Web3 New Internet Social Networking

Today's newsletter is co-authored by Siddharth, who, ironically, is enjoying a trip somewhere in the Himalayas outside of social networks. Over the past few months, we've been brainstorming about the current state of the internet and whether web3 primitives will play a role in the future. This article is not a detailed analysis of the market overview, hardly any tokens are mentioned, and it is definitely not the best case for decentralization and the Internet.

Instead, it explores the motivations and reasons for the emergence of social networks today. Along the way, I explain in detail how we can build a new vision for the Internet and the creators within it through the infrastructure empowered by the blockchain.

In 2020, when there was a global lockdown, I started spending a lot of time on Clubhouse. I spend an hour every morning talking about what's going on in the cryptocurrency industry, and I attract a large audience. At a time when everyone was working remotely and people were stuck at home, Clubhouse became a hot topic just like AI, decentralized finance and non-fungible tokens are today. However, Clubhouse quickly slipped from $3.4 billion in value and is now an app people don't talk about anymore.

There are many reasons for this. The novelty wears off. People don't have time to engage in conversations online all the time. Or they have a better chance of dialogue in reality. One might think that Twitter Spaces simply duplicates the functionality of Clubhouse for many users. But looking back, it was a valuable lesson for anyone building an audience online.

**Your performance is determined by the quality of your social network links, and your network is only valuable if it can be maintained and advanced. **This is the difference between a city (like NYC) and a gaming community where the potential for social networking to disappear is very real. Physical social networks are more permanent than those we form online.

Investigate social networks

Telephone operators recognized the challenges of social networking a hundred years ago, before social networks like Clubhouse existed. In the early days of the telephone, independent telephone operators in the community often connected the telephone to a speaker to communicate. Similar to later podcasts, people could broadcast information in real time over the phone, allowing villages to communicate, think of it as a primitive form of radio.

As early as 1922, there was a campaign against radio advertising

As large corporations like AT&T and Bell took over America's phone lines, these smaller phone networks and their original podcasts disappeared as operating private, niche phone networks became unsustainable. It's an episode we'll see many times in this article, as we travel through the rise and eventual demise of multiple social networks.

The emergence of new networks, whether railroads, telephones, or the Internet, and new communication media have one thing in common. They opened up entirely new ways of collaborating, and both the Age of Enlightenment and the Arab Spring benefited from those who found new expressions to drive human progress. But as we've seen, new forms of communication aren't built overnight.

They go through a process of evolution and mutation until acceptable behavior on those platforms is defined. For example, you don't act the same way on Reddit as you do on LinkedIn (I think). In order to establish these ground rules and play socially, a social network is required.

The Age of Surveillance Capitalism

Realize user's attention

In the book "The Age of Surveillance Capitalism", Shoshana Zuboff refers to user interaction on platforms such as Google as behavioral value residual. Historically, a company had finite resources that it had to immediately use to produce and sell to you. Otherwise, companies will pay high storage fees. A pencil manufacturer has to ship pencils, a Ford factory has to sell cars, they can't just keep stocking wood and rubber.

However, this changed with the advent of the Internet. Companies like Google or Meta can keep your data for ten years until it can be monetized for their benefit. I can now log into Facebook and download all the embarrassing text messages I sent to my crush in 2011 (and you can too).

As I often do on this publication about how to parse blockchain data for better consumer targeting, teams at Google considered using sensors to capture user data as far back as 2000. They note that capturing data from wearable devices and indoor sensors can help create user profiles that are more tailored to individual needs. At the time, they didn’t know that we would be carrying watches capable of taking EKGs 24/7, or that half of the world’s mobile devices would be powered by a Google-supplied operating system (Android). A new resource has emerged here. The supply of user data is abundant, but the monetization mechanism is not yet mature.

At the beginning of the 21st century, most Internet companies' projects were like today's artificial intelligence websites, with a lot of traffic but little or no business model. You can license your search engine to large corporations, or sell sponsored ads like Yahoo. We've tried doing that on this blog, but as anyone knows, bear markets are the worst times to sell ads. So Google had to find a different way to sell ads entirely.

Rather than having people bid and list ads based on their assumptions about what audiences will click on them, Google's data scientists can measure and predict which ad will work best for which person. Instead of a brand’s ad manager working on assumptions, it’s a data scientist targeting users, enabling brands to clearly see the rate of return they’re getting from every click on Google.

The perfect opportunity is ready for the growth of the network. A business realizes that it can generate and store a resource (user data) at almost no marginal cost, and has the means to monetize it (targeted advertising). And the only thing missing in most VC-backed company styles is a mechanism for scaling, which is where social networks come in.

Quoting from the book:

In Google's early days, the feedback loop involved in improving its search features created a balance of power: Search needed people to learn, and people needed search to learn. This symbiotic relationship allows Google's algorithms to learn and produce increasingly relevant and comprehensive search results. More queries means more learning; more learning yields more relevance, and more relevance means more searches and more users.

See the section on "More Users"? One of the most powerful user on-ramps is the network effect of new-age networks like Facebook and Twitter. Social networks serve two purposes, first, they make the internet go from a weird niche technology like LimeWire or AOL to one where kids in school talk about cool stuff. Second (and more importantly), it provided the business model for the Internet.

More users effectively means you have a critical mass that can be segmented and sold as various items. Users belonging to similar social networks can be grouped and provided with similar content, which becomes the basis for finding love, work, laughter, despair, and hope in the current algorithm feed.

As creators, today we spend time on platforms like Twitter or Facebook because they are the means by which content is distributed. This is because these social networks have an insatiable need to be able to provide content relevant to the relevant social network, which keeps users engaged. If a group of fintech enthusiasts are constantly receiving content from cryptocurrency influencers, they will eventually get angry and leave the platform.

Likewise, if my Web3 content is shared with a subset of audiences who hate it, my incentive to create content will be greatly reduced, and platforms play a key role in targeting content delivery based on their data on users. Platforms that keep users engaged for longer periods of time are able to sell more ads and collect more data. As they accumulate more data, their ads become more relevant. In every sense, the process is an unlimited money-printing machine.

In the Web2 network, the social network is a kind of moat. If you allow users to interact with social networks through third-party applications, you reduce your chances of capturing user data. After all, users will no longer use products that you control. If users can simply move their network of friends and family into another app, they have no incentive to go back to your app.

We don't have a shared protocol for social apps at the scale of Meta or Twitter because of how the existing giants' incentive structures are structured. A Web2 product that opens up a network of social relationships will face competition and declining revenue, neither of which may be desirable outcomes.

Composable social network

In the golden age of platform censorship, the centralization of social networks also poses risks. A recent article in The Verge sums up the questions people have been asking in the context of Elon Musk's Twitter behavior and the US's desire to rein in TikTok's growth.

The following is an excerpt from the article:

But if our current social system were decentralized, you could post a photo on Instagram and I could see it and comment on it in the Twitter app. Your friends can read your tweets in their TikTok app. I can exclusively use Tumblr, and you can read all my posts on Telegram. Different apps will have different strengths, weaknesses, censorship policies, and creator tools. But no matter which platform you use, you will have the same followers and follow the same accounts. No more "Facebook friends" and "Twitter followers". Social networks and product markets will be completely separate.

What they describe is a network of social relationships that is composable at scale. This is a mechanism that enables users to access their network between different applications in the way they think is best. What would that look like? Many applications that emerged after the year 2000 do not yet have standardized protocols. We have SMTP for email, DNS for resolving domain names, and RSS for articles.

But what if you want to send disappearing pictures between Snapchat, Whatsapp, and Instagram? What if you could use content on Twitter with a proprietary algorithm tweaked to suit your preferences? Or what if there was a version of Instagram that didn't force you to watch Reels?

Without an agreement for social network maintenance and portability, control is lost. Users can no longer be sure how and what content they consume. With RSS feeds, users are in control of their own content. But on Twitter, Elon Musk and his followers are in control.

As early as 2007, a solution was proposed for this situation. OpenSocial is a collaboration of several large social networks to create a set of APIs that allow platforms to replicate a user's social network elsewhere. For users, this means they don't need to worry about re-friending when they join a new social network. For platforms, this means not having to compete with the network effects of existing networks. Everyone is a winner, right?

This is not the case, and platforms today are known to have closed social networks. Initially, the product was only used by Orkut and eventually attracted more than 350 million users. Rumor has it that Google signed non-disclosure agreements with social networks like Friendster and Myspace, then disclosed the news to Facebook and forced Facebook to join.

The strategy worked for a while, as the chart below shows. By the end of 2007, OpenSocial's application web traffic was five times that of Facebook. In 2008, there were 350 million users on the network, but by the 2010s, people gradually realized that an open network of social relationships did not meet the aspirations of the Internet. Like Libra in 2022, a project that is partnered by large organizations in a non-profit manner will often be defeated by small teams that move quickly.

In just a few years, Facebook rose to prominence and became dominant because they managed to build a large user base. They do this by being an open platform on which third-party developers can deploy applications. In the early days of social networking, people didn't just come to these platforms for the content. The app is a big draw for them, remember Farmville? The company behind it (Zynga) thrives on network effects on platforms like Facebook. Every activity you take in the game spreads across your social network, which means more friends to play with.

In the early days of social networking, apps enabled the platform to capture attention, while user-generated content was gradually emerging. Posting shocking comments on the internet is not yet a habit, and the dopamine rush from the like and retweet buttons has yet to be discovered. However, it was these three elements—powerful apps, network effects, and the ability to distribute content and spread through social networks—that allowed the social network to establish itself in 2010.

Looking back, everything we explored about Web3 has already been covered on the Internet. Portability of social networking? It has already been realized. Embedding of applications and identities? Yes, I tried. A single protocol where multiple applications can interact with each other? Is boring.

There is nothing novel about these new approaches, but the technical layers to support them did not exist in the past. From the past server-side, monopolistic centralized ownership to the infrastructure transformation of blockchain-based user decentralized ownership, this is the "innovation" of Web3. OpenSocial was last updated in 2013. People I know don't have access to their Friendster or Myspace social networks today. You can't build or publish apps on Twitter the way you used to, and the blockchain may intentionally change that.

Mining the benefits of human attention

Siddarth Jain has used a beautiful metaphor to describe this problem. When a tree in the jungle dies, it has continuity, contributing to the growth and maintenance of other trees afterward. When a community on the internet dies, there is little it can pass on to the thing that takes its place. Going back to how I started writing this article, Clubhouse went from the app we use every morning to the app nobody cares about.

As I write this, Naval's Airchat is trending on Twitter. I'm excited about this because it uses artificial intelligence to enable people to have conversations in their native language. I want the app to be able to communicate with our global readers, in their own languages. But when we started using Airchat, we started with a blank canvas - a network of social connections that didn't exist.

Lens Protocol provides an alternative for this situation. The essence of their product is very simple, you have a social network associated with your identity, owned by a wallet that allows you to log into a series of different applications. As a hypothetical example, it means that subscribers to this blog can also choose to see my posts in an Instagram-like feed, or short-form content like Twitter, without having to sign up for each app separately.

This protocol approach to human attention is innovative in Web3. It’s already at work in NFTs for SeaPort and DeFi liquidity, as we’ve seen with Uniswap. But if human attention is captured in a protocol like Lens, can it be shared across different applications?

I'm not sure, but there are some advantages to doing this. It greatly enhances the competitiveness of social networks and lowers the barriers to entry for creating new social networks. Founders can focus their time on the app itself, rather than building user communities themselves.

In this case, you can have your own social network of friends, but you will connect with them and post content through a third-party application. Nikita Bier recently shared on Twitter a modular approach to enabling social networking. I guess he may not like Web3 too much, but the "reusable" element he mentioned is exactly what can be applied to the blockchain.

As Lyn Alden points out in this post, we've had open money for a long time. But open social networks have yet to take off at scale, in part because of the lack of a clear business model. When social networks like Facebook took off in the mid-2000s, it was an ad-driven model that had been perfected over the years.

It is not very clear about how to profit from Web3 social products. Now we need to clarify several differences. First, decentralized social networks have been around for a while without the use of tokens. Mastodon, Nostr, and Bluesky are all functional products without tokens, and I don't entirely see tokens as the future standard for social networks.

Second, decentralization presents challenges that may not be solved through existing means. Data must be stored in a decentralized social network in a P2P network like IPFS or Filecoin. There are costs involved, and even if these costs are small, they can be prohibitive for many users. Additionally, there is currently no clear model for discovering content or algorithmically targeting users if content exists entirely on-chain.

Today, discovery content is often analyzed on-chain via products with massive barriers, such as Nansen or Covalent. For now let's ignore for now the fact that the content is different from the transaction data. These products incur costs in parsing and categorizing what appears on the chain. Who bears these costs? It also ignores that in this model, service providers can still tweak their algorithms to fit their agenda, leaving users with little choice in what content to consume. So we end up making the same mistake again.

What I want to say is the following two points:

1. Decentralized social networks have been around for a while, and humans are creatures of convenience. Incentives for content dissemination, distribution, and discovery are much more efficient in Web2 localized products, with no upfront cost to users. This is why most of the social networks we know exist in closed centralized social networks.

2. Simply introducing tokens cannot make up for the lack of early liquidity of human attention, because unlike capital in NFT or DeFi projects, attention cannot be "locked" on a product. When a user locks up $1,000 on Aave, the transaction can take up to 10 minutes. You can't just hand out tokens and expect users to spend 1,000 hours on a social network, which is why most Web3 social networks die quickly. (Remember Steem?)

Block unicorn note: Steem is a decentralized social media platform based on blockchain technology that uses tokens to reward users for participating and contributing content. Now telling us that Steem's way, is a failure, this sentence reminds people not to forget Steem's failure, to emphasize that the use of tokens alone does not guarantee the success and durability of a social network.

Embedded Social DApp

So, what is the point of Web3 social networking? Is it just to issue tokens and pretend we're on the verge of a new internet? Or do these infrastructures really have potential? We can think through the points mentioned by @mhonkasalo in this post.

Apps need a certain liquidity threshold to become impactful. For Uniswap, this is locked capital. For Mirror or Lens, it's the number of people creating content and engaging with it. Essentially, token-based networks have a huge advantage over Mastodon or Nostr in launching initial liquidity to become influential.

This does not deny that someone will spam or contribute to writing content just for the airdrop. If you think about it, people like Ben Thompson (from Stratechery) or Packy (from Not Boring) have very little incentive to move to new Web3-native platforms whose audiences are already on their mailing lists and Twitter. A strong relationship is formed.

But for a brand new creator, building a whole new audience base and finding opportunities in a community of drop hunters like Lens can be a powerful strategy. Token networks help scale social graphs like Lens from 0 to 1. A great example of a creator growing with a platform is Bill Bishop. He was one of the first authors on Substack, and his newsletter subscriptions have grown dramatically as the platform has grown.

The challenge is how to keep the community alive after reaching a threshold level, say 10,000 active members on the app. At this time, the DApp ecosystem factors of Web3 will play a role. Remember when I mentioned that apps like Farmville are key to the massive audience base on social networks?

In Web3, apps and social networks will forge a symbiotic relationship, since neither currently sees a substantial user base. But what if you could trade tokens based on what the influencers you follow are mentioning? Or collect an article directly from your feed as an NFT? Interfaces already exist to do this, but they are scattered across different applications.

Just like Facebook enabled a generation to build applications based on its private social network relationships, Web3's DApps will be able to leverage emerging social networks using protocols like Lens. Under such circumstances, we need a tool or interface that enables users to easily interact and operate between social networks and DApps so that they can share content, trade assets, collect NFTs, etc., without relying on specific platform or application.

I'm implying the combination of social network and DApp composability. In this case, users can consume content, trade assets, collect NFTs, or directly reward creators without the platform having to bear the risk of these operations. You can get liquidity from Uniswap, OpenSea or Mirror to perform these operations.

Platforms can charge a small fee (e.g. 0.1%) on each transaction as a service fee for connecting protocols and users together. This may sound unbelievable, but consider that assets traded on the Metamask platform alone have reached around $3 billion in volume. Once you have established a user base, you can embed various financial applications.

Open interaction between social networks and open-access applications is key to making Web3-native social networks a reality. As things stand, we exist in isolated islands. We often make skeptical decisions alone when trading on Uniswap. We track the activity of the DAO through products like Snapshot, wondering who else is involved, and then we continue to read articles from our favorite authors on the Mirror and support them. Every interaction is siled in Web3, and people Does not like being alone for too long and requires interaction between users.

No one knows which cool Web3-native game their friends are playing. **Crypto and Web3 these days is either a cutthroat PVP game where only a few emerge as winners, or an isolated single player game where you hold your assets tightly in your hands. ** And the technology to enable cooperative multiplayer games already exists, namely DAO.

But our platform rarely uses DAO. Imagine having a large group of people, getting the pieces ready, but not organizing and collaborating effectively enough to reach their full potential or achieve their goals. In the meantime, they're yelling - WAGMI (We'll All Win/Win), scrolling through Twitter to see if Ethereum is considered a security by the SEC, which is what we've been doing on some infrastructure Things to do.

My point is not that Web3-native social networks will be a hotbed for Twitter influencers to find more ignorant victims to promote their new memecoins. True creators can monetize their work and empower the community to exploit it. For example, we often have readers translate our work into Chinese or Vietnamese, and I love when people take our content and create their own spinoffs.

People often ask me if I can do this to avoid being accused of causing controversy when translating works. Web3 can solve this simple problem if one can mint an NFT (non-fungible token) on Mirror as a derivative work of our article and upload their own NFT to the same collection. (By the way, I have no plans to make more articles into NFTs at this time, but I will soon organize all the translations I see on the website).

Establishing the relationship of authorship on the blockchain adds credibility to both original articles and derivative works without stealing any thunder from the creator. It is a simple but effective proof of provenance. But what about the distribution of money? Woolen cloth?

I've been thinking about the business element of being a creator. We did a paywall test on some of our archived articles on Decentralised.co because Substack doesn't allow you to make content (for free) visible only to subscribers. Despite the "please don't pay" message on the paywall, we've still had people pay for content over the past few weeks. I'll share more plans at another time, but here's how the math works out in very simple terms.

For a creator on TikTok to earn $60,000, if their only source of income is advertising, they need to maintain a consistent 100 million views per month for a year. A newsletter that charges $20 a month would need about 250 subscribers to reach the same number. Those numbers may be off, Nas noted, but the basic idea remains valid.

Free content often spreads well, but current monetization mechanisms don't effectively empower creators who specialize in smaller niches. We’ve already seen that Web3 offers an alternative through royalties in NFTs. The idea is that creators can make an asset (like a painting) and they get a cut of the royalties every time that asset is traded. I don't think this model is scalable because most artists who don't have distribution channels probably don't have access to it.

COMMUNITY AS A NETWORK ECONOMY

Instead, a community formed around a creator will pool resources to support that creator. In a Web3-native social network, artists can distribute and disseminate their content (attracting attention) at the same time, and like collecting articles on Mirror today, some core users will "collect" them, and these core users can in turn be like Aggregation and coordination like DAO.

When a creator publishes a new work, those subscribers who have already bookmarked the creator's work can be the first to access it. Build micro-communities for creators through feedback loops that incentivize community members to actively contribute. This will be when creators will be able to benefit from the economic activity of the people they bring together, and creators will become founders of new digital cooperatives.

I believe this is the future of the creator economy, and for good reason. Creators have expanded into business areas, increasing their revenue streams. Most frequently mentioned star brands include Ryan Reynolds' collaborations with Mint Mobile and Aviation Gin. But before that, Rihanna had Fenty Beauty, Jay Z had Rocawear, and MrBeast had his burger joint. Historically, creators' sources of income have been limited to their artwork. Modern creators capture more value by extending their brands.

However, a creator might not be the best fit to enter a new line of products. For every celebrity acquired for billions of dollars, countless influencers launched brands and failed. Even if there is a chance to launch a brand, it needs to reach a certain scale and specifications.

Protocols like Lens allow third parties to look up how many likes or retweets a post has received. An application could then be built to curate connections between only those members who have gained a certain amount of engagement on-chain. Of course, the challenge with such a system is that it incentivizes individuals to spam for engagement. But with strict content curation, such a curated social network could be attractive if apps were built on top of it.

I tried to explain what the transition would look like in the picture below, the model below shows the difference between a Web2.0 influencer and a Web3.0 community curator. Blockchain-enabled payment channels will enable creators to enable commercial interactions between members. Green lines on the left represent payments between members, while dotted blue lines pointing toward creators represent possible royalty payments.

For example, someone could build a Producthunt-like version and bootstrap community members from our members at Decentralised.co. A third party could build an angel list or a consortium DAO and query the most active VCs and founders in our community, both possibilities exist today.

However, today's Internet lacks the composability of social networks. When we advertise, we pay Google or Meta (or the writer of this blog) to recommend a startup to a smaller subset of the audience. The way humans think, however, is because we've effectively blocked ads from our immediate surroundings. An average person sees about 4,000 to 6,000 ads in a day. We consume without realizing it, and the human attention span has evolved to ignore ads because it's a cognitive load we didn't ask for.

Composable social networks can solve this problem by getting people to buy new products. For example, if a new game is being released and they want to engage the Decentralised.co community, all they need to do is list them on Substack. Users can choose whether they want to interact with their products. This shift—from platforms deciding what is best for users, to users choosing products based on their preferences—is the fundamental promise that Web3 social networks can deliver.

You might think this seems far-fetched and unnecessary, but experimentation is what makes DeFi and NFTs so powerful. When a centralized product manager runs a platform like Instagram or Twitter, you have no say in how the product evolves. You could also argue that users shouldn't have a say in how the product evolves - but I think it's a different story when it comes to social networks. When users are the ones driving the growth of the platform, there needs to be a balance of power between shareholders and stakeholders.

Community-driven content networks have been around since the existence of the Internet. Wikipedia is a powerful example. What Web3 brings to the equation is the possibility of financialization and user ownership. Would Wikipedia contributors like to have an opinion on the direction of the product? I think they will.

** Attracting a large number of users (scale) has long been the main incentive for the Internet. **As I've written before, people write on Twitter instead of Mirror because the distribution happens on the former. However, if we change the incentives so that people don’t become products, we can lay the foundation for a better internet—one that doesn’t require the creation of content to stir emotions.

It might seem far-fetched to imagine a social network that involves payments, but Twitter already charges $10 for premium subscribers, and the internet is littered with instances of communities switching from free to paid consumers.

In India, most of my generation used torrents in the early 2000s because products like Netflix or Spotify didn’t exist yet; and even if they did, those platforms wouldn’t accept our debit cards. However, something has changed in the past decade. As more and more Indians go online, and the payment network in the country develops, we can say that economies of scale have been achieved. Paying to watch the latest movie or cricket match has become commonplace because it's easier to pay than bother to go the illegal route. Convenience is the ultimate sales pitch if consumers don't have to spend money to make a decision.

**The behavior of monetizing content on the Internet has always been limited to an elite few who have achieved scale. Web3's native social network allows creators to change the monetization model by providing new alternatives. **

Viewed through this lens, we will soon have digitally native nations. Balaji Srinivasan's research focuses on the other end of the equation—an era in which digital communes can perform functions that traditional states do. I think that before that shift happens, creators will be the founders of niche-oriented micro-nations.

They won't collect taxes or issue identity verification documents like governments do today, but they will play a key role in creating and growing entirely new industries. This may seem far-fetched, but considering that Satoshi Nakamoto and Vitalik Buterin are the founders of their digital economy, their holdings of Bitcoin and Ethereum represent the value they generated in creating a new financial paradigm.

Powers Empowering Users

Erik Hoel is one of my favorite writers on Substack. In his most recent article, he argues that the emergence of new social networks is impossible and no longer worth pursuing. As we scale up, we hit what he calls "semantic nadir" - the tendency to understand things in the worst possible way. You publish an article about how much you like burgers, and someone on the Internet will take this as a declaration of war on vegetarians (Block unicorn note: this is mainly to emphasize that in the Internet environment, even very simple and Harmless information can also be misinterpreted or interpreted maliciously).

He argues that as human networks expand, our tendency to slander or attack each other increases. The internet can sift through the worst things humans can do and present it to you overnight.

His argument is correct as long as we assume that distribution (and nothing more) is the key incentive for social networks. My thesis is that incentives can be completely restructured. However, there will be a transition period before this happens. During this period, users can adjust the algorithm to suit their preferences.

In such a system, the social network might not be owned by the user, but the algorithm that decides what to show the user can be adjusted by the user. This might seem far-fetched, but platforms like JoinColumn* are already working in this direction.

One place where the internet has seen the power of community and users is Reddit. The API interface that drives external mobile applications on Reddit has increased significantly in price. This change will affect everyone, from giants such as OpenAI to small mobile applications.

The number indicates the number of subforums that have been privatized for the protest, with 8,400 of the 8,800 subforums currently privatized in the largest protest in the digital sphere.

Changes in the price of Reddit API interfaces such as Apollo made it impossible for these interfaces to continue to function. Many large subreddits with tens of millions of users started to become "darknet," meaning that the pages were set private so that users could no longer access the subreddit.

Unless users leave Reddit in large numbers, the outcry may be somewhat muted. (At the time of writing, 8400 subreddits out of a total of 8800 have been made private). But platforms like Snapchat and companies like Meta have demonstrated over the past decade that social networks have a strong Lindy effect — the longer they've been around, the more likely they are to continue. This is because users face a high opportunity cost of deleting their Facebook or Twitter accounts entirely.

They can’t easily reach the same group of friends elsewhere, and portable social networking connections (like the one Lens enables) offer an alternative, where users can log out of the platform but still stay connected to their friends.

Think of it as social networks are countries and platforms are business entities. Transitioning completely from one country can be very difficult, as anyone who has ever moved and lived elsewhere knows. However, a platform with a commercial interest should entirely be considered an entity that can be switched at will.

Today's Internet does not give users this option. We're seeing the impact of this in text-based apps like Signal and WhatsApp. You can choose to quit WhatsApp entirely and message the same friends on Signal, only to find out that only a small percentage of your friend group actually use Signal.

Ultimately, creating a new internet with entirely new incentive structures requires rethinking how the internet has evolved over the past three decades. Assuming that users will be attracted by slapping token incentives or shiny new buttons is a poor revelation. We need creators and their audience base to rethink how and why we interact with each other on the web, and the ways in which some of this can be monetized without involving user data.

A model that preserves privacy but does not distribute may not succeed, and likewise a model that achieves scale but does not retain users will not work. We'll see multiple iterations and narratives in the market as these transitions happen, but it's clear to me that now is the perfect time to try and create a truly Web3-native social network for the masses. Humans are creatures of habit, and changing our past 30-year habit of getting content for free and posting pointless ads will be a slow and difficult process.

Peter Thiel sparked controversy in the early 2000s for his vision of an era of technological stagnation. If I were a venture capitalist in that era, I would have thought the same. (I still think so now though, because mentally I'm a pessimistic old man). In fact, Twitter’s Tascha took a very similar stance recently — there’s been nothing new or groundbreaking about cryptocurrencies for a while, and until we get to it, the market probably won’t recover.

I agree with these points, but I also think we are looking at the problem in the wrong way. Cryptocurrencies have no shortage of fund apps or trading products. If you take account abstraction into account, it's not even a UX challenge. What it lacks is a social network that can help these products spread in a way that keeps consumers entertained and engaged. And, unless we produce social products that offer more than tokens, this won't happen. We see massive, privately held network graphs emerging. For example, Layer3 has over half a million users, and with credible, on-chain activity in their user base, they are fully capable of scaling into a social network.

As the aforementioned user pointed out on Twitter, the difference between AI and cryptocurrency is how many people use the underlying technology. One way to invert the relationship between token holders and product users is to look at social products, where tokens are not required to interact with the product.

Just as it took a while for retail-oriented large-scale social networking to emerge in Web2 in the mid-2000s, it may be a while before we see large-scale social networking in Web3. It's a function of time, and we've tried in the past, experimented and failed many times with social products in this space. But the difference is that in 2023, the technology to make these kinds of social products possible already exists, which gives me hope.