How Crypto Can Fix Social Media
If you spend enough time on social media you begin to wonder if these platforms were intentionally designed to keep people angry and divided. We don’t ask for much from social media; connecting with friends and family, getting useful information, having civilized conversations, sharing opinions and ideas, and so on — that is what we want. Simple, right? But what we get is the polar opposite: fighting with strangers, too much misinformation and lies, incessant outrage, hate and hyperpolarization.
Of course ‘what we want’ is the absolute bare minimum of what we should be expecting from a technology that connects billions of people from around the world — presumably including some of the smartest people in every human endeavor. These ‘wishes’ reflect the sorry state of social media. They’re the wishes of a prisoner yearning to be free, not the wishes of a free person shooting for the stars.
So what should we wish for from a technology that connects billions of people together and gives everyone access to vast amounts of information? Obviously if we untether ourselves from reality then the sky’s the limit (Everyone holding hands and singing kumbaya? World peace?) But if we are being realistic about what we can reasonably expect, the potential to improve social media is still insanely great.
Just imagine what social media could look like — given our current state of technology and the sheer number of people online — if everyone had the incentive (both economic and otherwise) to maximize their impact instead of maximizing clout.
Would that eliminate trolls and other people engaging in abusive behavior? Not entirely. But it would reduce their number to a minimum, since the incentive to troll and abuse — activities that generate much drama, and therefore increased engagement (views, clicks, comments, follows, and so on) — would be non-existent. The few remaining trolls could be filtered out by users with some advanced filtering tools (suppose if a user could decide to turn on an AI-powered tool that filtered out from their feed any posts that had abusive tone or language).
So we’re just getting started and already we can have — by simply changing the incentives — a social media environment with minimal trolling and abuse. An environment that protects everyone’s freedom of speech (since all can post freely) and at the same time empowers you by giving you the option to filter out abusive posts (which further disincentivizes trolling and abuse by making such behavior futile).
But if changing the incentives is all it takes to eliminate trolls, maybe the problem isn’t just with trolling but with the clout-based incentive structure itself.
Appearance over reality
Just think about what dynamics we get when everyone’s incentive on social media is to grow their clout. At the one extreme you have those who will do everything in their power to present themselves as more successful, more wealthy, joyful or leading more exciting lives than they really do so that they can grow their following. They forgo their authenticity, and the ability to genuinely connect with others and enjoy their online experience for growing their clout (and becoming more successful and influential in the process). These are the people the clout-based system rewards. It algorithmically pushes their posts because they’re likely to make the platform the most money.
At the other extreme you have those who choose to remain authentic, find pleasure in their interactions, and form genuine connections with others online. They do so at the expense of remaining relatively obscure on social media and therefore have less influence online. And then of course you have everyone in between.
Does this mean that people on social media can’t be both genuine and successful? Not at all. The point is that this is a numbers game. For every 10 reels or tiktoks of Lambos, how many of the people there actually own the car and how many rent one for a day so that others think they’ve made it? On social media both appear identical, but renting is much cheaper and therefore a lot more prevalent, especially given the incentives.
Now think about all those impressionable young guys and gals who are algorithmically flooded with reality-distorting images and reels. They actually get a compounded distortion of reality: people appear to be oozing with success and always having a great time, and they appear more often in their feed. Is there any wonder then that these guys and gals are feeling inadequate?
Social media was supposed to connect us and bring us closer together. At least that’s the story Mark Zuckerberg et al were pushing. Instead those who spend more time on social media — especially teenagers — seem to experience increasing rates of loneliness, depression and suicide. Those who choose to be true to themselves and form genuine connections online are put at a disadvantage by the system. While those who decide to play the clout game are rewarded by the system, but can’t enjoy real interactions and have to constantly compete with others in a make-believe virtual world. All this thanks to the negative dynamics created by the clout-based incentive structure.
So what if the incentive on social media was to create impact instead of growing clout? Think about how that would change the dynamics online. When success on social media depends on creating value, people don’t care about others’ wealth or status symbols. They care about what those people contributed to become successful so they can learn from them and become successful too. People who are already thriving are happy to share their knowledge since that is also a way to create more value. So you’re creating a virtuous cycle where people are gaining knowledge, making genuine connections, and benefiting from helping each other and contributing to society.
Now think about how that would work on the level of the platform. An impact-based social media platform doesn’t make money from advertising — it benefits when users make a positive impact.
The platform has no incentive to push attention-grabbing content. It doesn’t need to exploit our psychological vulnerabilities. Nor keep us mindlessly scrolling our feeds so it can maximize ad revenue. It does however want to amplify posts that are likely to create the most impact. It wants to empower us and serve us the posts that are most relevant to us. And provide us with the most advanced tools to facilitate collaboration and connect us based on our interest.
When the platform is built to maximize impact, the appearance of wealth or success no longer matters. Reality trumps appearance. If you pretend to be someone you’re not, it only hurts you. Impact is a metric that’s much harder to fake, so pretense would not help you one bit to get ahead in such a system. Instead people would detect the con and avoid you — which would make it more difficult for you to create value in the lives of others.
When people are no longer incentivized to maximize their clout, they also start to look at online conversations differently. They no longer need to stake out more and more extreme positions within their ‘tribe’ to gain credibility. Nor do they need to fear losing followers for agreeing with someone from an ideologically-opposed ‘tribe’ or for changing their mind on an issue. When the incentive is to maximize impact, learning and growing becomes more important to people than being confidently wrong. Admitting a mistake when you learn new facts becomes more important than doubling down on ignorance. And nuance becomes more valuable than seeing the world only in black and white.
It’s not that with an incentive to maximize impact all toxic content would magically disappear from social media. Nor will people suddenly stop being tribal or nasty to each other. It’s just that social media would no longer actively promote such behaviors by making engagement the most important metric. Without the engagement incentive the loudest, most extreme and controversial voices would no longer be the most influential ones.
Once the incentive for clout is gone, people no longer feel the need to drive engagement with outrage porn, divisiveness or controversies. Now people have the incentive to resolve conflicts, seek a deeper understanding and have more civilized conversations. This is true not just for individuals and groups within one country but also applies internationally — so maybe world peace is not a completely unreasonable wish after all.
Beating misinformation (without censorship)
Without the clout incentive there is also no benefit to exaggerating facts or making up misinformation. That strategy works well in the attention economy because such content tends to be easier to produce and more engaging. Credibility also matters less than clout in the attention economy, so there is no penalty for spreading misinformation as long as the increased attention gets you more views and followers.
While the attention economy incentivizes the spread of misinformation, platforms don’t have the tools to effectively combat it. Since no one can claim to be a credible arbiter of truth in the market, any attempt by the platform to remove or suppress misinformation leads to accusations of bias. Those who spread misinformation can also claim to be victims of Big Tech censorship, which further elevates their status. Not combating the misinformation problem, on the other hand, leads to accusations of facilitating its spread. So no matter what the platform does it’s in a no-win situation.
This problem goes away in an impact-based system. There integrity matters a lot more, so people don’t want to lose credibility by posting inaccurate or exaggerated information. When everyone has the incentive to maximize impact, instead of platforms maximizing ad revenue, the platform no longer has a conflict of interest in how it moderates content. Its only incentive is for users to have the most accurate content, so that they can use that information to create the most value. Since transparency is key to maintaining the trust of users, the platform still wouldn’t want to censor or remove content. It would however want to provide the most context and an accuracy rating for content, preferably based on user input.
This too can be a win-win situation for everyone: users have an incentive to accurately review content on the platform, since this creates value for the community. Everyone benefits from an environment with minimal misinformation and where they know the credibility of all content. And the platform has an effective bias-free content moderation mechanism with no need for censorship.
Growing human knowledge
By incentivizing impact we can also have an environment where you can learn from all the top experts in the world — from the most knowledgeable people in every field. Experts will no longer need to reserve their ‘best material’ for books, paywalled articles or private lectures, while only teasing the information on social media. That was a smart strategy for getting paid subscribers, but here they’d have the incentive to share all their knowledge with everyone, since that maximizes their impact. With all the information publicly available, experts would also be able to learn from each other and build on each other’s knowledge. They could also collaborate to make significant advances to human knowledge — a situation that is not possible when everyone has the incentive to work in silos.
The dynamics of impact
So we can have a social media environment where trolls are nearly non-existent, where people can genuinely connect with each other, and where reality is more important than appearances. Where disinformation is effectively neutralized and where you can tell the credibility of all content. An environment where people prefer civil discourse and real conversations over tribalism and outrage porn. Where the platform strives to amplify impact and empower users, instead of exploiting their psychological vulnerabilities to keep them scrolling. Why then are we still stuck in the toxic mess of the clout-based system? Why hasn’t such a transformational platform been built yet? What’s the catch?
Such a system has not been built because, to put it bluntly, a social media platform that is based on impact is not possible within the framework of the market economy. If we want to value ‘impact’ we first have to come to an agreement on what constitutes ‘impact’ in the first place — what is in the public interest. But in the market there is no such thing as public interest. There are only private (economic) interests. Competing interests, in fact! Which means that people in the market can never agree on what’s in the common interest.
If people have a great economic interest in any field they are less likely to agree on whether something in that field is in the public interest. To drive this point home, let’s do a little thought experiment. Think of some incredible innovation that can help millions of people. Preferably this should be something with no controversy at all about whether it’s in the public interest. Maybe this is a cure to a disease or some great advance in robotics. Now consider if there is some industry that benefits from the way things work now. Think about all the people working in this industry. It’s clear that if you were to ask people in this industry how they would rate the impact of the innovation they’d have an economic incentive to minimize it. Maybe they’d even claim it has a negative impact!
So if there cannot be an agreement in the market over something that should not be controversial, what hope is there for anything people are likely to disagree on? Without such agreement any attempt to qualify impact is arbitrary and therefore pointless.
New economic framework
How do we solve this problem then? How can we create an economic framework where people can agree on what is in the public interest, and — better yet — can quantify that impact? We need to start from first principles. An economic framework where everyone can agree on what’s in the public interest means that everyone’s economic interests in the ecosystem would also align. It also means that the economic effect on everyone should be proportional to the magnitude of the impact.
One way to visualize this is to imagine a company that operates according to a special rule: anyone who creates value for the company would be rewarded with shares equal to the contribution. Issuing new shares for a contribution means that current shareholders will see their shares diluted, and obviously they don’t want their shares to lose value. At the same time shareholders want contributors to create the most value for the company, so they want to reward contributors adequately. If contributors don’t expect to be rewarded adequately they won’t contribute as much or will contribute to competitors who offer better rewards.
You can see that all shareholders have a common interest both in maximizing impact from contributors and in maintaining the value of their shares. These two forces result in a dynamic equilibrium. It also incentivizes all shareholders to want an accurate estimate of the economic impact of each contribution.
Let’s illustrate this process with an example; if a company is worth $100M, and there are a million outstanding shares, if someone creates a tool that increases the value of the company by $2M, shareholders would want to issue 20,000 new shares to this contributor. That would increase the value of the company to $102M, while the value of each share will remain at $100.
Shareholders will want to reward the contributor with the amount of shares that is exactly equal to the value of the contribution. Too few shares would lead to fewer future contributions, as contributors will not trust the company. Too many shares would dilute the value of each share. It would also lead to some shareholders selling their shares as they lose faith in the company’s ability to maintain the value of shares.
Now that we see how the framework works at the level of a company we can take the next step and apply the framework more broadly. Instead of issuing shares to company contributors, we can create a decentralized social media platform that distributes funds to content creators based on the impact of their content. For that, however, we’d need blockchain technology.
Blockchain technology allows us to codify the rules for issuing funds based on a credible review process for the impact of content (this process is discussed at length in the Abundance Protocol whitepaper). The main point here is that the process is effective because everyone in the ecosystem has an incentive to accurately determine the impact of content, and that mechanisms are in place to prevent bad actors from gaming the system.
By making the platform decentralized people can trust that no individual, group or organization can manipulate the system or control it. Users can also be confident that funds are being distributed fairly and transparently, and that the interests of the platform are aligned with the public interest.
The major social media platforms are now fighting for every click, every view and every minute of our attention. They are looking for ever-more invasive and manipulative methods to keep us impulsively scrolling, and extracting as much data from us as possible. None of this is done for our benefit or with our wellbeing in mind. It’s a cynical competition, but not participating in this race to the bottom means losing users, market share, and, ultimately, profits.
Now suppose we disregard the current trajectory of the clout-based social media platforms. Suppose we decide to go against our best judgment and ignore all the flashing warning signs. Let’s say we give the platforms another chance to reform. Maybe, for some miraculous reason, they’d decide to have our best interests in mind and work to improve the user experience. Even then we know that — in the best-case scenario — the clout-based platforms can only achieve a small fraction of what is possible with an impact-based platform.
The fundamental problem with clout-based platforms is not bad intentions — it’s bad incentives. Can we expect a system that incentivizes trolling and divisiveness to provide a superior user experience and promote civil discourse? Unlikely. As Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.” For that reason no amount of tweaking, reforms or even regulations can solve the problems that are at the foundation of clout-based social media. Let’s then build social media on a stronger foundation!
The beauty is that we don’t need to pray to the gods of Big Tech to fix social media or provide us a better user experience. With blockchain technology we can come together and build social media that empowers individuals and works in their interest. Social media that promotes genuine connections and civil discourse. We can create a system where the interests of billions of people are aligned to contribute to human knowledge and to the common good. And where anyone can be successful based on how much value they create for the community. This is the power of a blockchain-based social media platform that is designed to maximize impact; a system that can be the foundation to a true 21st century digital public square.
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