By Nick Hodges
In a past column, I talked about how the fat cats of social media profit from all of the value that normal folks like you and I provide. Social media sites have complete control over the attention-creating value that we provide for them, and give us little to no say over how that content is managed. They can even take away access to our profiles. All the money generated by our work ends up in their coffers.
I mentioned Substack as a place with low take rates, and how content producers there are able to benefit much more directly from the value that they create because they use a common protocol—email—that is not controlled by any corporate entity.
Well, there is another protocol that isn’t controlled by a central entity—in fact, it is designed specifically not to be controlled by any single entity and to allow individuals to both own and capture their content: the blockchain.
Blockchains are deceptively simple. They leverage the ability of cryptography to create unique “hashes” of digital data. Think of a hash as a digital signature of a given set of bytes of any size. A computer can run a hash on those bytes and create a much smaller set of bytes that identify the original bytes uniquely. Changing even one bit in the original digital artifact will result in a different hash. This, in effect, let’s you prove that the original bits have not been modified in any way.
Social networks meet private property
Blockchains incorporate these unique hashes into an immutable “chain” of entries, or blocks, where each entry (which cannot be altered without everyone knowing) verifies the accuracy of the next block in the chain by containing a hash of that entry. Each block in the chain verifies the next, and any change to the entire chain is immediately identifiable and can easily be rejected through consensus across the network. In this way, the integrity of the entire blockchain remains intact. Throw in overwhelmingly compelling incentives to keep everything on the blockchain, and you have a “public ledger” that cannot be altered and can be examined for accuracy by anyone at any time.
Sadly, the blockchain has developed a bad reputation because when people think about blockchain, they tend to think purely of cryptocurrency, volatility, and a “casino culture,” to take a phrase from Chris Dixon’s definitive book, Read Write Own: Building the Next Era of the Internet.
But cryptocurrency is the little toe of blockchain technology. Sure, it is currently the best known blockchain implementation, but it’s far from the only one possible. Blockchain’s real potential lies in its ability to enable digital ownership over things like identity and content.
Because blockchains can create digital uniqueness, they can also create digital scarcity. This is done via a mechanism commonly called “non-fungible tokens,” or NFTs, which can declare a unique, non-reproducible identifier on the blockchain that can be controlled by an individual. Sadly, many people think of an NFT as merely as a digital image that people speculate on. But an NFT is much more than that—it is really the thing that enables ownership of digital property.
If you combine this notion with the ability to create digital tokens that people value, the possibilities are endless. (“Digital token” is a much better term than “cryptocurrency” because tokens are not necessarily “money,” per se.)
Imagine a better Facebook
Imagine a social network defined in code that has rules that cannot be changed without the permission of the members of the network. Every post and comment you make would be digitally signed by you and identifiable as yours. The network and all of its artifacts, including yours, would reside on a blockchain.
The network could issue tokens to members whose posts and comments receive attention and add value to the network. Members would award tokens to people who create content that they value. Developers who add new applications and features to the network would be rewarded as well, creating incentives for them to do so. If those tokens were redeemable for cash, everyone would be incentivized to participate, and the value could be returned to the members.
These kinds of social networks would be decentralized and available to all. They would not be controlled by central private entities, but rather by the network members themselves. They would be defined and managed not by the whims of wealthy individuals, but rather by the rules clearly defined by those who have built the network. Those rules would be public and literally unchangeable without the permission of the members of the network themselves.
Now, something like that sounds a lot more appealing than lining the pockets of corporate fat cats, no?
