On crypto-based predictions market Polymarket, users are seemingly giving Twitter’s new and seemingly unwilling owner Elon Musk the benefit of the doubt. According to a bet expiring Dec. 15, only 36% of bettors think “Twitter reports any outages” by that date.
Prediction markets, of course, are not infallible. But they do provide an interesting data point for people looking to become informed actors. By putting “skin in the game,” or money down that could conceivably be lost, betting markets give incentive to users to wager only on likely outcomes – deemphasizing their own preferences and other biases.
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The poll is all the more interesting considering the fierce headwinds Musk’s Twitter faces. According to recent reporting, Twitter has lost half its workforce, a number of advertisers are pausing or scaling back ad placements and users are seemingly abandoning ship. Some are saying this is the end times for the blue app.
All of this is good news for decentralized social media experiments that have historically struggled to match the growth of Silicon Valley incumbents. A number of apps, notably the non-blockchain-based platform Mastodon, and a few crypto-powered alternatives are seeing a jump in usage. While it’s still unknown what will happen to Twitter, a more diverse social media landscape should benefit users in the end.
Mastodon, the open-source microblogging network modeled on Twitter, is looking like the main beneficiary from the ongoing Twitter shakeup. The platform, founded in 2017 by now 29-year-old Eugen Rochko and developed primarily by a Germany-based nonprofit, has gained well over half a million users in recent weeks.
Many of these users say Mastodon feels like a friendlier but stripped-down version of Twitter. Mastodon is a “federated” network, meaning its servers are hosted by a diverse cast of users, rather than a single corporate entity. Mastodon users choose a server they want to join, and trust that whoever operates those computers will not manipulate their data (a bit like how Facebook or Twitter users have to trust those companies).
The benefit of Mastodon’s method is that the costs of running the program are spread out, and there are fewer incentives to monetize (read: exploit) users' data. People can also join different servers that set different content moderation standards – perhaps preferring a free-speech free-for-all or a more curated feed. They can still be blocked by server operators, but are theoretically allowed to port their “social graph” to another group within the federation.
At the same time, several new Mastodon users have reported finding the decentralized server system to be needlessly confusing, slower than Twitter and buggy. Not all servers are running the latest version of Mastodon, and many users seem to miss certain features and tools – like verified accounts and the ability to “retweet” other users.
As Bloomberg’s Vlad Savov put it in a recent review of the platform: “[T]he world prefers running Windows and macOS over the much more flexible and customizable Linux operating systems. We choose convenience even when it comes at the cost of capability. We want things done for us. And, most importantly, we take a lot for granted with free services like Twitter.”
Savov isn’t wrong, but he ain’t right. Many of Mastodon’s supposed defects are actually its primary benefits. But this whole situation may help explain why crypto-based social media platforms haven’t seen the same level of uptick even as many users actively search out alternatives. Almost no one, for instance, is talking about Bitclout.
Lens Protocol, the social media project incubated by decentralized finance blue chip Aave, is supposedly seeing more users. Aave’s director of developer relations, Nader Dabit, tweeted the protocol saw one million transactions last week – a notable number for the social network that uses non-fungible tokens to create user profiles and posts.
Ethereum co-creator Vitalik Buterin was one of Lens’ new users, tweeting out that he’s “eagerly” experimenting with alternatives. This includes Farcaster, which bills itself as a “sufficiently decentralized social network,” co-founded by ex-Coinbase staffer Dan Romero. In a recent interview, Romero noted Farcster is storing as little information on-chain as possible and has spent a lot of effort “attracting” “quality” “early adopters.”
In the end, a social media platform is only as good as its user base. These platforms tend towards monopolization because users want to be where other people are. Minds, the Ethereum-based Facebook alternative that incentivizes use with token rewards, has had a multiyear leg up on many newer social media alternatives.
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Minds is illustrative of the tendency for people to treat alternative platforms as fail-safes – a place to cross-post their thoughts in case something happens to their primary channels. Its white paper specifically notes the encrypted, open source program is resistant to “surveillance, algorithm manipulation, and censorship” – language that might attract a particular user base.
That, too, is not a bad thing – the platform boasted about 360,000 unique visitors from the U.S. in September. Further, this is not to suggest that Web3 innovations need to be sequestered off from the web as it's known. Meta's Facebook and Instagram are exploring NFTs, for instance, while Reddit's "digital collectibles" have been a surprising success.
Musk is hot-and-cold on crypto, but does think many of the industry' core values, like data persistence and portability as well as verifiable and open algorithms, are worth striving for. Actually having viable competitors that do just that could push Musk to implement these changes sooner. (Though it seems like he's already suspended work on a crypto wallet, while Twitter's crypto division's lead, Tess Rinearson, quit during the recent shakeup.)
It seems unlikely that crypto networks will grow to the size of their corporate-owned competitors anytime soon. The user experience is often buggy, the service slow – but what they might offer is the peace of mind that a single motivated individual can still come in and disrupt everything.
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