Redefining Social Media With Web3

How Web3 Technology is Revolutionizing Data Ownership and Collaboration

Web3 Socials

Social media has become a vital part of our lives, but with centralized control, lack of privacy, and data ownership concerns; users are increasingly seeking out alternatives. This is where Web3 and decentralized social media come in. In this article, we will explore the transition from Web1 to Web2 to Web3, the pain points of Web2 social media, and the advantages of Web3 social media, including ownership of data and the ability to collaborate freely and fairly. We will also examine some real-world use cases of decentralized social media dApps.

From Web1 to Web 3 and where we are now

The first generation of the web, Web1, was a read-only web where users could only consume information. The advent of Web2 brought about interactive, user-generated content, social networking, and e-commerce. However, these platforms were centralized and lacked privacy and control for users. Web3, the current and future state of the web, is based on decentralized networks and blockchain technology, offering trustless systems, data ownership, and privacy.

To provide context on the current landscape of social media, understanding the current landscape of social media usage is crucial for grasping the issues that come along with it. With the world becoming more digitally connected every day, social media platforms have become the go-to place for people to share and consume content. However, as the number of users on these platforms grows, so do the issues that arise with them. In this context, it is important to look at the top 5 social media platforms in terms of monthly active users (MAU) and understand how they are contributing to the attention economy. By doing so, we can better understand the impact that these platforms have on society and how web3 technology can provide solutions to their existing problems.

Source: (1) Semrush

Web2 is Painfully Addictive

Web2 social media platforms have long been plagued with issues surrounding data ownership, security, censorship & transparency, and lack of an equitable treatment in the creator economy. Let us now explore in detail the challenges of Web2 social media platforms and how Web3 can address these issues.

Data ownership and privacy

Web2 social media platforms have been criticized for their lack of respect for user data ownership - or as some might call it, monopolies with a voracious capitalistic appetite for all things data-related. Users have little control over what happens to their information, and centralized systems have been criticized for their monopolistic practices. In contrast, Web3 offers complete user control over data ownership, enabling users to choose whether to share their data or keep it private – with embedded decentralisation and voting process further democratizing the user experience. With the assurance that their data would not be exploited for financial gain without their consent, users can enjoy a more secure and transparent experience.

In recent years, governments have shown growing concerns for large social media companies that possess vast amounts of user data. This was evident in the case of TikTok, which was recently under fire for spying on American citizens on behalf of the Chinese Community party (CCP). The US Congress accused TikTok's parent company, Bytedance, and its executives of such actions. As a result, the Biden administration demanded that its Chinese owners divest their stakes or face a potential ban, highlighting the need for social media platforms to prioritize data ownership and privacy.

In contrast to Web2, Web3 offers complete user control over data ownership and presents a more secure and transparent experience. The use of decentralized identity systems like DIDs, Web3 platforms can provide reliable and trustworthy methods moving forward for users to manage their professional credentials. By leveraging the Web3 stack, credentialing platforms provide a solution for verifying the skills and experience of job candidates that doesn't rely on the data ownership practices of Web2 social media platforms., these platforms offer a more reliable and trustworthy way for employers to evaluate candidates, leading to a more transparent and merit-based job market.

Security

Web2 social media platforms have long been plagued by issues related to security. Storing user data in a centralized database makes it vulnerable to attacks from hackers, who only need to compromise a single system to gain access to sensitive information. In many cases, insiders can play a role in leaking critical information to external malicious actors, exacerbating the security risks associated with centralized systems. According to the ForgeRock Consumer Identity Breach Report 2022, social media was responsible for 41% of all compromised records in 2021, a significant increase from 25% in 2020. Social media presents a weak point in the current online landscape due to various factors, including the ease with which criminals can obtain credentials by posing as a business client. Additionally, fraudsters can exploit mutual connections to gain unauthorized access to businesses, and oversharing on social media provides thieves with personal information that can be used to facilitate data breaches. 

Recent news revealed that Samsung Electronics suffered a data leak when an employee accidentally entered trade secrets into ChatGPT while attempting to confirm an error in the source code of the semiconductor facility management database program. This incident resulted in three instances of information leakage, including two cases of equipment information and one case of leaked meeting contents. In response, Samsung Electronics has taken swift action by blocking the use of ChatGPT in its workplaces due to concerns about confidential information leaks. The company is also considering creating its own AI service exclusively for internal use. This incident highlights the potential dangers of centralised data storage systems, as confidential information transmitted and stored in external servers may be at risk of being exposed to the public, even with safeguards in place

That said, Web3 systems are designed to be resistant to such behavior by individual participants, making security in Web3 more effective than in Web2. As more and more companies move towards digitalization and data-driven operations, the risk of malicious attacks has grown exponentially. Cyber attacks can result in significant monetary and reputation losses, making cybersecurity a major concern for businesses operating in the digital landscape. Decentralization can enhance the security of Web3 systems, making them more resilient to potential attacks and minimizing the risk of data breaches and other forms of cybercrime – benefitting both businesses and end users..

Unfair bias and censorship

The problem of unfair and biased censorship is prevalent in centralized systems, where a single entity can control the narrative and suppress dissenting voices. For instance,
the release of the Twitter Files revealed the company's decision-making process around some high-profile actions, such as the banning of former President Donald Trump in January 2020. Musk has been critical of the prior management's content moderation decisions, arguing that they engaged in censorship. The files also show that Twitter had biases in its algorithm before Musk took over, which could have led to unjust censorship of accounts. This highlights the potential for political bias to affect centralized platforms and limit the spread of certain viewpoints and ideas.

Conversely, decentralization brings democracy to social media, giving users control over their content and making it difficult for any single entity to censor content that doesn't align with their interests. Web3 would have the ability to conjure up products akin to “uncensorable tweets”.  These systems would provide participants with control and privacy, allowing them to take an active part in the governance of the project through voting mechanisms. By transferring authority to the participants, decentralized systems aim to create a more equitable and just digital world.

Lack of equitable treatment in the creator economy

Platforms such as Facebook, Instagram and YouTube rely heavily on ad revenue to continue operating. However, these platforms are increasingly seen as unfairly compensating its content creators and in the treatment of its end-users. In the case of end-users for example, if users do not subscribe to “paid offerings”, they are more likely to be bombarded with “mind-numbing” amounts of ads. Over reliance on ad revenue creates a misaligned incentive structure where user engagement is prioritized over user well-being, resulting in an algorithm that promotes addictive content and clickbait to maximize user attention for maximum revenue. Additionally, the ad-based business model can incentivize the platform to prioritize content that is advertiser-friendly, leading to the censorship of certain types of content.

Decentralized social media platforms offer a potential solution to this problem by enabling financial backend integrations. By integrating a permissionless and trust-minimized financial backend, these platforms can provide opportunities for frontends to monetize their content by unbundling the business model process. Social media platforms can integrate call-to-action interfaces into the existing frontends to execute web3 native actions such as minting NFTs (that would correspond to the intended narrative of the content) such as participating in community events, buying tickets to a concert, music album drops, buy/sell digital assets, etc – the sky is the limit on potential use cases. Examples of protocols working on this future is Lens protocol and Farcaster – enabling users to have a direct relationship with their audience. The decentralized nature of these platforms allows for a fairer distribution of revenue among content creators and removes the need for a centralized intermediary to facilitate transactions. Additionally, the lack of embedded finance infrastructure on these platforms hinders users' financial freedom and potential for economic growth. These issues highlight the need for a more decentralized and equitable social media platform, which Web3 promises to deliver. 

Thesis & Final Thoughts

It is true that some users may not be motivated solely by ideology or principles when choosing to use Web3 social media platforms. However, the issues presented by the existing web2 social media ecosystem, which includes data ownership and privacy, is not just an ideological concern, but a real-world one that has tangible implications for users' personal information and security. Our belief is that the Web3 stack would offer not only better data ownership and privacy protections, but also a host of other benefits that can improve the overall user experience for both content creators and end-users/audience/community. 

Web3 social would allow for seamless integration of intellectual property ownership into social media platforms and is set to revolutionize the way users interact with these platforms. With this integration, users will own their creations and be fairly compensated for their work. In today's rapidly evolving digital landscape, the content creator economy has become an increasingly important part of the online ecosystem. As more and more individuals seek to monetize their content and turn their passions into profitable ventures, the need for innovative solutions to protect their intellectual property has become paramount. This is where the integration of ownership of IP into social media platforms can provide immense value to content creators, enabling them to freely and fairly collaborate and share their creations while receiving just compensation for their work. This will foster an environment of collaboration and sharing, as creators will be more willing to share their work with others knowing that they will be properly credited and compensated. With royalties flowing in a just way, creators will be able to sustain themselves and continue to consistently produce top-tier content that ultimately generates value for the target audience.

We believe that all of these advancements will only be possible with the appropriate infrastructure in place, which we call the Web3 stack. Blockchains such as L1s (Ethereum, Avalanche, Solana, etc), L2 networks and off-chain solutions (Polygon, Farcaster Hubs), Decentralized identity systems like DIDs (ENS, Unstoppable Domains, Space ID), reputational and credential infrastructure (Otterspace, Fractal, Gateway, rep3) and decentralised composable social graphs (Lens protocol and Farcaster) are all necessary components of this infrastructure. These are essential building blocks for developers and stakeholders in the Web3 ecosystem to focus on building and refining these technologies to ensure that they are user-friendly, secure, and scalable.

This will lead to a more vibrant and engaging social media ecosystem, as users will have access to a wealth of diverse and creative content. Ultimately, the integration of ownership of intellectual property into social media platforms will provide a win-win situation for both creators and users, promoting a fair and just compensation system and driving innovation and creativity in the digital world.

Web3 social media platforms are the future, with ownership and collaboration at the core. Web3 technology enables users to take control of their data, enabling them to collaborate and share their creations freely and fairly. The transition from Web2 is inevitable. Web3 social media platforms will be more than just an alternative; they will be the new wave and we are excited to see the space propel to new heights.

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