Social Media on the Blockchain (SocialFi) Could Be Key to Mass Adoption
By Jayson Tan, founder of Torum
Mass adoption has been a long-standing goal for the blockchain and crypto industry. Almost every business in this space strives for mass adoption in one way or the other. But, with just over 300 million crypto users and 70 million blockchain wallet users, there’s clearly a long way to go. Reasons like lack of government recognition, lack of understanding of the technology, and high-risk factors have been credited as deterrents to mass adoption. In this long list, the main deterrent still remains to be the lack of a strong enough use case.
The blockchain industry today is filled with unprecedented innovation. Yet, these innovations mostly focus on short-term growth and do not provide a strong reason for people to transition from centralized systems to decentralized ones.
In the early 2000s, the internet was also in a similar situation. Lots of potential but little value. However, with the launch of social media, particularly Facebook in 2004, the whole dynamic changed. The internet saw an influx of new users from across the globe who perceived it to be one of mankind’s greatest innovations.
Now, even after two decades, it is still social media that could propel the blockchain-space towards mass adoption.
Facebook to Meta: The beginning of the big picture
Facebook is estimated to have over 2.89 billion users as of 2021. And after ruling communication in Web 2, Facebook has recently made strides in its transition towards Web 3. The company now calls itself Meta and is in the works to build the world’s biggest social media metaverse. When this unfolds alongside Facebook’s cryptocurrency Diem, nearly 3 billion people worldwide may be introduced to cryptocurrencies and blockchain.
Blockchain is fundamental to operation in the metaverse. Digital assets like NFTs will define ownership on the metaverse and cryptocurrencies will power the new digital economy. So, Facebook’s transition to the Meta is indirectly a blessing in disguise for the blockchain industry.
Moreover, even Twitter is now planning to integrate cryptocurrencies into the platform with things like Bitcoin tipping for creators. Given Twitter’s vast user base of 192 million daily active users, Bitcoin tipping smells like mass adoption. Reddit also supposedly has plans to create an NFT marketplace in the near future and there are rumors about the platform converting people’s Karma points into crypto tokens. With the world’s major social networks taking strides to incorporate blockchain technology at their core, a significant portion of the world’s population could jump on the crypto bandwagon.
SocialFi: The new name for mass adoption
While Facebook, Instagram, Twitter, and YouTube are now synonymous with the word social media, this is probably about to change soon. Blockchain technology is giving birth to a new wave of social networks that could be bigger and even better. These new networks take the existing social models and give them superpowers. Data scams, uninformed algorithm changes and unnecessary content censorship could become a thing of the past. This is because these new social networks are owned and run by the community.
Along with this, they also bring the possibility of social finance (SocialFi). Social influence on these networks is tokenized and users can get direct monetary benefits from being influential figures on these platforms.
The rise of these new social networks and their SocialFi integration is probably one of the best uses of blockchain technology and could be at the helm of mass adoption.
Innovation meets capital to propel mass adoption
With major social networks incorporating blockchain technology and SocialFi projects coming into the limelight, there has been a recent surge in venture capital funding. In Binance Smart Chain’s recently announced $500 million investment program, SocialFi has been mentioned as one of the main areas of interest. Solana Ventures also announced a $100 million funding for web3 social startups in association with Reddit’s co-founder Alexis Ohanian.
Moreover, in what could be the largest crypto fund ever, the venture capital firm Paradigm announced a $2.5 billion funding for web3 and crypto startups. It seems as though the venture capital market now recognizes the potential of blockchain technology and is now pouring in money for promising SociaFi projects.
With an influx of new VC funds, the crypto and blockchain industries are also full-throttle on the development of the next generation of social media which could, in turn, appeal to the masses and bring them on-chain.
Creating the universal appeal
Mass adoption is one of those things that is easier said than done. It is quite a challenge to convince a significant portion of the population to adopt an emerging technology. This is where social media could be crucial. Social media networks have a universal appeal and with things like SocialFi and decentralization coming into the picture, they could be the very key to unlock mass adoption.
About the author:
Jayson Tan is the founder of Torum, the world's first social media platform that is specially designed to connect cryptocurrency users. Backed by AU21 and Consensus Lab, Torum has raised a strategic investment from Huobi Ventures and KuCoin Labs, the respective investment arms of Huobi Global and KuCoin, two of the world's largest cryptocurrency exchanges.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.