Elon Musk Plans to Close Twitter Deal on Friday – Now What, Crypto?
Billionaire entrepreneur and Dogecoin fan Elon Musk has told investors that he plans to complete his $44 billion purchase of Twitter on Friday.
The confirmation came in talks with banks that included Morgan Stanley, Bank of America and Barclays, which have each pledged $2.5 billion in loans for Musk’s takeover.
In total, Musk’s seven banking partners have pledged around $13 billion, according to reports in Bloomberg on Monday.
Binance is another major investor in the takeover, having pledged $500 million to the deal. Other Twitter investors backing Musk include the Qatar Investment Authority and venture capital firm Sequoia Capital, which has a strong track record in blockchain investment and cryptocurrency advocacy.
Cryptocurrency and Twitter
Twitter is a social media fest for crypto devotees, even coining the common acronym “CT” which stands for “Crypto Twitter.”
As the gathering place for some of the most prominent voices in the industry, Musk’s take on interest in the community is standard.
This interest only increases when combined with Musk’s personal fondness for Dogecoin (DOGE). Add financial support from the industry into the mix, and a pretty compelling narrative emerges as to why CT should follow developments with interest.
What does Musk plan for Twitter?
Musk has made no secret of his plans to overhaul the social media site, remaking the platform in his own image. The outspoken provocateur has previously described himself as a “free speech absolute”, suggesting a reduction in demand for moderation staff. Musk has also asked Twitter users about the possibility of changes to the platform that could include a edit button.
During a TED Talk in April, Musk believed that Twitter should become a platform for freedom of expression.
“I think it’s very important for it to be an inclusive arena for free speech,” Musk said. “Twitter has become the de facto town square.”
Twitter moderation staff have long suspected that their jobs would be at risk on Musk’s Twitter. A report in Washington Post on October 20 confirmed that his plans are far more drastic than previously understood.
It is now believed that Musk plans to cut Twitter’s 7,500 staff by 75%, leaving only a skeleton workforce of around 2,000.
With such a vastly reduced workforce, questions arise as to whether Musk will be able to solve Twitter’s long-standing problems.
Twitter and its big bot problem
It’s no secret that one of the most damaging problems with Twitter is bots. Musk himself cited the issue as a reason to back out of the deal, before eventually changing his mind (again).
As previously reported by BeInCryptoMusk finds scam bots endemic and especially annoying.
“The [scam bots] make the product much worse. If I had a Dogecoin for every crypto scam I saw, we’d have 100 billion Dogecoins, Musk said.
The followers of major crypto personalities such as Binance CEO Changpeng Zhao (CZ) are regularly targeted by scammers. Any post from CZ tends to get flooded with a lot of scam responses, and he’s not alone. One Twitter post by Bitcoin maximalist Jimmy Song recently had as many as 40 bot responses within the first minute.
The question is whether Musk can tackle Twitter’s bot problems while reducing staff costs.
Elon Musk really loves Dogecoin
Elon loves Dogecoin and as of late Can of this year designated its potential as currency.
At one point, Musk even considered incorporating Dogecoin into the Twitter ecosystem. This became public knowledge during the discovery phase of his recent legal battle with Twitter.
“I have an idea for a blockchain social media system that does both payments and short text messages/links like twitter,” Musk said in a message reported by TechCrunch in September “You have to pay a small amount to register your message on the chain, which will cut out the vast majority of spam and bots. There are no throats to choke, so freedom of speech is guaranteed.”
In a message to Steve Davis, the president of The Boring Company, Musk considered another option.
“My plan B is a blockchain-based version of Twitter, where ‘tweets’ are embedded in the transaction of comments. So you have to pay maybe 0.1 Doge per comment or repost of that comment,” Musk said.
Musk later abandoned the plan as unworkable, but perhaps there are other ways Musk could try to incorporate his favorite crypto into the platform.
A premium version of Twitter could be a way to do this, as could a tipping mechanism. At this stage, there is no indication that any of these options are being seriously considered.
The difficult history between crypto and social media
Crypto hasn’t always had an overly friendly relationship with social media.
In 2019, Facebook placed a blanket ban on all crypto advertising, while YouTube has been known to ban or block influencers including Anthony Pompliano whose content they labeled “harmful and dangerous.”
Both sites seem to have improved their stance more recently, but it outlines the historical difficulties that crypto has faced.
With a Dogecoin-friendly Musk controlling Twitter (with a little help from industry insiders), supporters can hope for a better attitude towards society as a whole. Whether that expected optimism matches reality is a completely different matter.
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