Cryptosocial: How Cryptocurrencies Are Changing Social Media

By Allen Taylor

Cryptocurrency & Social Media Have Married and This is What It Looks Like

Social media is a multi-billion-dollar industry where the platforms profit from user-generated content. Cryptocurrencies have arrived to end the exploitation.

Cryptosocial: How Cryptocurrencies Are Changing Social Media surveys the history of social media and cryptocurrencies to show how these two unrelated technologies had a chance meeting that is changing the world. If you’re one of the millions of people growing tired of legacy social media and how they take advantage of their own users, this book will open your eyes to the alternatives offering greater happiness, more freedom, and better personal and financial security. Read this book and you’ll learn:

• What cryptosocial is all about.
• Which platforms and protocols you should pay attention to.
• Why cryptosocial media is the best alternative for Facebook, Twitter, and Snapchat.
• How to start using cryptosocial media.
• What you need to participate in decentralized social media platforms.
• And how you can profit from your own content, gain more control over your identity, and maintain security over your online data and personal assets.

• Language: English
• Publisher: Business Expert Press
• Release date: Mar 10, 2022
• ISBN: 9781637421840

Allen Taylor

Allen Taylor is a published poet and fiction writer, former newspaper editor and award-winning journalist, and a professional content writer for businesses. He is a small group leader at his church, has lead worship, and has, on a few occasions, delivered a sermon. He’s also smoked a few cigars. A late bloomer, he is beyond the age of fifty, married to a beautiful woman with three adult children (two of whom call him “Dad”), and is a proud Poppy to four incredible grandchildren with whom he loves to play. He is also the founder at Crux Publications, as cliché as it is (it’s also true), the chief bottle washer.

Book preview

Introduction

The year 2020 rode in on a dark horse.

From a lab in Wuhan, China, a virus spread out across the globe like an imperial sword. Social and political tensions were such a force not experienced in recent memory. But this book is not about politics or pandemics. It’s about social media.

Unfortunately, even our social media has us polarized. We can’t agree on a definition of fake news and Facebook news feeds serve as personal diaries for proud and doting mothers, wall-to-wall cat memes, and soap boxes for millions of amateur political analysts who make no attempt to hide their biases. The previous year’s brouhaha spilled over into 2021 and led to several legacy social media platforms banishing a sitting president and locking him out of his own accounts¹. Twitter and Facebook had already been fact-checking his posts and flagging them as potential misinformation.

Is this the power we want our social media platforms to possess? If they de-platform a member of one political party, might they also target members of another? If they silence the most powerful man in the world, who else might they silence?

The World Wide Web has come a long way since the first website was built in 1991. Where will it be in five years? Or fifty? If blockchain developers have their way, it will return to its decentralized roots. But what will be the price, and how will we get there?

Given the pace at which technology is changing our livelihood and our deeply held cultural values, perhaps we should ask what we really want from social media. How will it affect our beliefs and behaviors, our liberties and our laws?

And, just as importantly, how should revenues generated from the content on social media platforms be split between the platforms, the creators, and the curators?

These are the problems cryptosocial media entrepreneurs are trying to solve. Advocates point to blockchain technology and note that it provides benefits for everyone—if only everyone would get on board.

Throughout this book I will refer to blockchains and protocols like Bitcoin and Ethereum by capitalizing the first letter of each word. When the lowercase is used, I’ll be referencing the cryptocurrency. For example, ether and bitcoin are cryptocurrencies while Bitcoin and Ethereum are the blockchains. I will note one exception: When mentioned in a series with other cryptocurrencies, all those mentioned in the series will be capitalized. This should facilitate a more enjoyable reading experience.

My hope is that this book will interest and intrigue readers to ask the right questions about the purpose of social media, how its content should be distributed and rewarded, and whether blockchain technology will solve the problems of the current social media landscape or simply be another layer of paint on chipping walls.

¹ L. Cohen. January 07, 2021. Twitter and Facebook Lock Trump’s Accounts, Take Down Video of his Message to Supporters, CBS News, www.cbsnews.com/news/trump-twitter-facebook-accounts-locked/ (accessed March 30, 2021).

CHAPTER 1

Practical Applications of Blockchain Technology

When primitive man wanted to travel from Argos to the banks of the Yellow River, he invented a circular object and called it a wheel. In those days, traveling farther and faster meant more cash in the war treasure and greater leverage for trade. The invention proved to be a huge advancement for civilization.

Throughout history, enterprising individuals have identified problems and addressed them with creative solutions. This has often led to future innovations and improvements.

In the 1440s, an enterprising German named Johann Gutenberg ushered in the age of mass communications with advancements in printing.¹ That led to the publication of daily newspapers, monthly magazines, and countless books. Many of the font types that have been developed since then are now used in Web publishing.

New technologies often do more than solve old problems. Sometimes they address challenges people weren’t aware they had. That might be the case with decentralized social media.

Blockchain developers make bold promises. One of those is that blockchains and distributed ledgers can and will return the Internet to its decentralized roots. Another is that the technology will provide a greater sense of security for anyone sharing personal data on the Web. Just as important, the persons to whom that data belongs can have more control over how it is shared and profit from it, as opposed to third parties selling it for a profit and not sharing that profit with anyone else. These benefits are wrapped up in the nature of the technology itself, but are they what Web citizens want? If so, does the average Internet user know they want these benefits?

Crypto enthusiasts don’t need to be sold. The rest of the world might. If you’ve wondered what the fuss over bitcoin and cryptocurrencies is all about, or you’re at least a little bit concerned about the power that rests in the hands of a few at the top of the social media pyramid, then keep reading to learn how a new emerging technology could solve some of the biggest problems facing the planet at the beginning of the third millennium.

Twenty-First Century Problems and Their Solutions

Technology is a double-edged sword, often solving one problem while creating another. When that happens, someone comes along later 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 promises to solve are related to its features. In that light then, let’s dive into the river of problems and solutions concerning blockchains.

The Problem of Centralization

Today’s young people are put off by the centralized institutions of the past. That’s why many of them find decentralization attractive. When you examine the modern world, it’s not hard to see why there is a strong distrust of authority.

The first Millennials were born in 1981.² In their lifetimes, they’ve witnessed an S&L crisis, the Y2K scare, the World Trade Center attacks, the 2008–2009 financial crisis, and more than one global pandemic. 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.

From financial corruption to police brutality, centralized authority has run amok. Centralized social media platforms, which were supposed to democratize media, have proven to be another organizational nightmare where power rests in the hands of a few. With decentralization, there is no platform to control.

An article in Inc. magazine lists three clear benefits of decentralization:³

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. There is no Twitter-like authority to banish or censor someone.

Humans are fallible. There is no class of individual immune from the misuse or abuse of authority. To quote Lord Acton, Power corrupts. Absolute power corrupts absolutely. Decentralization de-powers the powerful by empowering everyone else.

The Problem of Data Ownership

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

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

For instance, any platform that collects personal information can sell it. 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.

E-mail is like last century’s postal mailbox. Full of junk. One day, you land on a website, fill out a form providing your e-mail address, and receive a download. Before dinner, you’ve received a confirmation e-mail, an introduction e-mail, and a follow-up promising untold benefits delivered conveniently to your digital mailbox. You now have a lifelong relationship you have to actively request to be removed from—if you have the energy to pursue it. We’ve been trained to join lists.

Think about the websites you visit. Do you conduct business with your doctor, your dentist, your state government, the federal government, your bank, your credit card company, your church, and charitable nonprofits through the Web? All of that data you share about yourself is sitting on somebody’s server. Actually, multiple servers all around the world.

Blockchain technology makes it possible to wrap all of your important data into a single file or data source that only you control, keep it secure with end-to-end encryption, and prevent it from being shared with anyone you do not explicitly assign consent to. It’s possible you can make money from that data instead of Facebook and Google cashing in on it.

The Problem of Data Security

There is no platform anywhere in the world that cannot be hacked. Some servers may be more secure than others, but passwords can be guessed, two-factor authentication (2FA) can be hijacked, and virtually every form of data security currently in use has weaknesses. Blockchain technology takes a different approach to data security by using public and private keys, which must be matched, to keep data secure.

Data security experts suggest passwords should be long (at least eight characters) and contain at least one lower case letter, at least one upper case letter, and at least one special character. The reason for these stipulations is because such passwords are harder to guess or hack, which makes your data more secure. Cryptographic security is even better.

Cryptographic security, the security protocol for blockchain technology, takes sage advice and puts it on steroids. Bitcoin public and private keys contain a string of 30 to 65 characters using 256-bit encryption.⁴ (Figure 1.1) On top of that, decentralized blockchain solutions often use a base-16 numbering system as opposed to a base-10 numbering system. These complexities, usually randomized, increase the level of security for stored data. The more complicated a password or key is, the more difficult it is to hack or guess.

Figure 1.1 Two hundred fifty-six-bit encryption is very difficult to crack. To succeed, even the strongest and fastest computing system would need to test a massive number of possible numerical combinations. In fact, the number of combinations are equal to 10 multiplied by itself 77 times and the result multiplied by 1.1

Credit: Taylored Content. Based on data from xmapsystems.com.

Blockchain technology increases complexity to ensure security.

The Problem of Transparency

Centralization allows those in control to put up shields. Secret board meetings hide facts that others might use to make critical decisions. While this provides some benefits, there is also the side effect of centralized authority tilting the scales in favor of a few—and many times the few have self-serving interests.

Google has long kept its search engine algorithms secret. They tell the world 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 and most successful search engine. While this opaqueness is effective in combating spam and discouraging people from gaming the search results, there is a hard truth that must be explored: If search algorithms are so great, then why do they need to be tweaked 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?

Most of us can appreciate that it would be against Facebook’s interests to publicly declare how their algorithms work. Nevertheless, centralization has a built-in opaqueness that often leads to abuse or unfair advantage for a few. Virtually every country in the world has a central authority that manages the economy. This is often defended by arguing that it keeps economies stable and benefits everyone, but the economy still moves in waves, with recessions and depressions, with unemployment and instability, and there is still inflation and deflation despite all the tinkering. Who do central banks really protect?

Blockchain technology is capable of delivering greater transparency. Each transaction is recorded on a public ledger that anyone can audit at any time.

The Problem of Accessibility

Block explorers record every transaction on a blockchain. Bitcoin has operated seamlessly since 2009 and every single transaction since the genesis block has been recorded for everyone to see. Because the information is transparent and secure, every transaction can be viewed and analyzed by everyone, even people who don’t use the blockchain, without damaging reputations or violating privacy.

The Problem of Ownership

In 2016, 26 million people age 16 and over experienced identity theft.⁵ From bank accounts to education reports, identity theft is higher than it’s ever been. Bad actors can purchase personal information on thousands of people at a time on the dark Web for pennies on the dollar.⁶

Blockchain technology can be used to secure identities, prove identities, and give identity owners more control over their personal information. More importantly, if you wish to remain anonymous or disassociate your real name from your online interactions, you can more easily do so.

Provenance is the art and science of tracking ownership and possession. Typically used in relation to art, jewelry, and items of high value, it can be used to track everything from vehicles to real estate. Imagine how useful it would be to search a public record before making a purchase to determine whether the seller has the legal right to receive compensation. What if you could loan out your vehicle, record that transfer of possession on an immutable public record, and the new driver automatically enrolled in a short-term insurance policy they paid for prior to the transfer? Blockchain technology makes these types of transactions possible.

The Problem of Faster Payments and Money Transfers

It takes three to five days to transfer money from PayPal to your bank account. International money transfers can take a week or longer. By contrast, bitcoin transactions take ten minutes. Other blockchain transactions are even faster. Some of them can move money in seconds.

If you run a business in Nebraska and have a customer in Spain, instead of sending U.S. dollars (USD) or euro through the painfully slow process of the 20th century, you can invoice your client and receive payment in bitcoin or one of the thousands of other cryptocurrencies in a few minutes.

With regard to social media, if you and your client use the same platform, you could request payment through the cryptosocial platform and receive it within seconds. I’ve done it.

The Problem of Mediation

If you shop at a retail store and want to pay by credit card, you have a variety of options: Visa, Mastercard, or Discover, to name a few. The payment does not go directly from your bank to the retail merchant. Instead, it goes through the credit card company, who extracts a fee for mediating that transaction.

Suppose that you wanted to pay the retail merchant with cryptocurrency. Bitcoin was designed as a peer-to-peer cashless payment system. In other words, the merchant can simply share her public wallet key with you and you can send bitcoin directly to that merchant from your smartphone while standing at the cash register. If the merchant accepts other cryptocurrencies, you can do the same with those—wallet to wallet, yours to the merchant’s.

This type of scenario could take place in banking, insurance, real estate, or any industry where money exchanges hands. Not only that, but if you had a medical card secured by blockchain technology, when you visit your doctor, you could transfer only the relevant records to your doctor in a few seconds.

Blockchain technology is peer-to-peer by nature, cutting out unnecessary intermediaries.

Other Problems That Need a Solution

Every industry has problems to solve.

Real estate, banking, entertainment, travel, logistics, retail, you name it. There are thousands of blockchain developers working to solve the problems in every industry.

Social media is one more business sector where blockchain developers are working on solutions to systemic problems that affect all users. These include centralization, privacy, data security, identity ownership, transparency, accessibility, and more. It’s just a matter of time before any of these problems are solved well enough that the technology is ready for prime time. And we’re almost there now.

The Features and Benefits of Blockchain Technology

It’s impossible to understand how blockchain technology is being employed or what its potential real-world applications are if we don’t understand what its underlying features and benefits are. I’d like to lay that groundwork before we get to the central issue.

What Is a Blockchain?

Simply put, a blockchain is a new way of ordering data.

Most people today are familiar with databases, the current way data is structured and organized for computing systems. The problem is, they’re easy to hack. In the first quarter of 2020, more than 8 billion data records were exposed, a 15-year record.⁷

Records in a database are organized in tables. By their nature, tables contain information that can be changed or edited. By contrast, information on a blockchain is organized into blocks protected by a security measure called cryptography. Therefore, a blockchain is a chain of blocks tied together by hashes, a cryptographic function that converts information into something else.⁸ (Figure 1.2) It’s a secret code. In order to understand the information stored in the block, a person must have the key to the code and be able to convert the hash back into its original data. By design, information contained in each block is unalterable. The technical term is immutability.

Figure 1.2 A blockchain is a chain of blocks. Each block contains data secured by a hash. To unlock the data, a user must pair up a private key with a public key

Credit: Taylored Content.

What Are the Many Uses of a Blockchain?

While cryptocurrencies are the most widely known use of blockchain technology, they’re not the only way the technology is used. Of course, there are different types of blockchains and each type has advantages and disadvantages.

A public blockchain can be accessed by anyone from anywhere in the world. A private blockchain can be accessed only by invitation. A sidechain extends from a primary blockchain and operates independently of the primary blockchain with the ability to link to and from the primary blockchain. A hybrid blockchain contains features of both public and private blockchains and may be centralized, decentralized, or a combination of the two.

Bitcoin is an application of the first blockchain. While it started as a decentralized ledger, it has become increasingly more centralized. In fact, in January 2020, 49.9 percent of the network’s computer power was centered on five entities within China.⁹ As bitcoin mining becomes more expensive, it is likely that the Bitcoin blockchain will become more centralized.

Smart contracts are computer programs with defined parameters that execute when a trigger event has occurred. They are popular among blockchain developers, especially within the financial industry where a lot of blockchain development is taking place to deliver financial services in new ways.

Some blockchain users play video games and collect digital assets. For instance, in 2017, a game called CryptoKitties rose to popularity. In December that year, one sold for $100,000.¹⁰

Blockchains are also used for energy trading, supply chain management, diamond mining, antibody test tracking, provenance, insurance product delivery, and counterfeit detection.

Governments have used blockchains for voting, records keeping, and services distribution.

Since 2016, there have been more than 100 social media projects built on blockchains. Many of them have been failures, but some are popular among a niche audience.

The use cases for blockchain technology are growing all the time. The global investment in blockchain technology in 2020 was $3 billion. It’s expected to grow to $39.7 billion by 2025.¹¹ As more people, businesses, and corporations learn about the technology and how to implement it, more uses are tried and experimented with. Some catch on and some don’t. It is not likely the technology will go away any time soon.

The Internet has turned the world into a global marketplace. Blockchain technology promises to transform the planet into a global village with a spherical connection like never before. The following features and benefits may prove to be useful in more ways than we can imagine.

Blockchain Technology Features

Blockchain professionals narrow blockchain technology down to six primary features. Experts discuss three other features to varying degrees. Below are short summaries of these nine features to help you better understand how cryptosocial media entrepreneurs approach blockchain development.

Immutability

Immutability means transactions recorded on a blockchain cannot be changed or altered.¹² Once recorded, transactions are irreversible. For instance, if Tom sends Rebekah 5 bitcoin and Rebekah receives that money in her digital wallet, a record of that transaction is made and there is no way to cancel it once completed. If Tom meant to send the bitcoin to Sally, that is his error. He cannot retract the payment, in full or in part. He is out of luck.

Immutability ensures that no third party can intervene and cancel a transaction, retract it, or redirect money to another wallet. It also means that mistakes cannot be undone.

Decentralization

Decentralization means no individual or entity controls the technology.¹³

The U.S. Postal Service is centralized. It has a postmaster who is responsible for the overall operations of the service. If you have a problem with mail delivery, you contact your local post office, which answers to the authority of the national office. Likewise, Facebook is centralized. It has one individual at the head who is responsible for how the platform is managed. Your local boy scout troop is centralized. Your church? Centralized.

To be centralized means that one individual or a group of individuals manages the affairs of the entire organization or network. Blockchain technology has no such structure.

As envisioned by its inventor, the technology is designed to operate on the basis of multiple computer nodes that follow a programmed consensus process in order to approve transactions on the network. There is no one individual or entity controlling the process.

We’ll discuss consensus mechanisms later, but for the purpose of understanding decentralization it’s important to know that multiple computers—often thousands—make up the network on a blockchain.

An important distinction must be made between the computers on a network and an organization that owns or controls the blockchain. In some instances, an organization may be behind the blockchain. That organization may own the blockchain or define certain processes that make it operational. Theoretically, the organization does not influence the blockchain at the transactional level. However, in practice, that can create network management challenges. Unresolved, those can lead to splits, called forks, and two blockchains diverge from one.

While blockchains are essentially decentralized, organizations that own or manage them may not be.

Enhanced Security

When blockchain developers talk about enhanced security, what they mean is that blockchain technology is inherently more secure than ordinary digital assets and require more computing power to break the security protocols in place.¹⁴

Most Internet users understand password-level security. When you log into your Facebook account, you enter your password and are admitted based on a record of that password on a server. The longer and more complex the password, the more secure it is from hackers. However, because Facebook is centralized, there is only one attack point for bad actors to use to break the security. No matter how strong your password is, that central attack point makes it easier for hackers to break in.

Even 2FA is relatively unsecure compared to blockchain technology. With 2FA, users can authorize a centralized platform to send a text of a 5-or 6-digit code to their mobile phone when they try to log into the platform. Anyone who does not have access to your mobile phone is shut out.

While 2FA is more secure than a single password, it is still fairly easy to break for smart hackers.

Think about your home. You have a front