The Worrisome Business Model of Social Media: Could Blockchain be a Solution?

It has been at the front of the mind for most lately- especially for those of us with active social media accounts. With recent allegations coming to light on the use of our data by social media platforms, users are more concerned than ever with how their data is being collected and profiled with – and sometimes without – their permission.

As you probably know, Facebook founder Mark Zuckerberg was recently questioned in the US Congress after a whistleblower from Cambridge Analytica, a data-centric voter profiling firm, informed the media that the London-based organization had aggregated Facebook data from up to 87 million users, in what many consider to have been an unethical broach of privacy. The data was mainly collected through third-party apps connected to Facebook, and then used without explicit consent to influence political campaigns.

One question in particular in the congressional session made Zuckerberg squirm more than most. When Californian Rep. Anna Eshoo asked Zuckerberg if he was willing to change his business model in the interest of protecting individual privacy, he failed to give a straight yes or no answer- despite the failures of Facebook to protect the data eventually obtained by Cambridge Analytica.

Unfortunately, this is not a new trend in social media’s current business model. Platforms have become increasingly dependent on the profitability of ads, most of which rely on user data for targeting. Earlier this month, Google-owned Youtube came under fire for allegedly collecting data of children under 13 years old. A group complaint filed with the Federal Trade Commission states that YouTube has been collecting data, including phone numbers and locations of such children without parental consent, to use for targeted ads across other websites. The group asserts that in doing so, YouTube breached the Children’s Online Privacy Protection Act (COPPA), which states that parental consent is a legal requirement for the collection of children’s data.

After the complaint was filed, Jeff Chester of the Center for Digital Democracy stated “Just like Facebook, Google has focused its huge resources on generating profits instead of protecting privacy.” With allegations of social media goliaths encroaching on their users’ rights to privacy becoming more common, many people are looking for alternative platforms they can trust instead.

As the established industry works to change their current processes, new platforms are emerging that attempt to integrate solutions from the ground up. Due to privacy concerns, censorship, and bans on cryptocurrency ads, many content creators are taking their talents to decentralized platforms. These new upstart sites run on blockchain technology, allowing users to pay creators and commenters in digital tokens rather than traditional methods. This disruptive method could create safer spaces for users’ data and more valuable monetization methods for creators and advertisers.

Less-centralized platforms strive to keep privacy in the power of its users, rather than freely sharing with third parties. While traditional video streaming sites often turn loyal users into commodities, new platforms like Verasity facilitate direct and transparent exchanges between content creators, publishers, and viewers. By using blockchain technology to host videos, store data, and connect viewers to content creators, this new platform is making social media more transparent and integrated for all.

To further develop its ecosystem, Verasity created its own cryptocurrency to facilitate exchange on the platform. Called “VERA,” the cryptocurrency rewards users who create, view, or share vide; users can also earn VERA by watching advertisements. Through this model, the platform attempts to diversify the modes of monetization for creators and publishers, who in turn receive greater value from their content.

While similar in theory to streaming platforms like Current or DTube, Verasity is working to create a new ecosystem for its users to trust that their data is safe within it. Rather than relying solely on targeted advertising, which is how Facebook and YouTube currently operate, Verasity holds as a founding belief that viewers should have the power to decide if they want to expose themselves to targeting- including whether their demographic information can be used towards such purposes.

While regular social media users grow increasingly worried about the use of their data on traditional, ad-reliant sites, even pushing some people to promote others to #QuitFacebook, blockchain-backed platforms could offer the solution we need to trust social media once again.

Featured Image: Clem Onojeghuo on Unsplash