not run the risk of losing all of their work in the event of economic failure or the decision to shut down the platform.
This permanence of information also serves users as those who deliberately spread misinformation cannot shirk ownership of their bad actions. Because influencers and content creators often rely on “authenticity” as a core pillar of their success, and because a blockchain-based environment bolsters authenticity through complete transparency, Web3 promises to be a place of creative flourishment for the next generation of influencers and their followers.
Baran, P. (1964). On Distributed Communications, Memorandum RM-3420-PR. Santa Monica, Calif.: RAND Corporation
Lastly, blockchain-based social media is by nature community-governed. This means that influencers and their audiences have more potential for long-term success, as the community itself drives the changes that the community wants to see. Instead of being subjected to forced feeds, design layouts, and guideline changes at the whim of corporate desires, these communities can make decisions collectively, holistically, and continuously.
As we know, community engagement and devotion is also a key focal area for successful content creators. The community-centric quality of decentralized media is bound to appeal to followers looking to feel seen, included, and involved.
Turning the Tides of the Creator Economy
Just as influencers have mobilized their followers in their shift from a static photo-sharing platform to a short-form video network, the next wave of influencers and content creators are leading their followers in adopting the next iteration of technology that improves engagement and experience – only this time, blockchain will ensure that creators hold on to the value garnered by their creations.
Leaders across the technology and financial sectors are already investing in decentralized, user-governed alternatives, illustrating their belief in the value of Web3-native social media networks, and increasingly focusing their efforts on building out the space.
While a clear front-runner has not yet emerged, investments are continually being made and more networks are becoming available to users, spurring tangible momentum. While web2 social media networks were created to connect, they’ve devolved into user exploitation. Blockchain’s transparency and equitable value distribution can reset social media, and the platform that best enriches its users lives will ultimately triumph as the space reaches further development.
While these advances and the complete disruption of the flawed creator economy won’t happen overnight, content creators are recognizing the platforms that best suit their needs, and as the blockchain industry continues to grow, decentralized social media is one of the most compelling use cases for the technology.
Distributed social media platforms will disrupt the creator economy as we know it, and are the first step in directing deserved compensation to the people powering these platforms. The next 5 years will see a massive transfer of wealth to end users – so there is still a lot of money to be made for savvy investors who help accelerate the transition.
About the author:
Al Morris is the CEO and co-founder of Koii Network, an innovator and technology leader building an operating system for decentralized digital storage. Al formed Koii Network in 2020 to broaden the range of possibilities for the future of Web3, with an emphasis on creating decentralized storage systems as a way to create an unbiased and transparent network. Al co-founded Blockchain Institute Chicago (WeTeachBlockchain.org) to help educate the public and promote the adoption, development, and use of blockchain technology.
Outside of his core responsibilities, Al is an advisor at XYZ Technologies as well as other projects within the blockchain and crypto community. He is an avid NFT collector, which drove his passion for creating Atomic and Dynamic NFTs at Koii Network, the fundamental building block of the fair, community-owned Internet.
Al has deep knowledge and background in software development. Earlier in his career, he worked at Grantek and ShareaSale.com as a systems designer and integrations specialist, respectively.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.