Twitter, Facebook face competition from blockchain-based social media platforms

Bluesky, a decentralized communication app, is providing new competition to Elon Musk’s Twitter. The app, which is backed by Twitter co-founder and two-time former CEO Jack Dorsey, is an alternative to centralized social media platforms.

Unlike Twitter and Facebook, decentralized social media platforms have no single owner or manager and are not dependent on commercial or financial interests. Decentralized projects are less likely to collect and sell users’ data and less susceptible to censorship.

Bluesky has gained popularity in recent months, with 628,000 mobile downloads in April, a 606% increase from the previous month. However, Bluesky is still far behind Twitter in total download volume.

Bluesky’s rise highlights how Dorsey is looking to disrupt what he helped create. In 2019, Bluesky was initially incubated at Twitter when Dorsey was still CEO.

The app runs on a decentralized network technology called the AT protocol, which could power future social apps, allowing people to maintain their identity across multiple apps. Other decentralized social projects that have gained more attention include Mastodon, as well as Lens and Farcaster, both of which are Twitter replacements built on blockchains.

Decentralized platforms lack the algorithms that recommend particular content. They also don’t sell ads or collect and sell user data, which are the traditional ways social networks make money. The only downside, however, is scale, with Bluesky only having around 50,000 users and unclear financial plans.

Currently invite-only, Bluesky may turn to subscriptions to monetize its operations. But the front-end apps built on top of these decentralized platforms are often clunky, don’t look professional, or are easy to use. The team hasn’t given many hints about any financial plans, according to recent blog posts. The user experience is also another drawback, with the platform still being tested and developed.

The rise of decentralized social media platforms provides an opportunity for people to be citizens of their platforms, with the ability to vote.

Facebook whistleblower Frances Haugen said it’s all about self-governance. “We have kind of accepted that we are subjects of a king, like Mark [Zuckerberg]or Elon [Musk]and we can either follow their rules or leave,” Haugen said.

“And it’s an interesting opportunity for people to be citizens of their platforms, to have an ability to vote, but also to have…”