cryptocracy

Freelance fintech writer. Editor, publisher of Cryptocracy at https://cryptocracy.substack.com/. Published fiction writer and poet.

I believe there’s a role for cryptosocial media. I wouldn’t be writing a book about it if I didn’t. But what is that role? There are two possible paths forward.

The first path is to aim for the stars. It’s the path of disruption. The rewards, if successful, are legion, but it’s a very difficult path and one with lots of resistance. If unsuccessful, the rewards will be replaced by collective shame.

The second path is to serve a niche within the social media category. This is the path that most cryptosocial media sites seem to be taking currently. It’s the path of least resistance. It’s also a path with fewer rewards.Those rewards, however, can be greater for a smaller number of people. It involves appealing to the narrow field of people with an interest in cryptocurrencies and blockchain technology. It requires honing in on a very narrowly defined niche and serving that niche better than anyone else.

Every cryptosocial media platform and protocol has to answer this question for itself. Do you want to play King of the Hill with Facebook and/or Twitter, or do you want to strive to fill a niche that is currently not being served and do that better than anyone else can?

Of course, there is the possibility that following the second path could lead to the path of disruption. Maybe the first stage of development, the current stage, is setting the groundwork for the future. In this stage, it’s important to establish the value of cryptocurrencies by giving crypto enthusiasts a platform of their own. As older generations die off and younger generations grow up, the cryptosocial media ecosystem could eventually take over and replace legacy social media. This has happened in other industries.

At one time, for instance, radio was all the rage. No one owned television sets. Eventually, everyone had at least one television in the home and radio became a niche entertainment medium focused on popular music and talk shows. The airplane industry replaced the passenger train, then trains became a specialty mode of transportation for moving products. Things change, evolve. And I suspect that social media will evolve, as well. We are at the very beginning of a new cultural revolution.

Developing a Cryptosocial Niche

In 2017, futurist Bernard Marr said blockchain technology development is where the internet was in 1997. That was the year Six Degrees, the first recognizable social media platform, launched. It was also one year before Google launched.

Four years later, have we come that far?

Today, there are hundreds of cryptosocial media platforms in development, and many more have failed. In 2017, there were a handful.

In terms of design, the sites being developed today, five years after Steemit’s launch, are a far cry more attractive than Steemit ever was. I can look at Publish0x all day. Even Minds, the first cryptosocial platform to market (though its token wasn’t launched until 2018, a couple of years after Steemit’s), is more visually appealing than Steemit. That doesn’t mean it’s a “better” site as “better” is in the eye of the beholder.

Another way progress has been made is in the area of specialization. Interledger, a cross-chain technology, has made Coil possible. Already, some major publishers (Conde Nast, for instance), has adopted it. LBRY and PROPS specialize in video content. Voice and Minds are primarily blogging platforms. Increased specialization should give birth to new forms of cryptosocial media over time. Where today we can read about decentralized file sharing, decentralized finance, decentralized video content, and more, we may someday consider decentralized books just as valuable as hardback books were in the middle of the 20th century.

The development process may not be year-for year. After all, bitcoin was created in 2008. If Marr is right, then the first nine years of blockchain development took place in the same amount of time as the first seven years of World Wide Web development (and the first 14 years of internet development). If the trajectory is the same, we could be looking square in the eye of the blockchain bubble bursting soon.

On the other hand, we could be on the verge of an explosion of enterprise much like the internet immediately following the dot-com bust. Friendster and LinkedIn both launched in 2002, MySpace in 2003, Facebook in 2004, and YouTube in 2005. Whether the bubble pops before we hit that stride, one thing remains clear: We are at the infancy stage of cryptosocial development. Greater things are down the road.

That said, the only way to get to those greater things is for blockchain developers, particularly cryptosocial developers, to continue experimenting, building on past successes, and learning from mistakes. There may be a harvest of great crop just ahead, but we will likely have to endure a heavy storm or two that might take out a few of our choicest fields today.

Cryptosocial developers can hasten along the entire industry by continuing to develop their platforms and protocols. They can take a page from the military playbook and continuously develop their positions. Go one step further even and walk out front about a hundred feet, look back at your product, and take a look at what everyone else sees. Are there weaknesses in the product or ways to exploit the technology for the wrong kind of gain? Is the look and feel attractive or does it make people want to run for a bunker?

It’s hard to be a disruptor. It’s much easier to fill a void, and I think that might be the best path forward for the industry at this time. Find a void and fill it.

DISCLAIMER

I am not a financial advisor, nor do I give financial advice. The above information should not be considered financial advice but is for informational purposes only. Neither I nor Cryptowriter are responsible for financial losses incurred as a result of acting on this information. Please consult a financial advisor before making any financial decisions.

This post is published for Cryptowriter in association with Voice.

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I’ve spent several months writing a book about the intersection between blockchain technology and social media. For the past couple of years, I’ve looked critically at more than 100 different cryptosocial media platforms and protocols. Just as there have been social media platforms in the past that were quite popular but have since gone by the wayside, either shutting down completely or losing so much traffic and a percentage of their user base to other platforms, I fully expect some of the current cryptosocial communities to lose steam.

On the whole, cryptosocial seems to be a niche product. Few people outside of cryptocurrency enthusiasts and blockchain developers have much of an interest. I hope that changes. But for now, here are 6 cryptosocial communities that I believe we’ll still see around in five years.

Which Current Cryptosocial Communities Have the Best Chance for Long-Term Survival?

First, I’d like to define what I think long-term survival is. According to the Small Business Administration, only two-thirds of businesses with employees survive two years and only 50 percent make it past five. As a business ages, its chances of survival increases.

The first cryptosocial community saw its birth in 2016. Five years in, it’s still running. But what about the rest of the pack? These are the cryptosocial communities I think we’ll still see around in five years:

1) Hive – Hive is a hard fork of Steemit, the first real cryptosocial community with a native cryptocurrency. To be transparent, I have not played on Hive due to a number of reasons I won’t go into. But I think Hive has some staying power because it has a strong community carried over from Steemit. Many of the top Steemit witnesses went with the fork and they took their followers and fans with them. The most popular blockchain-based game, Splinterlands, is native to Hive. Hive is also listed on over 20 exchanges including Binance, BlockTrades, Bittrex, Huobi Global, Upbit, and Steem Engine.

2) Minds – As a platform, Minds is the oldest among those in the cryptocurrency ecosystem. It launched in 2015, though its ERC-20 token didn’t launch until 2018. Nevertheless, it has a strong community and now that it’s past its five year testing period will likely survive another five years unless a major cryptosocial platform makes a big splash and starts to divert loyal users.

3) Steemit – Steemit is the first cryptosocial platform to launch with its own cryptocurrency and its own blockchain, in 2016. I’ll reluctantly add it to this list because I think Steemit’s best days are behind it. But given the unsteady nature of the cryptosocial ecosystem and few strong contenders, I do believe Steemit has a little bit of life left in it. Plus, the new owner of Steemit Inc., Steemit's parent company, Justin Sun, always has a few surprises. As founder of the TRON blockchain, he has proven he knows how to build a business.

4) Publish0x – Publish0x is shaping up to be my favorite cryptosocial platform. It doesn’t have a native cryptocurrency. Instead, the platform rewards users (bloggers and readers) with ETH, AMPL, and FARM. There is a thriving community of loyal users churning out strong crypto-related content. One of the distinctive features of Publish0x is its partnerships with crypto brands that promote contests with crypto rewards for Publish0x users. I think Publish0x has strong staying power.

5) Coil – Coil is more of a protocol than a platform, though it does play host to blogs. I haven’t seen much readership on my Coil blog, but I do get a small amount of crypto each month from readership on my Coil blog as well as my professional blogs and YouTube channel. Coil allows users to add some code to their web properties for monetization at no cost to readers. While I believe Coil has some great potential, that potential is not currently fully realized. Coil will need to capitalize on Medium’s recent decision to change its editorial policy and pick up some strong content creators with a lot of followers. Plus, it needs to make its mission more widely known. It wouldn’t surprise me to see Twitter integrated with Coil in the same manner that YouTube is currently integrated, but it’s just as likely that Twitter will create its own monetization protocol. Coil is a great idea whose benefit has not been discovered.

6) PROPS – PROPS is a YouTube alternative with a “tokenized digital media ecosystem.” Endorsed and supported by YouTube creator Philip DeFranco, I think PROPS has a lot of potential for growth.

The Difficulty of Predicting the Future

It’s difficult predicting the future, especially in an environment of instability and unpredictability. It’s just as likely that a new upstart within the next five years could capture the public imagination in a way that none of its forebears have. That said, there are a few newer cryptosocial platforms I’d like to add to this list but for one reason or another I have difficulty doing so. Here they are:

* Voice – I like Voice, but it has not yet launched a token. It’s got some good things going for it, one of which is the fact that it has attracted several excellent content creators to the platform. However, it doesn’t seem to be growing its user base all that well. And Block.one’s loss of co-founder Dan Larimer early this year didn’t help. I’m not a fan of pinning all the hope of a project’s success on one person, however, Larimer has a track record of building something great then leaving it in the hands of others, which then leads to a decline in value. First, it was Bitshares, then it was Steemit, now it’s Block.one, the parent of Voice. Plus, being that it’s in its infancy, Voice still has a lot to prove.

* Mastodon – I love the concept of Mastodon, but it just doesn’t seem to be catching on. Mastodon is about as close to living up to the ideal of decentralization as any project, but it doesn’t appear to be growing. I'd love to see it take off.

* LBRY – LBRY is another great concept that doesn’t seem to be getting traction. Some day, I hope to see a truly decentralized multimedia publishing service that takes the world by storm. LBRY is a good start.

I hope you don’t take any of this as gospel. I’m not a prophet. There are a lot of blockchain projects that are interesting in their own right. But being interesting doesn’t mean it will succeed. I think the cryptosocial space has a lot of potential for transforming social media into a user-centric service rather than an advertiser- and shareholder-centric service. But only time will tell.

DISCLAIMER

I am not a financial advisor, nor do I give financial advice. The above information should not be considered financial advice but is for informational purposes only. Neither I nor Cryptowriter are responsible for financial losses incurred as a result of acting on this information. Please consult a financial advisor before making any financial decisions.

This post is published for Cryptowriter in association with Voice.

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➡ Cryptobloggers: https://cryptobloggers.us

This post was first published at Voice.

It doesn’t take long before someone new to cryptocurrencies discovers some similarities, and a few differences, with real-world economics. In fact, at the most basic level, there is no difference at all. All currency values are directly tied to the law of supply and demand, for example. Beyond that, there are some ways that cryptocurrencies act differently than real-world currency.

In the U.S., if the Fed doesn’t think there is enough cash floating around, they can print more. What happens when the Fed prints more money? The value of dollars already in circulation goes down. That can’t happen with bitcoin.

Bitcoin is programmed to max out at 21 million. Once 21 million bitcoin have entered circulation, there will never be any more created. That scarcity ensures that bitcoin will maintain its value. In fact, it’s likely that bitcoin will continue to increase in value as more bitcoin are created because it means that more people are adopting it as currency, more people are holding it, and more people are using it. As more bitcoin is produced, the more difficult and expensive it will be to create new bitcoin.

Cryptosocial Communities Could Become Financial Markets Unto Themselves

Cryptosocial communities are like real-world markets. Where people gather to engage in commercial activities, there will be a supply and demand curve based on the number of people interacting with each other in the market, the value and type of goods being sold at the market, and whether consumers at the market are interested in those goods.

For as long as civilizations have existed, people have gathered in social circles to buy, sell, and trade. Early traders may have exchanged donkeys for wheat, or swords for hand tools. Markets allowed people to gather in one central place to conduct their trade activities, financial affairs, and socialize in one location.

Cryptosocial communities are not yet that advanced, but blockchain developers are laying the groundwork right now.

It is important for blockchain developers to consider how cryptosocial economies grow. One way to do that is to study the economic systems of the real world.

How did the U.S. rise from being a colony of a superpower in the 18th century to being the largest superpower in the world in the 20th? There were forces, both internal and external, that influenced that rise and which simultaneously influenced the decline of previous superpowers. While Steemit, Minds, and Voice aren’t necessarily aiming to become superpowers, they are aiming to create economies. Therefore, a study of economics is prudent.

9 Elements of a Strong Crypto Economy

I do not claim this list is exhaustive, but here are 9 elements of what I’d consider a strong cryptoeconomy.

1) Behavior incentivization – In society, laws create a fair playing field for all citizens. It’s just as important to incentivize good behavior as it is to discourage bad behavior. That’s why we give “keys of the city” to certain people or grants and awards for good citizenship and lifetime contributions. We value those who add value to the community. Cryptosocial platforms must likewise incentivize good behavior through a rewards system that encourages value creation to the community.

2) Cryptocurrency protection – An economy is only as strong as its currency. Cryptosocial platforms are attempting to build economic and social communities in a way that’s never been done before. To be desirable, any rewards offered to cryptosocial citizens must have value. That could be monetary value, but it doesn’t need to be. A platform’s cryptocurrency could have utilitarian purposes—buying experience-enhancing items on the platform, or other merchandise, boosting posts or advertising, tipping other users, and more. If the coin or token holds value, people will work hard to earn it and the community will grow stronger. On the other hand, if a cryptocurrency has no value, people will not stick around to form a community around it.

3) Currency demand – Whether coin or token, currency demand goes hand in hand with protecting the value of the cryptocurrency. If no one wants it, no one will respect the rewards system and people will leave the platform. Or worse, they’ll cash out and suck the value from the economy.

4) Supply control – Every economy has two sides: A supply-side and a demand-side. Just as it’s important to create demand, it’s also important to control supply. How users are rewarded matters, and how much they are rewarded matters. Dole out too many tokens too soon and the platform will suffer from an oversupply of cryptocurrency, which will devalue the economy. If the rewards are too small, users will be disheartened and go elsewhere. Focusing solely on supply or demand is a terrible way to build an economy.

5) Scarcity – An unlimited supply of any currency is good way to devalue it. Take U.S. dollar, for instance. Every time the Fed prints money, the dollars in circulation lose value. Bitcoin has built-in scarcity. There will only ever be 21 million bitcoin created. That ensures that those already in circulation hold their value. It’s imperative that cryptosocial platforms create scarcity. How that happens is not as important as the necessity of it happening.

6) Personal, platform, and cryptocurrency security – This goes without saying, but a platform that is easily hacked will lose participants. The cryptocurrency will not hold value, and it will likely lose value.

7) Networking – The main reason people join social media platforms is for the networking. Too much focus on the rewards system to the detriment of tools that encourage networking and community-building will simply lead to a dog-eat-dog bumrush for more gold. Platforms need to focus on the community aspect of social media without ignoring the clear benefits of the cryptoeconomy as a whole.

8) Public good protection – Trouble makers need to go. Any platform that tolerates copyright thieves, child pornographers, and other ne’er-do-wells is asking for trouble—legal and social. The legal troubles could land founders and managers in jail or facing hefty fines. But the public relations trouble could kill the entire economy. Literally. In the real world, law enforcement serves this function. Cryptosocial communities are left to the devices of human authority and code.

9) Community expectations management – People are harsh critics. One man’s paradise is another man’s hell. Cryptosocial platform builders need to keep in mind that everyone’s tastes are different. Game of Thrones might be entertaining, but it’s not everyone’s cup of tea. Some people prefer Little House on the Prairie and Leave It to Beaver. Not only that, but cryptosocial platforms need to give users control over the content they publish as well as the content they view. It’s fine to offer a platform that maximizes freedom of expression, but in doing so you’ll limit your market and your economy because some people don’t want to gawk at breasts all day or read endless political rants. If you’re going to allow the most risque content, consider giving it a NSFW rating or allow users the ability to block the content they don’t want to see. This is practical common sense, but I’m surprised at how many platforms don’t take it to heart.

This is merely a start. It’s intended for discussion, not a list of bylaws. That said, in cryptosocial communities, the code is the law. It establishes the rules and enforces them. Put some thought into the kind of community you want to build and write the code to that end.

DISCLAIMER

I am not a financial advisor, nor do I give financial advice. The above information should not be considered financial advice but is for informational purposes only. Neither I nor Cryptowriter are responsible for financial losses incurred as a result of acting on this information. Please consult a financial advisor before making any financial decisions.

This post is published for Cryptowriter in association with Voice.

*If you enjoyed this content feel free to use our ️*EXCLUSIVE SIGN UP PAGE to skip the queue and gain full access to our Cryptowriter community.

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In my last post on decentralization, I talked about how the early internet was decentralized but slowly morphed into the centralized web we have today. I also shared that I don’t think decentralization will cure all the ills of the modern internet. In fact, it might make some of them worse. Today, I’d like to discuss why I think social media is ready for decentralization.

The Supply Side of the Internet

The internet we know today looks the way it does because developers, builders, and creators developed, built, created, and attracted users to their privately-owned domains. The result has been a steady tilt toward centralization causing the web to look a lot like the real world. In finance, for instance, the money supply is dictated by one large central bank, which dictates the monetary policy for all the other banks and financial institutions. America, however, did not start with a central bank. It started as a group of colonies decentralized under one national umbrella with a Constitution that defined the limited powers of that national government. Over time, the country has incrementally migrated toward centralization.

No one clamored for Facebook. In 1998, there wasn’t a group of internet citizens banging down doors for a better search engine. They were happy with what they had. Supply-side economics. Ronald Reagan would be proud.

Ironically, when Reagan campaigned to be America’s president, he ran on the basis of his supply-side economics policy. His Republican opponent George H.W. Bush called it “voodoo economics.” Why would he call it that? Isn’t supply-side economics the essence of free markets? You make a product, you sell it. That’s capitalism. The economic philosophy America was built upon, right?

That’s an oversimplification that some people would have us believe. It’s true that no one asked for a gas-powered automobile before Karl Benz presented the Motorwagen. But maybe there were a lot of people asking for a faster mode of transportation. A gas-powered vehicle with an internal combustion engine proved to outmaneuver horse-drawn carriages in the long run. The point is, if we rely solely on one side of the supply-demand equation, our economic system would collapse. Who wants to live in a world full of creators making things no one wants or needs?

Innovation always relies on consumers ready and willing to accept what producers and creators make. If you create it and no one wants it, it has no more value than if you hadn’t created it at all.

But imagine what would happen if the entire driving population of North America started asking automobile manufacturers for a mode of transportation that was more efficient, more practical, safer, and faster than the modern automobile. How many automakers would start experimenting with alternatives? In a way, that’s already happened. That’s why we have electric and hybrid automobiles. What’s standing in the way of market dynamics in the automotive industry is government regulation and protectionism, a philosophy that is a byproduct of centralization.

The Future of the Web Is Decentralization

There have been thousands of people asking for a better, more decentralized internet. Among the list are World Wide Web creator Tim Berners-Lee, Twitter CEO and founder Jack Dorsey, Mozilla Co-founder and Brave Browser CEO Brendan Eich, and thousands of blockchain developers around the world.

Again, I’ll reiterate that decentralization will not solve all the problems of a centralized web. Facebook has had many issues (data breaches, censorship, competitive spying, and more). Twitter has been the center of its own controversies, and YouTube too. Not only do these platforms posture as top-down institutions, but they also facilitate third-party abuses such as doxxing, fake news dissemination, fake accounts, and cyberbullying. With decentralized social media, these problems can be mitigated with power and control in the hands of the user rather than in the platform.

Like the beginnings of the internet, the future of the web is decentralization. The time is ripe for decentralized social media, but is there a will? Is it practical? Could it survive?

Those are other questions entirely and deserving of their own treatment. Meanwhile, those interested in a decentralized internet should keep pressing onward and encourage each other to do so.

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Social media has a history that predates the internet itself. Usenet groups were early decentralized messaging applications that utilized the basic infrastructure of the internet for one-to-many communications long before the World Wide Web transformed it into a commercial superhighway. When child pornographers and drug dealers took it over, law enforcement and ISPs effectively shut it down. ISPs were more effective in that regard because many of them simply stopped supporting usenet groups.

The real history of the internet is wrapped up in the lessons we can learn from the successes and failures of the pioneers. Here are five lessons crypto developers can learn from social media of the past.

Great Technology Will Not Improve Upon a Good Idea

MatchMaker launched in 1986 as a BBS-based matchmaking service. For those who don’t know, bulletin board systems (BBSs) were the early internet’s precursor to forums.

In 1992, the company starting providing its services by telnet, an early internet-based communications protocol that used the TCP/IP application technology on which the modern internet is built. In 1996, the owners acquired the domain name matchmaker.com and moved their match making services online. However, two other dating websites beat them to the punch.

Kiss.com had launched in 1994 and Match.com in 1995. Daters officially had their own social networks. Match.com is the only one of the three still operational.

While MatchMaker was able to parlay the internet infrastructure to pioneer online dating, being able to build a website using the tools of the World Wide Web didn’t help it succeed. In the end, the service was not able to compete with Match.com, which became the dominant dating website for several years.

Past Success is Not Evidence of Continued Success

MySpace is an example of a social media platform that rose to popularity very quickly. In fact, it was the first social media website to become an international sensation. New users were automatically connected to site co-founder Tom Anderson, known simply as “Tom.”

Launched in 2003, by 2005, MySpace was the largest social networking website in the world with more than 100 million accounts. Of course, a registered account does not necessarily mean an active account. Many of those accounts were likely fake or inactive. But that didn’t stop News Corporation, owned by Rupert Murdoch, from purchasing MySpace for $580 million in July 2005. One year later, it was the most visited website on the planet, stripping both Yahoo! and Google of the honors. But that status wouldn’t last. The site was overtaken by Facebook in 2008 as the most popular social media site in the world and MySpace soon faded into oblivion. Justin Timberlake purchased MySpace for a fraction of the cost Murdoch paid for it.

Murdoch should have known better. Past success does not mean future success and no social media website proves that more than MySpace. As important as Steemit it to the cryptosocial community due to its early rise to prominence in the space, I do not ever see it becoming as popular as it once was. It will always be hailed as a case study that proves crypto and social can go together, but it has only secured its place as a historic artifact.

You Don’t Have to Be Underhanded to Be No. 1

In 2013, Facebook acquired a company called Onavo. The company develops mobile apps and one which Facebook has found particularly useful is Onavo Protect VPN.

A VPN is a virtual private network that allows users to browse the internet anonymously. Facebook rolled the product into its own mobile app, rerouted user traffic through its own servers, and collected user data in the process. Facebook was then able to use the app to spy on competitors for the purpose of using that information to acquire them.

Of course, that is illegal. Facebook is now facing antitrust litigation for an unrelated matter.

I hope no founders of cryptosocial media platforms end up in that much hot water, but I’m realistic enough to know that it will at some point happen. Steemit was involved in a cockfight last year with Tron founder Justin Sun, an event which led to the Hive hard fork. Where there is power to be grabbed, you can bet someone is going to do something underhanded to grab it. Don’t let it be you.

If You Rely Too Much on Your Code, You’ll Die a Slow Death

Beginning in 2012, YouTube began to demonetize content for some YouTube channels. Over time, they’ve ramped up their efforts and demonetized more content and channels. Popular YouTuber Phillip DeFranco, who has more than 6 million followers on YouTube, has been a vocal critic of YouTube’s policies. Here’s DeFranco discussing how YouTube’s demonetization policies affected one content creator:

https://www.youtube.com/watch?v=SOa6PA8XQtQ

The issue on the surface is demonetization, but the real issue is the technology because what undergirds the actual practice of demonetization is this thing called an algorithm. It’s a program. And it does whatever its programmer tells it to do. The downside is that a progam can flag as positive an event that rational thinking would not consider a trigger for the actual event you want to occur. In this case, demonetization.

What am I saying? Computer programs do whatever human developers tell them to do, but they aren’t capable of rational thinking. So if you hard code into your technology something you want that technology to do, don’t be surprised if the nonrational code interprets something innocuous as a serious trigger event.

Smart contracts are great things, but they can be bitten by their own perfection. And if that happens, the human engineers behind them will take the fall. That’s why Facebook uses hman moderators to sift through a gazillion miles of garbage to catch the trash no one wants to see.

You Don’t Have to Find Yourself Today

Sometimes, people know what they want to be when they grow up at an early age. Other people don’t find out until they’re in their forties. Then, one day they wake up, color their hair purple, pierce their nipples, and shack up in Soho with a surfer dude named Bob hoping their children and third wife will forgive them.

By the same token, the same thing happens with social media platforms. Some, like YouTube, know what they want to be on the day they launch. Others, like Twitter, don’t figure it out until they’ve been taken over by hashtags.

There’s actually nothing wrong with that. If your crypto development team isn’t sure what you want your platform to be when it launches, just launch. You’ll figure it out later. Of course, it would be better if you had a clear vision from the start. But you can still find success on the way to way to beach even if you never make it to the beach.

In the immortal words of John Lennon,

Life is what happens to you

While you're busy making other plans

It’s true of platforms and protocols too. There's plenty of time to find yourself.

DISCLAIMER

I am not a financial advisor, nor do I give financial advice. The above information should not be considered financial advice but is for informational purposes only. Neither I nor Cryptowriter are responsible for financial losses incurred as a result of acting on this information. Please consult a financial advisor before making any financial decisions.

This post is published for Cryptowriter in association with Voice.

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This post was first published at Voice.

Technology is often a double-edged sword, solving one problem while creating another. When that happens, someone else comes along and solves the new problem. That process may take years. The cell phone, for instance, didn’t see the light of day until almost a century after Alexander Graham Bell’s immortal words, “Mr. Watson, come here. I want to see you.”

As with any new technology, the problems blockchain technology solves are related to its features. But what about the hundreds of cryptosocial projects built on top of blockchains? What problems are they trying to solve?

The Problem of Centralization

There’s been a lot of talk about centralization. Facebook, Twitter, Instagram, Snapchat, Pinterest, and virtually every social media platform built before Minds and Steemit were centralized. In truth, centralization is so embedded in the cultural DNA of western civilization that its hard for many people to imagine an alternative. Yet, in the last five years, a new breed of social media has developed that attempts to decentralize what we have come to know as social media.

It’s hard to see how centralization is a problem until you’ve been bitten by it. Since the first millennials were born in 1981, Americans have witnessed an S&L crisis, a Y2K scare, World Trade Center attacks, the 2008-09 financial crisis, more than one global pandemic, and widespread institutional racism. In each case, centralized authority was either the heart of the problem, a part of the problem, or failed to see the problem and ineffective in addressing it.

An article in Inc. magazine lists three benefits of decentralization that are supposed to fix the problem:

1. Trust in centralized authority is replaced with technology where trust is not a factor;

2. Systemic failure is reduced exponentially by the number of nodes that make up the system;

3. No one can censor anyone else because there is no Twitter-like authority to ban someone because some authority doesn’t like what that person is saying.

Certainly, trustless technology is a beautiful dream, but a survey of the cryptosocial media landscape reveals that many of the platforms claiming to be decentralized aren’t really. In 2020, the most successful of the pack, Steemit, experienced a hard fork over fear that a hostile takeover by Tron founder Justin Sun would de-decentralize the blockchain, but the fact that the blockchain had “ninja-mined” staking accounts controlled by parent organization Steemit Inc. is evidence that the founders themselves weren’t committed to decentralization. The fact that there was a parent organization to begin with should have been a clue. And the fact that witnesses could freeze those accounts means that the delegated proof-of-stake (DPOS) mechanism isn’t wholly decentralized.

The truth about trust is, humans have had issues trusting each other since the first two homo sapiens drew their homemade battle axes. It isn’t so much a problem with centralization as it is with human nature.

Granted, a decentralized network is much less subject to hacking and attacks from outside sources than a centralized server. But even bitcoin, as decentralized as its architecture is, is centralizing into mining pools. Therefore, while I’d say decentralization is better security against outside attacks, to the extent that it solves other systemic issues, it also gives birth to others.

I like the idea of no one having the power to ban or censor anyone else from social media. I’ve never been a big fan of former president Donald Trump, but I didn’t like that Jack Dorsey used his power as CEO of Twitter to stop the president from making false claims about a stolen election. I’d rather have seen the two square off with hashtags than to see one cancel the other.

I like it even less that cancel power is being used against private citizens by social media giants. On the other hand, the story of Silk Road should serve as a warning against anyone who thinks unfettered freedom can—or should—go unchecked.

Centralization has its drawbacks, but if I’m being mugged, I certainly hope a police officer representing the centralized state is nearby to catch the ne’er-do-well doing me harm. I’m not holding my breath that decentralization is a panacea for all the ills of centralization that plague us even though I do see clear benefits.

The Problem of Data Ownership

Facebook’s Cambridge Analytica scandal put data security on everyone’s radar. Many people who’ve flocked to Facebook, Twitter, and other social media platforms have assumed or taken it for granted that the platforms would protect their personal information. The truth is, they can’t.

Beyond the data breaches, there lies another issue. What happens when your data is used for purposes you don’t support or endorse?

Any platform that collects your personal information can sell it or use it for nefarious purposes. And it’s likely that such information will be sold multiple times. Buyers can range from anyone who might have a product you’d be interested in to a political party you’d never support. The rule of thumb is: If the product or service is free, you are the product.

In my mind, having control over one’s data is a much bigger benefit than escaping the evil clutches of centralization. In a way, however, this problem is an extension of the centralization problem. We simply can’t trust centralized entities to handle our personal information better than we can do so ourselves. I’m holding out hope that decentralization can solve this problem for us all. So far, while there have been noble attempts, I haven’t seen any breakout solutions hit the market that allow users to completely control their own data. Certainly not any cryptosocial platforms.

The Problem of Transparency

Google has long kept its search engine algorithms secret. They tell website owners to feed their robots with valuable content but don’t give explicit instructions on what that means. Search engine optimizers and website copywriters must guess at how content is indexed and ranked at the world’s largest search engine. While this opaqueness is effective in combating spam and discouraging people from gaming search results, there is a hard truth that must be explored: If search algorithms are so great, then why do they need a human facilitator to tweak them hundreds of times a day in order to manipulate the end result?

Facebook’s algorithms determine what content users see on their news feeds. Why? Doesn’t Mark Zuckerberg trust that his platform’s users know what they want to see?

Who doesn’t want more transparency?

Honestly, I’d never expect a private company to be transparent about its inner workings. That doesn’t mean I expect every organization on the planet to open its books and pretend that every detail belongs in public view. On the other hand, I do appreciate open source projects that allow anyone to assume ownership and responsibility for the success of the ecosystem. I use WordPress every day and it’s about as transparent as they come.

Decentralization can overcome the issues of transparency. Again, I’m hopeful that cryptosocial media can solve the problem of transparency, but to do so, there needs to be an openness by project leaders about the struggles of working with the technology. If platform users don’t understand the struggles of the builders, the builders can’t expect users to make maximum use of the technology.

At the end of the day, transparency is only possible if those investing their time and resources are vulnerable to the forces that threaten their survival, but I suspect protocols, not platforms, are better equipped to deliver the kind of transparency decentralization promises.

Not All Problems Are Created Equal

Not all problems are created equal. Neither are all solutions. There is still a lot of hype in blockchain development circles. Cryptosocial media builders seem to focus on the features of blockchain technology rather than the benefits. This makes it difficult to mainstream the product. While finding solutions to real-world problems is what entrepreneurs are made for, a realistic view of themselves, the strengths and weaknesses of the technology, and end-user expectations are paramount.

I’m on board with the cryptosocial media dream, but I don’t want to live in a dream world forever. No matter how heavenly it appears.

DISCLAIMER

I am not a financial advisor, nor do I give financial advice. The above information should not be considered financial advice but is for informational purposes only. Neither I nor Cryptowriter are responsible for financial losses incurred as a result of acting on this information. Please consult a financial advisor before making any financial decisions.

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Online games have been popular since the word “online” has been used as an adjective. The earliest online games were extensions of video games that were popular in the 1980s and 1990s. But one particular type of game—massively multiplayer online role-playing game (MMORGP)—has a very interesting history of development.

The Rise In Popularity of MMORPGs

We could blame it on the Dungeons & Dragons craze of the 1970s, but D&D is just one development in role-playing games even if that development is critical. When Gary Gygax invented the tabletop game in the early 1970s, computer games were already gaining popularity.

One gaming system in the early 1970s was called MUD, an acronym for multi-user dungeon. Created for computers, several games used the systems. Computer gaming grew in the 1970s but really didn’t take on any meaningful sophistication until CompuServe rolled out Islands of Kesmai in 1984. Many people consider it the first MORPG (because it wasn't massive enough).

Neverwinter Nights is considered the first MMORPG and was a partnership between AOL and TSR, the maker of D&D, in 1991.

Since the early 1990s, online social games have grown even more popular and sophisticated, especially MMORPGs. But those aren’t the only kind of social games available. Facebook has popularized all sorts of games that users play on its platform, from card games to city- and farm-building games. Many of them encourage player interaction.

The Infancy of Blockchain-Based Social Gaming

Blockchain-based gaming is barely off the nipple. We can point to a little craze called CryptoKitties as the chief catalyst.

CryptoKitties were introduced in October 2017 on the Ethereum blockchain. By December, the game was so popular it congested the Ethereum network. That same month, one of the collectible cuties sold for six figures, establishing CryptoKitties as an investment vehicle in its own right. It also gave birth to the concept of non-fungible token (NFT), which is making its mark as a massive change in social gaming assets.

In March 2018, CryptoKitties spun off into its own organization called Dapper Labs and raised $15 million for operations.

All of this so Ethereum enthusiasts can collect digital cats.

Meet Splinterlands

As Dapper Labs was organizing, another blockchain was introducing its own social game called Steem Monsters. A year later, it rebranded as Splinterlands and began offering its collectibles on the TRON network becoming the first cross-chain social game.

The creators of Splinterlands crowdfunded and crowdsourced the creation of the game, which is probably one of the driving factors for its success. I’m proud to say that I was in on the creative development of this phenomenon. When Steem Monsters asked Steemit bloggers to write fictional backstories for the monsters in the game, I jumped in and won several of the contests. This allowed me to acquire a collection of the cards without having to buy them.

In August 2019, Splinterlands registered $1 million in player transactions within the game, an astounding accomplishment. The game has gone on to be the most popular blockchain-based social game and continues to grow.

One final note on Splinterlands: I was instrumental in developing the Splinterlands lore for The Burning Lands, one of the competing splinter lands that make up the game culture. Game creators asked for volunteers to join a team representing one of the seven splinter lands and teams competed to write the best splinter lore for the game.

In 2020, when the Steem blockchain forked, the game migrated to the Hive blockchain.

The Future of Blockchain-Based Social Gaming

I fully expect decentralized social gaming to grow. Currently, there are several popular games on Ethereum, Tron, and EOS blockchains. Enjin is a game-building platform on the Ethereum blockchain that is also host to several popular social games. The Enjin Coin, an ERC-20 token, currently backs more than 1 billion assets.

Blockchain-based social gaming is just getting started. I’m excited to see where game developers of the future take us as NFTs become major in-game assets that players sell and value in the real world.

DISCLAIMER

I am not a financial advisor, nor do I give financial advice. The above information should not be considered financial advice but is for informational purposes only. Neither I nor Cryptowriter are responsible for financial losses incurred as a result of acting on this information. Please consult a financial advisor before making any financial decisions.

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There’s some awesome news and analysis in crypto this week. Let’s see a few stories, shall we?

* Coinbase filed for an IPO. In its filing documents, the company reported a net revenue in 2020 of $1.14 billion and a net revenue of $322 million. In 2019, the company operated at a loss.

* You’ve probably heard the bitcoin fell from $57,000, an all-time high, to around $47,000 this week. Never fear, I see it going up again and going higher. You can melt wings of wax, but they do grow back.

* Older folks are investing in cryptocurrencies, or planning to this year, says the deVere Group.

Treasury Secretary Janet Yellen says she’s open to researching a potential digital dollar.

Cardano’s ADA hit an all-time high of $1.30 and takes third place in market cap.

A dissection of Litecoin’s four year cycle.

Bitcoin ATMs are appearing in some unexpected places.

8 altcoins poised to erupt in March.

Bitfinex and Tether to pay New York state $18.5 million and ordered to stop trading in the state.

Crypto investing firm Anchorage raised $80 million and secures a banking charter.

The Cryptoeconomics of Social Media

Last week, I shared a 3-part series on a fictitious Facebook blockchain called Facechain and showed how one individual could have turned posting on Facebook for 18 years into a creative career. If you missed it, here are the three posts. Check them out now:

1) Facebook’s Fictitious Cryptocurrency: What If It Was Real?

2) Facechain: Facebook’s Fictitious Staking Protocol

3) 7 More Ways a Facebook Blockchain Might Earn You Money

Here are three more incredible posts you might enjoy:

* Masters of Cryptoeconomics: Who Were the Cypherpunks?

* Why Decentralization is Such a Big Deal

* 3 Social Media Scandals That Big for a Blockchain Solution

Check out these and other great posts on cryptocurrencies at Publish0x (if you click this link and join, I’ll earn a small amount of crypto at no cost to you) and Coil.

Friday Fintech Roundup

https://youtu.be/YGy-SAXu4oI

This post was first published at Cryptocracy.

From the early days of usenet groups and internet bulletin boards to modern social media platforms like Facebook and Twitter, there have been controversies that make some people cast a crooked eye at social media, the internet, and human nature. Personally, I think human nature is the biggest culprit. Technology is simply a medium through which we fallible beings express ourselves. Nevertheless, there have been some doozies.

The following controversies are not meant to cast aspersion on anyone in particular or any group of indviduals. Rather, it’s to help us understand the weaknesses to technology and hope that the next generation of the web is an improvement over the last.

The Napster Controversy

Technically, Napster wasn't a social media platform, but as a peer-to-peer file sharing service it can be considered a social application.

The World Wide Web was still in diapers when Napster launched. The year was 1999. While the site offered peer-to-peer file transfers, which was nothing new at the time, what set Napster apart was the fact that it specialized in music files. Anyone could upload a file and share it with their friends, and strangers too. It seems innocuous until you realize that the files people were sharing were copyrighted works of art that professional musicians had recorded and that professional music publishing companies bankrolled.

There’s no doubt Napster changed the music industry. There likely wouldn’t be a Spotify today if Napster didn’t come along to challenge the status quo.

It only took a year for the major music labels and several large musical acts to feel threatened by Napster and take them to court. The whole world debated a music buyer’s right to freely share a product she purchased legally versus the artist’s right to maintain control over and profit from their hard work. In the end, the artists won. But so did consumers.

Napster was forced to change its business model, but what if blockchain technology had existed then? It’s likely that the state of the music industry would look a lot like it does today with musical products sold as MP3s using microtransactions on an immutable and transparent ledger that protects both artist and consumer rights.

The Cambridge Analytica Scandal

All it takes for one company to win some enemies is a taste of success, and a few high-profile scandals. Maybe even some abusive company policies. And a scintilla of blindness to one’s own weaknesses. Facebook has it all.

But the one thing that is certain about Facebook’s mark in the world that can be used to justify the need for blockchain technology is The Cambridge Analytica Scandal.

This one incident involves all the drama and suspense of a political thriller. The bottom line is that Facebook failed to protect user data. More than 87 million people had their personal data harvested from the platform and used for political messaging.

The interesting thing about this is that Mark Zuckerberg said Facebook has implemented plans to prevent such incidents from happening again. He also said some of that had already been implemented years before. The problem is the people who acquired the data from Facebook did so using Facebook’s own tools. They weren’t bugs, but features of the platform.

Data security is a complex topic, and I’m no expert. Nevertheless, it’s easy to see that the way Facebook organizes its data on users is the same way that every other company born last century organizes data on its users—and that method is not secure. It never has been. That’s why, in the first quarter of 2020 alone, there were more than 8 billion data records exposed.

Blockchain technology is far more secure and it puts data ownership squarely where it belongs—in the hands of the individual.

The Twitter and Donald Trump Divorce

On January 8, 2021, days before he left office, Twitter suspended the personal account of President Donald Trump. Justification for this was the belief that the president incited the attack on the U.S. Capitol building two days before. Regardless of whether you think the former president is guilty—the U.S. Senate has proclaimed that he is not—there must be a part of every human being who questions whether any social media website should be in the position to determine an individual’s public and social fate.

Even Jack Dorsey, CEO of Twitter, believes platforms like Twitter should have more transparency on these matters. Of course, he also defends the account ban.

There is a fine line between yelling fire in a crowded movie theater, even when there isn’t one, and yelling at the fire one believes is there despite the evidence to the contrary. But those questions are for courts, not for social media platforms. It’s fine to debate the day’s events, even to take sides, but it’s a different thing altogether to trust the platform in making that decision for the entire world.

The immutability feature of blockchain technology should prevent platforms from overstepping their bounds and banning accounts on political grounds.

Can Blockchain Technology Save Us?

I don’t believe any technology is perfect. Every technology has its pros and cons. Blockchain technology will not prevent copyright theft, data misuses, or political inanities. One thing the advent of blockchain technology has done is give impetus to a discussion on exactly what we expect from people in positions of authority (whether public or private).

If we look to the features embedded in the technology, we may find that blockchains can help us solve problems that were difficult or impossible to solve before. I don’t expect heaven on earth, but I do believe cooler heads can prevail, the right people should own the right data, and personal security should not be compromised.

DISCLAIMER

I am not a financial advisor, nor do I give financial advice. The above information should not be considered financial advice but is for informational purposes only. Neither I nor Cryptowriter are responsible for financial losses incurred as a result of acting on this information. Please consult a financial advisor before making any financial decisions.

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Blockchain and cryptocurrency enthusiasts often point to decentralization as one of the key features and most important benefits to bitcoin and its underlying technology. I won’t argue with the point, but what exactly is so important about decentralization? Why is it a big deal?

Has Centralization Failed Us?

For the better part of history, civilization has been centralized. There has, more often than not, been a centralized authority making rules for everyone else, punishing those who run afoul of those rules, and providing goods and services for a price and a net benefit to the community. Nations have risen to great powers and businesses have grown to great prominence through centralization, often providing an excellent service to others.

Ancient Sumeria, at least six thousand years ago, organized itself into city-states with functioning infrastructure and a code of laws. Ever since, centralized governments have built roads and bridges and facilitated trade and commerce. When a crime is committed, law enforcers respond and bring to justice those responsible. These are good things, right?

Besides being effective, centralized processes are often more efficient than other alternatives. However, what can be used for good can also be abused.

The U.S. Declaration of Independence was written in response to perceived abuses of the King of England upon the colonists in North America. In 1953, the U.S. Army ran biological and chemical weapons tests on personnel who were not informed of the experiment and did not volunteer. In 2004, U.S. military personnel and civilian contractors humiliated prisoners of war at a Guantanamo Bay detection camp in the Abu Ghraib prison abuse scandal. In May 2020, a white police officer killed a black man in Minneapolis, Minnesota by kneeling on his neck for several minutes.

Throughout history, governments have overstepped their authority and become abusive. The 20th century is full of tales of brutal regimes. Virtually every Christian is familiar with the persecution of early church adherents at the hands of several Roman emperors.

Sometimes, it is corporations or private individuals who are aggressive or negligent. In March 1989, oil tanker Exxon Valdez spilled more than 10 million gallons of crude oil into Prince William Sound and killing marine life. Michael Milken sold junk bonds and violated U.S. securities laws during the 1980s.

Libertarians, cypherpunks, political radicals, and blockchain enthusiasts often point to these abuses as evidence that centralization is bad, evil, or untrustworthy. They have a point.

The dark side of human nature is nothing to sneeze at. But is decentralization the answer? Could it be any better?

Decentralization is One Weapon Against the Abuses of Centralization

I do not believe in cure-all panaceas. However, there are clear benefits to decentralization that can offset the abuses of centralization and complement its benefits.

Jack Dorsey, CEO and founder of Twitter, a legacy social media behemoth that suspended the account of President Donald Trump earlier this year, believes his platform shouldn’t have the centralized power that it exercised as Dorsey praised the decentralized foundation of the internet. Unfortunately, the modern internet has become a collage of walled gardens.

The conversation on decentralizing the web has much to do with the difference between protocols and platforms. TCP/IP is a protocol. No one owns it. No one controls it. Facebook and Twitter, on the other hand, are platforms. Like it or not, we all know who owns and controls them.

Blockchains also have protocols. Some of the popular blockchain protocols are:

* Bitcoin

* Ethereum

* Ripple

* EOS

* Litecoin

* Polkadot

A protocol is a set of rules or guidelines that govern how data is communicated. If no one owns it and no one controls it, then no one can stop anyone else from building on top of it. Once an application has been built, no one can take it down. This is the concept behind Unstoppable Domains, a company that sells blockchain domain names that allow people to synchronize all of their crypto wallets into a single address that bears the owner’s name. Each domain name is a private key. As long as that private key is secure, whoever controls it controls the domain name and no one can unpublish it, delete it, remove it, ban it, confiscate it, or hide it. Of course, browsers can always stop people from seeing a website or domain name, but that should not be a problem for anyone who wants a decentralized web.

Under current internet structure, whoever controls the platform controls the content. Facebook controls everything within its domain through algorithms and human editors. Twitter controls all the content within its domain. Google controls which websites rise to the top of its search queries. Amazon has a firm grip on the entire book publishing industry. Blockchain technology threatens to turn these centralized systems on their heads by reverting the internet back to its decentralized nature through the implementation of competing and cooperating protocols.

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First published at *Voice*.