What Musk’s Twitter Acquisition Could Mean for Social Media Crypto Adoption

The rise of Web3 technologies has caused Web2-based companies to consider changes to their current products and services. Many leading brands are using Web3 technologies such as non-fungible tokens (NFT) to promote their brand as well as show their association with emerging technologies.

Social media is another domain where Web3 seems to have the greatest impact. Facebook changed to Meta and has shifted its entire focus from being a social media platform to becoming the future gateway to the metaverse. Meta-owned Instagram announced that it would be adding NFT mining and trading services to the app. Reddit, another prominent social media platform, became a hub for NFT trading with 3 million wallet holders on the platform.

Aside from NFTs, social media giants like Twitter and Reddit have added support for users to tip content creators in cryptocurrency. However, the majority of social media platforms inherently lack crypto integration.

Twitter was reportedly working on developing its own crypto wallet, and with Elon Musk’s recent $44 billion acquisition, many believed that the social media platform could very well integrate a crypto wallet soon. However, recent reports suggested that Musk has put crypto wallet plans on hold for the time being.

Despite the current setback in crypto wallet integration, market experts hope to see more Web3-focused services on the social media platform. Martin Hiesboeck, head of blockchain and crypto research at cryptocurrency trading platform Uphold, told Cointelegraph that Twitter already supports crypto tipping, so the next logical step is to add crypto wallet support:

“Many in the crypto space are preparing for how Elon Musk will impact the industry, and the response has been surprisingly optimistic. It’s clear Musk will drive the digital asset integration with the platform. For example, many platforms will offer their own crypto wallets to keep transactions close to their ecosystem. Twitter doing this is a logical step for a social network that already allows users to send tips in crypto.”

Musk’s acquisition of Twitter made headlines not only because of the controversy that led to the deal’s finalization, but also because he took the social media platform private nearly 13 years after it went public. With Twitter now a private company, Musk has a bigger say in the decision-making process, and many believe this will help him push for more crypto- and Web3-related services on the platform.

Jack Jia, head of GateFi at fintech firm Unlimint, told Cointelegraph that over the past 18 months, a significant portion of Web2 platforms have integrated Web3 support, and he hopes Twitter will move in a similar direction with Musk at the helm :

“You can connect non-custodial wallets like MetaMask to Instagram or Twitter and display NFT as a profile picture. Google launched a fully managed Ethereum node service much like Infura and Alchemy. Then Coinbase and Revolut look more similar today than different in terms of crypto features and functionality. So Musk’s Twitter will have a big impact on crypto, probably by launching something similar to the Aaves Lens Protocol, decentralizing Twitter to make it more censorship-resistant.”

Web3 onboarding still lags behind and needs to be made easier and faster, and social media platforms can help onboard billions of people to Web3 virtually overnight. This was evident from the success of Reddit NFTs.

Max Kordek, CEO of blockchain infrastructure platform Lisk, told Cointelegraph that Web3 is not an independent internet ecosystem, but rather a transition, and these platforms are best suited for onboarding.

“I think what people often misunderstand is that Web3 is not an exclusive new Internet. Inside Web3 we also find Web2, in the same way that we found the previous World Wide Web in Web2. In terms of social media that integrates crypto, we are talking about a merger of Web2 and Web3. At the end of the day, a social media platform is just a distribution channel; Web3 doesn’t make them irrelevant. They will become increasingly important in a more connected future,” he said.

Social media’s past hinders crypto and Web3 ambitions

Social media platforms started as a medium to connect with people all over the world and in the Web2 ecosystem they became an integral part of the internet. But over time, these social media platforms also became a centralized array of data for millions of users, which big brands and companies rely on to advertise their products.

Social media platforms’ reliance on advertisers has led to malpractice on several social media platforms. These platforms were found to sell users’ sensitive data to advertisers, and poor security measures have also led to data leaks and privacy rights violations. This is why Kayla Kroot, co-founder and director of design at decentralized publishing protocol Koii Network, believes these social media companies’ crypto ambitions could harm the industry in the long term.

Citing the example of the recent controversy surrounding Musk’s plans to introduce an $8 per month fee for the infamous “blue chin,” Kroot told Cointelegraph:

“While any major mainstream technology platform’s integration of cryptocurrency can be seen as a positive step for adoption, the deeply entrenched capitalist tendencies of social media companies indicate that it will harm the industry in the long term. If mishandled, these integrations will push millions of potential users away. A recent example of this is Twitter’s controversial move to require verified members to pay $8+ monthly for Twitter Blue.”

She further noted growing awareness of data autonomy and user privacy – areas particularly valued within the blockchain community – and said that a move to integrate cryptocurrency “into networks that actively violate the core beliefs of the community will be seen by cryptonatives for what it is. : a cashier. The perception of the larger population could be much worse, damaging the perception of cryptocurrency altogether.”

Meta is a good example of this as the firm struggles to transition from its Web2-based origins to a fully decentralized Web3 ecosystem. Crypto integrations that are driven by profit and do not align with the ethos of the crypto community will not only alienate crypto-native users, but may add fuel to the anti-crypto fire. At its core, blockchain technology promotes distributed governance and ownership for users, but the larger social media platforms are still highly centralized, actively leveraging users’ content for traffic and revenue.

Currently, most of the popular creators on traditional social media platforms run the platform, but the platforms themselves benefit from this traction with ad revenue, not the creators. Thus, a majority of these crypto integrations seem to lean on the trend rather than truly work within the ethos of the new technology.

Tom McArdle, CEO of decentralized messaging service Satellite.im, called Twitter’s Web3 ambitions a “classic wolf-in-sheep’s-clothing moment for Web3.”

He told Cointelegraph, “It is likely that crypto will be integrated into the Twitter platform after the acquisition. Simply adding the ability to pay in Bitcoin or Dogecoin on top of an existing Web2 technology stack is not a step forward for the Web3 movement . Twitter will continue to operate in a centralized nature and will more aggressively monetize platform participants as Musk has strengthened the company to pursue acquisitions and now needs $1 billion a year just to cover interest expenses.”

“The integration of crypto payments is just another revenue stream and has nothing to do with the social and ethical priorities that come with the Web3 frontier – transparency, user privacy and data ownership.”

On the one hand, the growing interest in Web2 social media platforms for the integration of Web3 technologies has been hailed as a step toward greater use. On the other hand, Web3 experts believe that social media platforms are only based on the trend and not the Web3 ethos, which could eventually drive away true crypto adoption, citing the example of Meta and its recent failure to rebrand itself as a Web3 brand . .