By now, you’ve probably heard that the panacea known as the blockchain will change everything from finance to logistics to supply chain to commerce to … just about anything. And now, it seems, the distributed ledger technology that’s all the rage could also affect social media—for the good of content creators and consumers alike.
Triangle Capital LLC partner Richard Kestenbaum wrote in a Forbes article that for now, social media makes essentially all of the money off the work of content creators—anyone who posts photos, videos and more on social sites, including influencers—through lucrative advertising. Your candid photo of your toddler and Dalmatian romping in the backyard might just be a cute snap to share with friends and family—but marketers can make good money by positioning their ad right alongside that wholesome photo.
And that’s what Kestenbaum sees as the problem. Why aren’t people making money off of their work and their content?
Coupled with that is the Millennial generation and a coming wave of Gen Z consumers, two cohorts that have new demands and expectations of brand values: transparency, authenticity, ethical and eco-friendly operations, fair-wage compensation and local production and sourcing, to name a few. But how, exactly, do brands communicate all of that?
That’s where blockchain comes in, according to Kestenbaum. Brand content uploaded to the blockchain “eliminates the need for intermediaries,” making the ledger tech a “threat” to the established social media players like Facebook, Twitter and Instagram, he wrote.
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“Most of the $40 billion that Facebook collects annually will wind up going to the creators of the content,” Kestenbaum wrote. “That will wipe out the value of the company to its shareholders. In fact, it could just wipe out the company.”
Kestenbaum foresees a new model in which consumers interact with social platforms much the same way they do now—except their web browsers would include a browser extension for each social site. “It would be as if Facebook, Instagram and others were buttons on your browser that open up the software you use to engage on social media,” he wrote.
Content uploaded onto the blockchain would remain on the user’s computer instead of being “handed over” to the social platform. In the wake of Facebook’s Cambridge Analytica scandal, consumers interested in greater control over their data and content just might find this proposition very attractive. Kestenbaum envisions users receiving cryptocurrency—convertible into traditional currency—in proportion to the volume of people who view their permissioned content, enabling everyday individuals, instead of the big social firms, to profit from their photos, videos and more. The change would also compel brands to invest more in creating high-value, engaging content that would naturally attract consumers instead of forcing itself on them
Existing blockchain technologies including Steemit (similar to Reddit), DataWallet and Blockstack could make this new vision for social media content sharing a reality.
Global spending on blockchain solutions in 2017 was valued at $945 million and is expected to reach $9.7 billion in 2021, while increasing at a compound annual growth rate of 81.2 percent, according to an International Data Corporation report.