Elon Musk, Twitter, Dogecoin, Bluesky, and the Decentralized Social Media Race

By Daniel Roberts

Elon actually did it. The gleeful jester king of Crypto Twitter—whose tweets about Dogecoin have repeatedly moved the price, whose July 2018 "pedo guy" tweet about a British cave diver landed him in court for defamation (he won), whose August 2018 "funding secured" tweet led to securities fraud charges from the SEC ($20 million fine)—now owns Twitter Inc.

When this story began six months ago (!) with Musk's original $44 billion offer, I wrote, "Musk probably won't get to buy Twitter. But crypto advocates should be cheering him on if they want to see Twitter ever really embrace crypto tools." I was wrong on the first count; the second is still unanswered, but is heating up fast.

Musk originally said, both publicly and in private (since-leaked) text messages, that he aimed to put Twitter on-chain and make it open-source, accept Dogecoin for payments for Twitter services, and go after crypto spam bots.

But then, in texts with a representative for FTX CEO Sam Bankman-Fried, Musk wrote, "Blockchain Twitter isn’t possible. The bandwidth and latency requirements cannot be supported by a peer to peer network, unless those ‘peers’ are absolutely gigantic, thus defeating the purpose of a decentralized network."

And yet! Binance, the biggest crypto exchange in the world, backed Musk's final buy to the tune of $500 million, and is "creating an internal team to focus on ways that blockchain and crypto could be helpful to Twitter," the company told Decrypt on Friday. Binance believes it has Musk's ear. If that isn't enough of a crypto influence, Andreessen Horowitz is also involved.

Regardless of your opinion of Musk, anyone who believes in the future viability of crypto and blockchain solutions and would like to see more mass adoption should be excited to see what happens next.

Twitter users who are loudly railing against his ownership and threatening to leave will mostly not leave. The irony is that if they do, many of their other options also now have a crypto connection.

Facebook is so committed to the metaverse it renamed its company Meta, and even after its metaverse division Reality Labs lost $3.6 billion in Q3, sending the stock plummeting more than 25%, it must double down on the strategy. It is unclear how much Meta's metaverse will utilize crypto and blockchain, but recall that the company already tried to create its own cryptocurrency once before.

Jack Dorsey, a confidante of Musk who might counsel him on what to do at Twitter, departed Twitter to focus on Block, formerly Square, which, like Facebook, was so intent on publicly proving its commitment to a new area of tech that it changed its corporate name. But Dorsey's separate "decentralized social media" effort Bluesky—birthed inside Twitter and now independent—just launched a web site for its AT Protocol (it stands for Authenticated Transport) and opened the waitlist for its Bluesky app, which the team frames as a "browser" for accessing the AT Protocol.

Bluesky is pursuing Dorsey's vision of Twitter as a protocol—just don't call it blockchain (or Web3, since Dorsey doesn't believe in that).

Discord backed away from crypto wallet integration due to outrage from gamers, but remains the most popular home for DAOs, the crypto organizations that run on community voting.

Mastodon, a "decentralized social media platform" launched in 2016 that uses a network of open-source servers, gained 30,000 new signups on the day Musk bought Twitter. Aave, the original DeFi lender, launched in February its Lens Protocol, a "Web3, smart contracts-based social graph."

Even Kanye West is in the mix with Parler, the right-wing social media app he is buying. Parler launched an NFT marketplace in March called DeepRedSky that debuted with a Trump NFT collection. Kanye himself has praised Bitcoin and was recently spotted wearing a Satoshi Nakamoto cap.

Even though some of these apps I've listed would say they have nothing to do with crypto, it's striking that so many social media platforms are looking at decentralization, the utopian rallying cry of the crypto industry, to improve their UX or foster free speech. I see it as yet another mainstream indication of adoption—much like the moves BlackRock, Google, and BNY Mellon made this month—that critics are missing while they point at the depressed prices of the coins.

I first wrote about Bitcoin in 2011, and what excited me most back then was the possibility of using crypto to pay for a paywalled news article, without the friction of entering your credit card info and subscribing for a whole year. In a similar vein: What if the "killer app" for crypto and blockchain ends up being a better social media town square?

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