On October 28, the world’s richest man completed his $44 billion buyout. He was fulfilling the deadline to avoid a trial in a lawsuit filed by Twitter after he attempted to back out of the arrangement he inked in April. And with this came the question of how crypto on social platforms would be impacted.
Changpeng Zhao, Founder and CEO of Binance, has stated his willingness to assist Elon Musk, the new owner of Twitter, in bringing the social media platform into Web3. CZ also indicated that he wants to ensure that crypto has a seat at the table regarding free expression problems. However, he added that the exchange could also benefit Twitter by assisting it in adopting crypto as a form of payment for things like subscriptions.
Elon Musk is well-known for his enthusiasm for cryptocurrency, so Binance’s backing should be no surprise. According to a new analysis, Musk is the author of the most popular tweets on cryptocurrency in the previous few years; But does this portend a bright future for social media crypto?
The introduction of Web3 technology has prompted Web2-based businesses to reconsider changes to their existing goods and services. Many big companies are promoting their brands and demonstrating their association with future technology using Web3 technologies like nonfungible tokens (NFTs).
Another area where Web3 has the most influence is social networking. Facebook has been renamed Meta, and its goal has switched from being a social networking platform to becoming the future doorway to the metaverse. Instagram, which Meta owns, has begun providing NFT minting and trading services within the app. With 3 million wallet holders on the network, Reddit, another popular social media platform, has become a hotspot for NFT trading. Aside from NFTs, social media behemoths like Twitter and Reddit have enabled users to tip content providers in bitcoin. The bulk of social media networks, however, lack built-in crypto integration.
Web3 onboarding is still behind and must be simplified and accelerated, and social media platforms can help onboard billions of users to Web3 almost instantly. The success of the Reddit NFTs demonstrated this. According to Max Kordek, CEO of blockchain infrastructure platform Lisk, Web3 is a transition. It is not an autonomous internet ecosystem, and these platforms are best suited for onboarding.
Twitter was purportedly working on its cryptocurrency wallet, and with Elon Musk’s recent $44 billion acquisition, many speculated that the social media network might very well include a cryptocurrency wallet soon. However, new rumors indicate that Musk has temporarily paused crypto wallet ambitions. The debate surrounding Musk’s employees and moderation practices has eclipsed his promises to upgrade Twitter’s services quickly.
Despite the present roadblock in the crypto wallet integration, market analysts believe that additional Web3-focused services will be added to the social networking platform.
According to Martin Hiesboeck, head of blockchain and crypto research at cryptocurrency trading platform Uphold, Twitter currently allows crypto tipping, so adding crypto wallet functionality is the next natural step. He quotes, “Many in the crypto space are bracing themselves for how Elon Musk will impact the industry, and the response has been surprisingly optimistic. Musk will clearly drive the digital asset integration with the platform. For instance, many platforms will offer their crypto wallets to keep transactions close to their ecosystem. Twitter doing this is a logical step for a social network that already enables users to send tips in crypto.”
Musk’s purchase of Twitter generated news not just because of the difficulties surrounding the transaction but also because he turned the social media network private nearly 13 years after it started public. Since Twitter is now a private firm, Musk has a more significant influence in decision-making, which many feel will help him push for more crypto and Web3-related services on the site. According to Jack Jia, head of GateFi at finance startup Unlimint, during the last 18 months, a substantial portion of Web2 platforms have integrated Web3 functionality. He thinks Twitter will follow suit with Musk at the helm.
Social media platforms began to communicate with people worldwide, and in the Web2 ecosystem, they evolved into an essential component of the internet. However, with time, these social media platforms evolved into a consolidated home of data for millions of users, on which large brands and businesses rely to market their products.
The reliance on social media platforms for advertising has resulted in misconduct at various social media companies. These platforms were discovered to sell sensitive data about their users to marketers, and weak security measures have also resulted in data leaks and abuses of privacy rights. Therefore Kayla Kroot, co-founder and creative director of the decentralized publishing platform Koii Network, feels that these social media firms’ crypto ambitions will harm the business in the long run. Kroot used the current controversy around Musk’s intentions to implement an $8-per-month fee for the infamous “blue tick.”
She also mentioned growing awareness about data autonomy and user privacy, which are highly valued within the blockchain community. She stated that integrating cryptocurrency “into networks that actively violate the community’s core beliefs will be seen by crypto natives for what it is: a cash grab.” The public’s image of cryptocurrencies might be far worse, harming its overall perception.”
Most prominent artists on conventional social media platforms are currently generating platform traction, but the platforms gain from that traction through ad income, not the creators. As a result, the bulk of these crypto integrations is betting on the trend rather than working within the spirit of the nascent technology.
On the one hand, the increased interest in incorporating Web3 technology into Web2 social media platforms has been welcomed as a step toward broader acceptance. Web3 specialists, on the other hand, think that social media platforms are merely counting on the trend and not the ethos of Web3, which might eventually drive away genuine crypto acceptance, citing Meta and its recent failure to reinvent itself as a Web3 brand as an example.
Even before the Elon Musk takeover, Twitter had already dipped its toes into crypto waters. The microblogging platform had already set up a Twitter Crypto division and allowed users to receive tips in Bitcoin and Ether. The platform also offers NFT profile pictures and USD Coin (USDC) Stablecoin payments for a select group of creators.
Since Musk is quite outspoken about cryptocurrency, this acquisition will be a game changer for the crypto market and for social media. It’s only a matter of time until this comes into play.