The Twitter Dilemma And Why It Cannot Compete With Web 3.0
This will be called the "Twitter Dilemma" but they are not the only ones facing it. In fact, it is consistent throughout the social media realm. We also see in with the projects that people like Jack Dorsey are creating.
Web 3.0 is changing the nature of the Internet. At the core is the idea of ownership. We phrase this many different ways yet it all leads to the same conclusion. There is no sovereignty with the likes of Twitter, Facebook, or Google. We are at their mercy.
To make matter worse, we also are a "product of the product". Our actions is what makes them money. In return, we get the user experience and that is all. Sure, Elon Musk is looking to reward content creators, an idea that he has no idea how to implement. Of course, on Hive, we are approaching 7 years of rewarding people for their contributions.
So what is the problem? What is at the core of the "Twitter Dilemma"?
That is what this article will investigate.
Business Model
There is no sense beating around the bush.
When we look at the world of social media, we see the business model that is going to make it impossible to adapt. Basically, it is a broke model that is being usurped.
We are entering a new era. The present social media companies are akin to Blockbuster operating in an age of streaming. It simply does not work.
Social media corporations depend upon advertising. That is their core money maker. They scour the data collected and sell it to companies looking to push their wares. There are indications that some, i.e. Musk, want to get away from that. He is implementing Twitter Blue which is trying to generate revenues through subscriptions. While it is a sound idea, it does not alter the core business model that he operates from.
With Twitter, there is no ownership. All is on the servers of that company. You are at their mercy, essentially at the whims of their algorithms.
Here is a prime example.
@eddiespino had his Twitter account zapped.
This is what he had to say in a post:
Supposedly, I broke their rules but haven't done anything unusual. I do what most Hivers do. Share links to Hive posts, promote Hive, participate in Twitter Spaces, etc. I don't know if it was a mistake or if they just got too strict with the rule about not sharing links from other social networks.
The reason why it was suspended is not really relevant. In the end, it does not matter. The account is gone simply due to the fact Twitter owns it, not the user.
In addition to this one, how many other accounts were suspended in the last 24 hours? How many will be restored?
There was some sage advice to come out of this.
Don't get too attached to your #web2 accounts. At any moment, you can lose it forever. You will lose followers, your Tweets, and all the time and effort invested.
Unfortunately, this is not going to be true in the future.
Social Media Means Finance
What was not lost in the process was money sitting in a wallet. At this time, there is no wallet system on Twitter. Yet, the plans are to implement financial services such as payment. There is speculation cryptocurrency might be involved, which would likely mean that Twitter creates wallet that resides on the platform.
We do know Musk talked about the idea of having NFTs on Twitter. This would also align with the wallet system.
Here is the problem: what happened if there was $10,000 worth of tokens and NFTs in the wallet associated with this account? Not only would that data be lost, so would the money. Twitter, at any time, could essentially cut you off from your assets with no reason or explanation. Forget a court order, they don't even need to tell you why it happened.
People get upset when their social media account is suspended. They get downright angry when there is money tied to it.
Trust And Counterparty Risk
In the end, it all comes down to trust and being able to accept the counterparty risk. Here is where the business model of the existing social media companies fails.
As Musk moves Twitter in the direction of offering more financial services, a greater degree of trust for these entities is required. This is because the counterparty risk increases as the stakes are moved higher.
How does Hive differ?
Really, it comes down to whether the blockchain is running. As long as there are nodes with the software that can be accessed, people can get to their wallets. Whatever is there, as long as one is holding the private key, is accessible.
We see the exact opposite with Twitter. Since account ownership is not in the hands of the users, an episode like this could have huge financial consequences.
The idea behind cryptocurrency was to reduce counterparty risk by eliminating the "middlemen". With Hive, it foster the concept of merging social media along with finance. Elon Musk is taking this to a new level but with Web 2.0 as the foundation.
Hence the "Twitter Dilemma".
As he achieves success, the trust in these companies is going to be exposed. The actions over the last couple years left a bad taste in people's mouths. What happens when there are stories of people losing accounts with $100,000 in them? How will that play with the masses?
It is evident that this will not work. That means either individual account ownership is granted or regulations are implemented where these companies operate like banks. Of course, this brings up the question of whether people will keep trusting regulation as a safety net.
Either way, it appears to be a broken model. This will be exposed when finance is actually integrated into these platforms.
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