How crypto, blockchain and Web3 could change Elon Musk’s Twitter, according to Cardano founder

Elon Musk has made no secret of the big role he sees for cryptocurrency in his newly acquired company social media company Twitter.

Binance CEO Changpeng “CZ” Zhao’s has decided to invest 500 million dollars (496 million euros) in Twitter, while Dogecoin – “the people’s crypto”, according to Musk, who has backed it – has risen since Musk’s takeover.

While other social media companies have tried and failed to use crypto or implement wallets (most famously Facebook and the Libra coin), Twitter may be successful, according to the founder of public blockchain platform Cardano, Charles Hoskinson.

“Now it’s an interesting thing to mix a social network with a financial stack,” he told Euronews Next at the Web Summit in Lisbon.

“Twitter is uniquely well-suited to do this. And a crypto component is something Musk has been talking about since the dotcom days, way back in the late nineties.”

No crypto usage strategy or any crypto wallet has been unveiled yet; at the moment, Musk has turned his attention to charging for the blue check mark confirmation and also firing personnel.

“It’s early days and what he’s probably going to do is come in and swallow the company, fire half the people, move it to Austin, put in very strong leadership that he trusts and then pull out and leave them on a way to manage it and then focus much more on merging these two worlds; the social networking side and the fintech stack,” Hoskinson said.

“It remains to be seen if he’s going to verticalize it and do it all himself, or if he’s going to do it with partners”.

While the SpaceX and Tesla CEO has strongly outlined his preference for Dogecoin, Hoskinson said he was “always available” to consult with Musk, saying a partnership with a particular cryptocurrency or exchange company would not only benefit Musk’s selected companies, but also the crypto sector as a whole.

“The rising tide of being an on-ramp is a very powerful thing, and they may have primary value from being a rising tide, but the secondary value is enough for all of us,” he said, adding that people who buy crypto usually don’t just hold one token as they own a bit of everything including Bitcoin, Ether or Cardano’s token ADA.

“If competition is king, and then if he makes bad decisions, I think the markets are big and diverse enough to punish bad decisions. If he makes good decisions, I think they’re big enough to reward it,” he said.

WEB3 and NFTs

But crypto may not be the only change to Twitter. Implementing a Web3 model and blockchain could fundamentally change how the social media platform is funded and how it combats disinformation.

“I think it’s really going to help Twitter become a platform for free speech, because right now speech is regulated by the intent of the advertiser,” Hoskinson said.

“If you have a direct relationship with your platform, then the blue ticks, you no longer have to rely on advertisers and you can actually focus more on adding value to the experience.”

Blockchain could become a valuable asset for Twitter as “it gives you a place to put all the ingredients of a better social network,” he added.

This, he explained, could mean using a decentralized identifier to start asking objective questions like “How true is this tweet?”

Crypto then allows the user or publisher to place a bounty on the statement. If the claim is then proven false, for example, the publisher may have to pay a fine or lose a bond.

“A lot of these struggles that we’re working through right now to give economic agency to information and create marketplaces for good information versus bad information and also change advertising models,” he said.

With the current advertising format, this means that the concern is not whether a publication is true, but whether there are enough impressions. Hoskinson said this is not a sustainable form of media, as there is not much truth.

“If we can create different economic models where you actually create marketplaces for truth, marketplaces for investigative journalism, marketplaces for alternative media, my belief is that it will be very transformative and it will change the media from the current form that they are in and people will have a much better time with it, he said.

The 2024 US presidential election

Another part of Web3 that will be important to social media and the Internet is NFTs, he added.

He explained that while deep celebrity spoofs can be humorous, they can be dangerous, especially during elections.

“We have a crisis. The 2024 US presidential election is likely to be the first election heavily influenced by deep fraud, Hoskinson said.

“[A deep fake of] Biden kills a child or something like that in a dark ritual and it looks convincing… It would be devastating to the integrity of an election”.

However, Hoskinson believes that Musk will use Twitter to his advantage during the next race for the White House.

“If you think about it geopolitically, it’s really not a platform on that scale [like Twitter] it is right-leaning in the US. Most of them are left-wing, he said.

For Republicans trying to regain power, “it’s a very, very nice move for someone in his position,” Hoskinson said, as much of Musk’s empire is built on government subsidies.

“So, by getting Twitter and creating a right-leaning platform, if he can cash in on the red tide and help the Republicans regain power, it’s very likely that he’s going to be rewarded with a boatload of government pork for SpaceX and Tesla and all kinds of things”.