Web 2.0 social media failings, Web 3.0 promise.

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8 Dec 2023
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To understand how Web 3.0 can disrupt social media, it’s important to first understand the most pressing issues with current mainstream platforms:

Data Ownership and Privacy Issues



On websites like Facebook and TikTok, users generate immense amounts of data through their posts, messages, social graphs, behaviors, and more. However, this data is centrally owned and controlled by the platform companies themselves. Users lack ownership over their own data. Platforms frequently face controversies related to misusing or improperly exposing user data. Decentralized alternatives based on blockchain and encryption allow users to control their personal data.

Censorship and Opaque Moderation Policies


Centralized platforms like Twitter and Instagram establish their own content moderation policies. However, these policies are often opaque, inconsistently applied, and subject to political and social biases. Controversial account or content bans have raised censorship concerns. User-controlled networks allow community-based moderation.

Centralized Control and Platform Risks


Power and control lies predominantly with a platform’s executives and shareholders, not its user base. Networks can unilaterally change algorithms and policies without input from users or creators. And they can go bankrupt, get acquired, or pivot business models in ways that damage communities and economics. Decentralized control via DAOs and tokens provides users more influence and reduces platform-based risks.

Missing Out on Financial Value


On current social networks, company shareholders and executives almost exclusively capture the billions in value created by users and their data. Creator monetization features are limited as well. With Web 3.0 constructs like tokens and blockchain-based ownership, users can capture financial upside generated on decentralized platforms they participate in.

Lack of Portability and Interoperability


Once a user builds up their social graph, content library, and reputation on a platform like Facebook, it becomes difficult to switch or cross-post across alternative networks. No common data and identity standards exist across walled gardens. The open ecosystem emerging on Web 3.0, founded on portable digital identities, user-owned content, and permissionless innovation affords greater flexibility.

The Game Changing Innovations Within Web 3.0



Advances across cryptography, blockchain technology, tokenomics, and more under Web 3.0 provide the ideal toolbox to remedy the issues raised above with Web 2.0 social networks. Here are some of the most important innovations:

Cryptography and Encryption


Modern encryption schemes allow user data like messages, posts, and social connections to be privately and securely stored in a decentralized way across peer-to-peer networks, affording privacy. Unique user identifiers like decentralized IDs (DIDs) verify identity without revealing personal details. And asymmetric cryptography enables signature-based digital ownership even for publicly viewable content.

Blockchain Technology


A blockchain is a decentralized, transparent ledger for recording transactions and data in an immutable way across a distributed network of computers without centralized intermediaries. On social platforms, blockchains enable transparent content moderation, decentralized identity, cryptocurrency payments, and establishing digital ownership.

Tokens and Cryptoeconomics


Tokens are blockchain-based assets that can represent value, ownership, identities, permissions, votes, and more. Well designed token systems with clearly defined incentives, ownership rights, governance privileges, contribution rewards, and usage parameters help coordinate stakeholders in decentralized networks like social platforms and properly align them to contribute and govern sustainably.

Decentralized Autonomous Organizations (DAOs)


DAOs are organizational structures with rules encoded transparently into smart contracts on a blockchain, coordinated by software and not beholden to any centralized entity. Authority and governance are distributed across diverse stakeholder groups. Allowing shared ownership and governance via a DAO empowers users and reduces platform-associated risks.

Interoperable Standards


Unlike closed ecosystems like Facebook, open sourced, community-driven technical standards allow decentralized networks to actually interoperate, facilitating seamless cross-platform profiles, content sharing, messaging, payments and more across the open metaverse. Data portability and permissionless innovation ignite network effects.

The Power of Data – Why It’s Become the New Oil


The analogizing of data to oil has become popular shorthand to signify the immense, untapped value that lies in digital information. But how and why has data become so valuable in today’s heavily digitized world?

Unprecedented Amounts of Digital Data


Ubiquitous internet connectivity, smartphone penetration, social media use, and adoption of services like search, e-commerce, and GPS maps has resulted in humanity generating over 2.5 quintillion bytes of data each day. This data explosion will accelerate with coming waves of IoT sensors and machine learning systems. Analyzing this massive pool of structured and unstructured data is becoming one of the most strategic resources for both technology companies and organizations in every industry.

Emergence of AI, ML and Data Network Effects


Advanced artificial intelligence and machine learning algorithms can extract patterns, insights and intelligence from large, contextualized corpuses of data to drive automation and enhanced decision making. Unlike oil however, data can be reused and repurposed to fuel exponential improvement cycles across entire ecosystems of connected products, services and recommendations. In a machine economy, data begets more data.

Fragmented, Siloed Data Under Web 2.0 Incumbents


Most data produced today sits fragmented and siloed within the servers of various Web 2.0 platform incumbents. Companies like Google, Facebook, Amazon, Apple, Microsoft and Tencent have built vast walled gardens stockpiling petabytes of consumer, enterprise, location, and IoT data. Unifying and liberating this partitioned data for flexible aggregation, analysis and monetization unlocks tremendous latent value.

Data Marketplaces and Intelligence-as-a-Service


As cloud computing undoes traditional vertically integrated IT stacks, data is becoming its own horizontal layer and asset class. Standardization, sellable APIs, and data marketplaces enable lucrative data sharing across industries to refine AI models or derive targeted business intelligence. Decentralized Web 3.0 protocols take this even further by affording individuals ownership over the licensing and sale of their personal data.

Data Privacy, Security and Sovereignty Concerns


As data accumulates exponentially across public clouds and centralized repositories, new questions around privacy violations, surveillance overreach, cybersecurity vulnerabilities, lack of transparency, and loss of personal sovereignty proliferate. Distributed encryption, access control and shared governance primitives introduced by Web 3.0 present solutions to these rapidly emerging threats.

Main Reasons & Benefits of Building Social Platforms on Web 3.0


Given all the failings for users on current mainstream social networks outlined earlier and the powerful capabilities introduced within Web 3.0 covered above, what exactly are the main reasons and primary benefits of building decentralized social media apps on next generation internet technology?

Reasons for Building Social Dapps on Web 3.0


  • Restore power, control and ownership to users
  • Enable user data privacy by design
  • Mitigate centralized censorship and ensure transparency
  • Distribute financial value across users and builders
  • Afford interoperability across platforms
  • Unlock network effects through open ecosystems
  • Accelerate permissionless innovation
  • Operate sustainably via decentralied governance


Benefits for Platform Users


Owning One’s Own Content and Identity

Unlike posting on Instagram or Twitter where content is perpetually licensed out, on Web 3.0 social apps, users’ digital content and profile data remains privately encrypted and owned by them via decentralized identifiers and verifiable credentials. This content persists independently of any specific application through interoperable data protocols.

Controlling How Personal Data Is Used

Users enjoy granular controls enforcing how their data is utilized. Preferences can dictate whether data is publicly accessible, restricted, monetized through relevant ads, licensed to third parties, or sold in data marketplaces. Personal usage data need not be carelessly tracked if users desire privacy.

Censorship Resistance and Policy Participation

Moderation policies on Web 3.0 social platforms are enacted primarily on-chain via smart contracts in a transparent and decentralized manner. No central authority can arbitrarily delete lawful content or deplatform accounts. Users can monitor policy changes and even directly influence platform governance based on token holdings.

Earning Value for Content Contributions & Engagement

On Web 3.0 networks, users can earn tokens for productive activities like posting engaging content, fostering healthy discussions, reporting policy violations, coordinating groups and more. Value accrues directly to those creating it, unlike Facebook and Twitter where users labor for free to enrich shareholders.

Investing in Platform Growth and Governance

Users committing capital to governance tokens gain equity, voting rights and financial upside in the decentralized networks they participate in. Token holdings afford users influence over roadmaps and policies proportional to their stake and commitment. Early adopters seeding nascent networks can benefit significantly.

Benefits for Creators & Influencers


Direct Monetization of Content & Fan Relations

Under current platforms’ Partner Programs, influencers face inconsistent reach, demonetized videos and creators surrender content ownership. Social apps designed for Web 3.0 instead empower creators to directly monetize content via subscriptions, token-gated access, affiliated NFT sales and fan community coins or DAOs.

Granular Analytics on Content Performance

As creators directly publish to decentralized storage protocols like IPFS, granular on-chain data analytics offer transparency around how content spreads across the broader network, informing viral strategies. Performance visibility need no longer be subject to not providing an API like on Instagram or arbitrary analytics limits from YouTube.

Censorship Resistance and Data Portability

Under centralized networks, demonetization or arbitrary account bans threaten creators’ livelihoods overnight. Web 3.0 platforms insulate against single platform dependencies. Open standards ensure seamless content portability across apps while moderation resistant infrastructure maximizes audience reach capabilities.

Direct Platform Investment, Governance and Participation

When governance power and financial benefits start accruing to engaged platform participants instead of remote shareholders, incentives align for creators to actively shape the networks they rely on by investing, stewarding shift oversight via DAOs and lending their iconic status to empower decentralized branding efforts for sustainable growth.

Benefits for Platform Builders


User Alignment Incentivizes Engagement

Token engineered participation designed to distribute ownership, governance and financial rewards across users and creators incubates grassroots evangelism. Platform contributors are directly invested in the networks’ success. Aligned incentives drive organic adoption instead of expensive marketing and brittle network effects.

Community Governance Enables Sustainability

DAOs decentralize administrative upkeep, content moderation and network evolution across engaged token holders, preventing consolidation of control and single points of failure. Platforms stewarded by their users persistently manifest their values instead of maximizing profits or devolving into spam.

Permissionless Innovation Powers Iteration

Open ecosystems founded on shared standards invite boundless interoperable iteration on social features and experiences from both startups and casual developers. Rapid experimentation on UX, security primitives, governance tactics, recommendation engines etc. accelerates innovation. Incubation of novel community norms fertilizes new use cases.

Composability Drives Network Effects

The essence of Web 3.0 lies in money legos, wherein modular open source components address individual problems that plug and play together freely to build robust ecosystems. Specialized protocols for identity, content storage, messaging, payments, reputation etc. interoperate to tackle social networking on a deeper level. Shared data layers and tooling allow flexible innovation.

Web 2.0 social media platforms have delivered tremendous value by connecting the world, giving everyone a voice, and supporting creators. However, issues around data privacy, content moderation, platform dependency, financial value partitioning, toxicity risks and general user disempowerment pervade the most popular networks today.

With personal data exploding exponentially in a world being permeated by artificial intelligence software, new questions around digital rights, privacy ethics and user sovereignty proliferate. The underlying protocols and rails upon which social networks operate require rethinking. Web 3.0 affords this opportunity to redistribute power to users in shared, open ecosystems native to the peer to peer nature of internet technologies from inception.

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