Is Web3 Social Media Getting Used by Lots of People?

A Look Back at the Past

In the 1990s, there was no one in charge of the Internet. It was like the wild west in the digital world, without the control or influence of multi-billion dollar corporations. Anyone anywhere could post almost anything without worrying about being kicked off the platform or losing the ability to make money.

This time period, called Web1, was a decentralized, permissionless, free-flowing ecosystem. It was a time of a decentralized utopia that was hard to get around and was mostly made up of tech-savvy people.

How Web2 Platforms Work

In the early 2000s, when the internet became more commercial and centralized, a new generation of users came online. With the rise of AOL and other big websites, people started to use the web more and more.

This increase in use is mostly due to better user experiences, easier access, and the “network effect.” People joined AIM because it was fun to talk to all their friends at once, not because it promised free information and truth.

During this new time, called Web2, the internet went from being a digital highway for information to being a commercialized town square. By market capitalization, Google and Meta are now two of the ten biggest companies in the world.

In 2020, when a global pandemic was happening, big tech companies like Facebook and Google made $1 Trillion in profits. Meta was selling data and letting fake news get more attention than real news the whole time.

Since then, Meta has been one of the worst S&P 500 companies, with falling profits and more people leaving the site. This slump isn’t because “collective consciousness is fighting against the tyranny of centralization.”

Most of Meta’s lost revenue is due to Apple’s IOS update, which lets users choose not to have their data tracked. This is the main reason why Meta’s sales are going down.

Closed Source vs. Open Source

On top of these mistakes, none of the major web3 social media website development platforms is open source. The public can’t see the code or algorithms that are used to make our feeds, recommendations, or notifications.

On the other hand, Bitcoin and many other cryptocurrencies run on a platform that is open source. Anyone can look at its code and get a full picture of how it works. Bitcoin and other networks are not owned by a single company like Google or Meta.

Our financial systems are starting to become less centralized because of blockchain and cryptocurrencies. Today, anyone can go to AAVE and use their Ethereum to buy one of the thousands of ERC-20 tokens that are not regulated. All of this is done on a platform that is decentralized and open source. Since the code is public, you don’t have to trust the people who made it with your assets.

Will people who already use Web2 rush to Web3 social media?

Web2 users don’t seem to be rushing to Web3 versions of social media, which is a shame… At least, not right now. The most popular web browser wallet, Metamask, just went over 30 million monthly users. On the other hand, Sina Wibo, a social media site owned by the Chinese government, has about 573 million users every month. Participating in Web3 is not as easy as it was in the early days of the internet.

For example, in order to use MetaMask, a user must get a “seed phrase.” A seed phrase is a 12 or 24-word phrase that is chosen at random and gives you access to your decentralized wallet. If you lose the seed phrase, you’ll never be able to get back into your wallet. It takes work to use the decentralized web, and it’s clear that most users would rather have convenience and easy access than decentralization.

About 2.9 billion people use Facebook every month, making it the most popular social media site in the world. Hive, DeSo, Diaspora, Mastodon, Aether, and Karma are not scared by this difference in adoption. All of these networks have the same goal: to make an open-source, decentralized platform on which anyone can build their own channels.

Things That Aren’t in One Place

Platforms like Hive and DeSo try to be decentralized, but they all have different rules about how content is moderated. Aether lets its community vote on who will be in charge of moderating content. Mastodon, on the other hand, has each server take care of its own moderation.

Layer 1 blockchain company DeSo, which is backed by big names like Coinbase and Andreessen Horowitz, is building a blockchain that is optimized for social media. On Cardano, it costs about $0.14 to store a text file with 200 characters. On DeSo, the same thing costs $0.000016.

Imagine having to pay 14 cents for gas every time you sent a direct message (DM) or posted a tweet, even though you could use Instagram or Twitter for free. DeSo fights this by using a blockchain that isn’t used for everything. Instead, it lets social features run on bare metal instead of a virtual machine, which reduces congestion and makes it easier to scale.

Costs of the DeSo transaction

At the moment, DeSo can handle about 10 posts per second. Twitter, on the other hand, can handle about 6000 posts per second. DeSo is based on a system called Proof of Stake, which lets users run their own nodes. By running a node on the DeSo blockchain, you become the admin of your own feed.

Along with having your own node, you also control the content and moderation of your own feed. All of this information is stored on a decentralized blockchain and is available to everyone. Running a Node gives you access to all of DeSo’s content. This lets node operators create their own niche page within the ecosystem and possibly make money by promoting content, charging trading fees, and charging fees for other transactions.

High innovation, low demand

DeSo is just one of many amazing projects that are building an open-source social media platform. Each project fills its own niche and does something similar to what Web 2 social media sites do (Ex. Mastodon aims to be a decentralized Twitter). Even though there is a need for decentralized social media, there isn’t much of a market for it.

One of the main reasons for the growth of social media is the network effect, and people still like to use centralized platforms. NFT communities and DAOs won’t use apps like Signal to coordinate their communities. Instead, they will use Discord.

In the end, the growth of decentralized social media will be slowed down until there are major changes to the user experience and network migration.