Remember last month when WhatsApp, Facebook, and Instagram were all unavailable for several hours? Not only did people find it difficult to communicate with one another, but many small businesses suffered because they couldn’t contact their customers.
Cryptocurrency supporters were quick to point out that such an outage would not occur on decentralized social media platforms. They may be correct, but decentralized social media is still in its early stages.
This is why Reddit co-founder Alexis Ohanian’s recent announcement is so intriguing.
Seven Seven Six, Ohanian’s venture capital fund, and the Solana Foundation will invest $100 million in developing decentralized social media on Solana (SOL). Ohanian describes it as “the next wave of social.”
At the popular cryptocurrency’s recent Breakpoint conference, Ohanian made the announcement alongside Solana co-founder Raj Gokal. Both men discussed the enormous potential of decentralized social media and the rate at which it could develop.
Web3 is a term used by some to describe decentralized social media. If Web2 is the current internet, Web3 is the internet of the future. Ohanian describes it as a “compelling” blockchain-based internet.
Decentralization entails eliminating the middleman and relying less on intermediaries. One advantage of decentralized social media is that it is simple to switch to another provider if one service fails. In theory, there would also be fewer outages because there would be no single point of failure. Furthermore, it gives users far more control over their digital identities.
There would also be less risk of data hacking and censorship, though it is unclear how a decentralized system would screen for offensive or incendiary content. The idea is that the community will step up and take on a larger role in governance, which may be a little idealistic. This is just one of the challenges that decentralized social media projects will face.
In terms of social media, it may imply that we will move away from having large entities such as Facebook in the middle of our communication. Though it’s worth noting that big social media networks are also investing in decentralized models.
Gokal believes that new players will play a role in addition to the existing platforms. “There’s room to grow in all directions,” he said. “It doesn’t have to be the old social platforms converting; we can build new ones, and it doesn’t have to be competition or winner take all.”
One aspect of Web3 that has Ohanian excited is the way we will begin to be rewarded for our online activities. It’s something he understands firsthand, having described the significance of upvotes and the karma score in Reddit’s evolution.
Web3 expands on this concept. People would be able to own the content they create in the new internet era. And Ohanian explained that users could be rewarded for participating in social media and playing video games. He predicted that one day his daughter would be astounded that he had spent so much time online without earning any rewards.
With Web3, we’re looking at a shift in how we behave online and interact with social media. But it’s unclear how that new era will look and whether it will be appealing to regular people. Cryptocurrency would play an important role in Web3 in a variety of ways, not the least of which is that the online rewards Ohanian is excited about would almost certainly be paid in cryptocurrency. However, there are two major takeaways for investors from this announcement.
First and foremost, Solana remains at the epicenter of major developments in the cryptocurrency world. The rapidly growing cryptocurrency, which recently surpassed Cardano (ADA) in the crypto charts, continues to set new highs. Several factors, ranging from regulation to technical difficulties, could slow its momentum, but for the time being, it is a force to be reckoned with.
Second, decentralized social media is an important trend to keep an eye on. As a crypto investor, it’s critical to keep an eye on industry trends because they can help you figure out what the next big thing is. That doesn’t mean you should rush to your crypto app and buy any token associated with decentralized social media. However, it is an area to keep an eye on, and it may be worthwhile to add social-media-focused cryptos to your watchlist.