- How Blockchain Empowers Social Media: on the mechanics of token economy and decentralization?
Just now·8 min read
—Stories behind three typical paradigms: Steemit, Bihu, and Voice
Nowadays, users have an increasing demand for decentralized platforms when censorship, privacy disclosure, and security of personal data are severely concerned in traditional social media. The innovative blockchain technology perfectly solves this dilemma by reducing the trust cost, protecting users’ freedom of expression, and serving as a reliable framework of the peer-to-peer (P2P) network.
Taking a further step, a few social media companies have introduced the token system into their platforms. Tokenized social media connects the platform and users through their consensus on the token value. Moreover, the token economy incentivizes users to contribute their intelligence to the virtual community and participate in on-chain governance. In this article, we will introduce three typical tokenized social media, Steemit, Bihu, and Voice, in facets of their business models, token design, as well as insightful analysis about its strengths, weaknesses, opportunities, and threats (SWOT). Finally, we will discuss how tokenized social media revolutionizes the online communication ecology and builds the future community of diversity and inclusion.
Figure 1: This diagram shows the relationship among the concepts of P2P social media, decentralized social media, and tokenized social media.
[Whitepaper] [Website] [Weibo] [Home page]
[WhitePaper] [Website] [GitHub] [Twitter] [BluePaper]
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We will picture a sweeping landscape about tokenized social media by introducing three typical decentralized social media through four articles with weekly updates.
In week 1, we introduce the basic business information for three specified tokenized platforms, Steemit, Bihu, and Voice, in four facets of team compositions, partnership, technology, and fund sources.
Figure 2: Week 1 Mindmap
Figure 3: Sketch of three trending tokenized social media
1.1 What is Steemit?
Steem is a blockchain database that supports building a community and enhancing social interaction through cryptocurrency rewards. Steem combines the concept of social media and the lessons learned in building a cryptocurrency and its community. In this product, Steem establishes a fair accounting system that can consistently reflect everyone’s contribution. As a result, STEEM is the first cryptocurrency that accurately and transparently rewards countless individuals who make personal contributions to their community.
The Steemit community provides the following services to its members:
a. A source of curated news and commentary.
b. A means to get high-quality answers to personalized questions.
c. A stable cryptocurrency pegged to the U.S. dollar.
d. Free payments.
e. Jobs responsible for providing the above services to other members.
Steemit is a New York-based startup co-founded by Ned Scott, CEO, and Daniel Larimer, CTO. Daniel, who previously founded Bitshares, an industrial grade “crypto-equity” and peer-to-peer distributed ledger, resigned to work on his next project, EOS, which provides secure access and authentication, permissioning, data hosting, usage management, and communication between the dApps and the Internet.
Figure 4: Ned Scott, Steemit Founder & CEO
Figure 5: TRON Foundation (Beijing, China)
Together With SEMrush, Steem designs network monitoring that provides a full view of the company’s online performance, website traffic performance, traffic metrics of domains, and comparison of the traffic data of websites.
Through the collaboration with BuiltWith and G2 Stack, Steem makes it easier for developers to find out the technology stack of any website. Create lists of websites and contacts by the technologies used.
- Dynamic fractional bandwidth reserve model
Steem uses a dynamic fractional bandwidth reserve model instead of a traditional fee system where the blockchain automatically adjusts the network’s reserve ratio³ during congestion times. Steem sets a target utilization that leaves enough room for short-term surges, and when the surges persist, the blockchain reduces the maximum bandwidth per share. Thus, anytime an individual user’s moving average bandwidth exceeds the current network limit, their transaction delays until their average falls below the limit.
- Minimum account balance requirements to prevent Sybil attacks
To discourage Sybil attacks, Steem sets a minimum account balance to make transactions that are typically as low as a dollar. This mechanism provides a better user experience than charging transaction fees, given that the opportunity cost of lost interest is a more acceptable cost to users than micro fees on every transaction.
- A hierarchical private key structure
Steem constructs a hierarchical private-key structure to facilitate both low- and high-security transactions. Below are the three type of keys with increasing power in authority:
1. Posting keys: allow accounts to post, comment, edit, vote.
2. Active keys: further enable transferring funds, converting Steem Dollars, voting for witnesses, placing market orders.
3. Owner key: additionally, empower changing any key of an account and prove ownership during account recovery.
Steem also uses a master password that encrypts all three keys and allows users to trust certain services to keep improper keys from being transferred across any servers.
- Token protocol: Smart Media Tokens (SMTs)
The token protocol of SMTs have three key features:
1. Allow the creation of arbitrary tokens that aligns incentives between users in platforms with “like” or “upvote” based algorithms.
2. Empower websites to adopt sustainable revenue models using native tokens and the so-called Proof-of-Brain mechanisms.
3. Enables anyone to start earning money with low entry barriers by contributing their time to growing a community.
Figure 6: Parallax Digital, United States
Figure 7: Solidum Capital, Slovenia
Figure 8: PECUNIO Cryptocurrency Fund, United Arab Emirates
Figure 9: Advance.Fund, United Kingdom
Figure 10: Asymmetry Asset Management, South Africa
Figure 11: Fundamental Labs, China
Figure 12: The Hive Index, Germany
2.1 What is Bihu?
Bihu is a vertical community of token investors driven by tokens. Here, all “user-generated contents” are part of the token incentive system. Below are three key features:
1.User ID: to realize a transparent operation of the platform;
2. Blockchain token: KEY is the blockchain token of Bihu, representing the right to use Bihu and its surrounding ecology;
3. Token Economy: users’ effort and contributions are rewarded.
Figure 13: Bin Lu, Bihu Founder & CEO
Bin is a blockchain expert with a Ph.D. degree acquired from the US and a CFA certificate. He is the founder of Bit Fang Blockchain Research Club (www.bitfarm.io). He has a famous network name, “Bit Gollum”.
He has many years of experience in the US stock market. He was introduced to Bitcoin in 2010 and completed the Chinese translation of the first edition of Ethereum White Paper at the end of 2013. He is an early member of the Ethereum project team and currently engaged in research, development, and investment on the blockchain, including but not limited to Ethereum, secondary development based on Ethereum code, implementation of private chains, and federation chains, practical development of smart contracts and programmable assets.
Figure 14: Bihu Partners
- Bihu ID
Bihu ID is an open-source, non-profit, blockchain-based autonomous identity system in which users own their private keys.
Its mission is to protect user property, data, and privacy in the context of Web 3.0. The biggest difference between BithuID and traditional blockchain accounts is that Bithu ID enables users to retrieve the property and data in their accounts if losing their private keys.
- A centralized platform and decentralized token
Due to the limit of blockchain technology, Bihu uses traditional techniques to build a centralized app, which has more extended functions, faster running speed, and a better user experience.
- The separation between use & storage
Bihu separates the storage of and the use of KEY. This intelligent design solves the limitations of the current blockchain technology regarding transaction throughput, final transaction delay, and transaction cost. On the one hand, KEY is implemented by the ERC20 token standard through the Ethereum blockchain. On the other hand, the use requirements of the KEY are realized through the independent technical solutions of the Bihu platform.
In the first stage, the function of KEY is realized in a centralized way. That is, the user sends the Key to the Bithu platform for centralized storage. Therefore, only a tiny percentage of KEY will be actually stored in the form of a “wallet.”
In the second stage, the KEY is stored in the BithuID, where the user controls the private KEY. Then, the backstage of BithuID reversely observes the blockchain to obtain the usage data so that the KEY usage is separated from the storage.
3.1 What is Voice?
Voice is a blockchain social media product based on EOSIO, which is created and used by users. Users can create, distribute, and discover good content on it to get Voice token rewards. Most of the value created by Voice will return to the community through Voice tokens. On Voice, all interactions between users are on the chain, open and transparent, and there are no hidden algorithms or opaque benefits. Furthermore, Voice intends to create a platform where there are no fake accounts and news. Voice believes users should commercialize their content and the value it generates, and the user should determine the cost of being paid attention to by the community.
Voice is a social marketplace for Non-Fungible Tokens (NFT) that helps emerging creators get discovered. It is a privately held company founded in 2020 with approximately 200 employees, among which 134 are on LinkedIn. Headquartered in Brooklyn, it specialized in social media, online media, Information Technology, NFTs, Digital Art, and Marketplace.
3.3 Partnership and Affiliated Party
Figure 15: block.one logo
Blockchain startup block.one has opened its blockchain-powered social network Voice to limited public access with a promise to reward users for quality content. Voice is built on Block.one’s EOSIO protocol is best known for the EOS token. EOSIO launched in 2018 with a promise of offering an operating system that allows scalable decentralized autonomous communities with the support of asynchronous smart contract communication.
Crunchbase reports a total funding amount of $150USD by block.one.
Figure 16: Crunchbase logo
: SEMrush is a software as a service (SaaS) company based in Boston that sells online visibility and marketing analytics software subscriptions.
: BuiltWith is a website profiler tool, and it can return all the technologies it can find on the pagel upon looking up a page.
 Similar to the concept in macroeconomics, the adjustment of network’s reserve ratio is aimed at making every user’s bandwidth dynamic in order to adapt to the change of transaction volume.
Authors: Ray Zhu, Tianyu Wu
Design: Austen Li
Assistant Editor: Xinyu Tian
Associate Editor: Tianyu Wu; Executive Editor: Ray Zhu
Chief Editors: Prof. Luyao Zhang, Prof. Yulin Liu
- Date of publication:
- Thu, 06/10/2021 - 23:34
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