Blockchain Social Media Eliminates Centralized Control and Brings Benefits

Two women leaning on a large letter 'S' surrounded with Bitcoin and social media icons

Blockchain’s transparent and efficient mechanisms have revolutionized law, finance, healthcare, logistics and many other spheres. It’s now set to take over the social media industry. By solving current problems and presenting diverse opportunities, blockchain is ushering in a digital revolution.

Social media is evolving, and so is the technology that enables it. What was once primarily used to connect with people has morphed into a platform for sharing opinions, marketing businesses, launching campaigns, and offering new and creative career opportunities.

Undoubtedly, the widespread adoption and rapid growth of social media have led to hiccups – digital piracy, data breaches, and identity frauds, to name a few.

But at the same time, experts have begun work on an answer to the problem by integrating blockchain technology with traditional social media networks. As a result, individuals and businesses have been helped to come up with striking innovations.

Social networks: the current landscape

Of the 4.66 billion active internet users worldwide, close to 4.2 billion users leverage social media, according to data from January 2021. Social media is undeniably the pivot of the internet, having a tremendous impact on our daily lives.

According to the Social Media Global Market Report 2021, the social media market is expected to grow from $102.62 billion in 2021 to $308.96 billion in 2025, exhibiting a 32% growth.

Factors that have been fueling the growth of the social media market include:

  • Increased internet and smartphone penetration
  • Availability of structured user analytics for business marketing
  • Increasing adoption of eCommerce and online shopping
  • More engaging content on social media platforms
  • Investments in AI, big data, and real-time analytics technology
  • Easy access to cloud computing solutions for individuals through SaaS

Research suggests that North America is becoming the new hotspot in the social media analytics market. This is attributed to its consistent investment in technologies like big data and real-time analytics.

To date, Facebook, Youtube, Instagram, Twitter, and LinkedIn have dominated the social media market. The revenue model of these applications is either advertising (targeted promotions) or subscriptions. Additionally, some applications like Facebook and Instagram allow in-app shopping or eCommerce.

To provide users with “personalized feeds” and the right set of targeted ads, these platforms continually track users’ activities, as well as collect data to analyze it. The social media networks that store all users’ information in a single central server are known as “centralized social networks.”

Social networks current issues

A hacker in a mask holding a wrench and pointing to an open social media page on a laptop

Though centralized social media networks are seeing exponential growth in popularity, it’s becoming ever harder to ignore the concerns raised about these platforms, as outlined below:

Data security in social networks

Data has become the life-blood of social media networks. Centralized social media networks (such as Facebook, Youtube, and Snapchat) track the activities, location, contacts, likes, dislikes and preferences of their users.

They store this data and analyze it for marketing purposes. Possessing such sensitive information places almost unimaginable power in the hands of a single company. In most cases, companies sell or exploit the data to tailor targeted ads, thereby treating their customers as money-minting products.

The social media giant Facebook provides a classic example of the risks after downplaying a data security breach of close to 533 million users in April 2021.

Algorithmically curated feeds can increase bias

78% of active social media users easily trust the information they read online. At times, the information presented can be biased or polarized, depending on the user’s previous activities and preferences.

Constantly seeing content they find reassuring can prompt users to act highly decisively. Moreover, if an influential personality or brand promotes such information, a societal domino effect can be seen as a result.

Centralized services are easier to hack

Lastly, centralized social networks are always easier to penetrate. User privacy is a pressing concern for any of us who use centralized social networks like Facebook, Twitter, Instagram, and Snapchat. Their policies allow them to access and extract data of individual users, and to store it in a central server, thereby heightening the risk and consequences of a data breach.

One such case happened in July 2020 when the Twitter accounts of influential people got hacked in a crypto-related scam. Hackers targeted prominent high-profile Twitter accounts, including those of Bill Gates, Elon Musk, Kanye West, Warren Buffett, Mike Bloomberg, Joe Biden, Kim Kardashian, and Wiz Khalifa.

Undoubtedly, social networks have transformed the way we communicate.  However, they also maintain complete control over the user’s personal information. Users have close to no control over who sees, distributes, or uses their personal data. This situation increases the risk of fraud through data breaches, identity theft, copyright issues, and other means.

The basics of blockchain social media

A woman floating in the clouds using her phone to access social media interconnected with cords

To combat the concerns related to centralized social media, developers have attempted to decentralize it by integrating blockchain technology. Let’s dive into the details of this exciting innovation.

What is blockchain social media?

Blockchain technology, based on a distributed ledger system, is decentralized to its very core. In blockchain social media, all user activities get irreversibly stored in a decentralized blockchain network, encrypted from end to end. This network of servers comprises the devices of every single social media user on the blockchain. Therefore, the greater the number of users, the higher the data-holding capacity of the network.

Decentralized social media: how does it work?

All blockchain social media networks fall under the decentralized social media category. Unlike centralized social media, where companies store data in a central server, a decentralized social network uses a distributed ledger system to store the data.

No proprietary or central authority holds any data in this system. Data gets homogeneously stored across each node of the network. Therefore, users benefit from freedom of speech as well as better privacy and control over their information.

Several decentralized social networks can form a fediverse – a collection of interconnected servers used for social networking and online activities such as web publishing or blogging. Federated networks allow users to engage across platforms. Examples of decentralized networks include Mastodon and Steemit.

Open-source social media: what are they?

Open-source social media, an extension of decentralized social media networks that use P2P or blockchain technologies, allows users to self-host without infringing freedom of speech or privacy. Open source platforms allow users to understand how the social media algorithm works. They also allow control over the algorithm and its feed.

One such open-source, privacy-focused alternative to Twitter, Mastodon, has recently gained wide popularity. It is among the most successful federated sites, with users able to add content warnings and choose the audience for their posts.

Users do not have to log into a central website like Facebook or Twitter. Instead, they join ‘instances’. Users can choose to keep their instances public or private, and can also self-host them. Mastodon is a great example here. It’s easy to use and cares deeply about its participants’ safety and privacy: unsurprisingly, it has attracted a large number of Twitter users.

How does blockchain transform social media?

Broadly speaking, blockchain addresses two essential shortcomings of the centralized social media network – transparency and data security. Blockchain’s peer-to-peer architecture helps users maintain higher accountability for their activities over the internet. Users cannot access information stored in the decentralized space without proper authorization. This means identity theft or data breaches are almost impossible over a blockchain social media system.

Moreover, decentralized networks can also address fake content, spambots, and fraudulent ad impressions. This is why blockchain challenges the traditional social media networks to restructure their data policy, content sharing algorithms, user authentication systems, and payment methods. Some common examples of blockchain social media include Steemit, Diaspora, SocialX,, Earn, and Minds.

Benefits for social media business owners

By simply endorsing blockchain and cryptocurrencies and publicly announcing their support of the uprising technology, companies can increase revenues. The hype surrounding decentralized solutions, DeFi, and NFTs strongly impacts the investors’ and the users’ perception.

Social media owners usually gain profits from showing advertisements to their users. They collect information about them to create targeted ads and may also sell this information to third-party service providers. The information is often collected from disparate sources, while blockchain technology can allow to build client profiles and incentivize users to share their information. This means accurate data for targeted advertising.

The major driving force for increased revenues in blockchain social media are tokenized economies. Aside from holding monetary value and allowing users to pay for services, tokens can create much more monetization channels.

Blockchain social networks powered by cryptocurrency tokens create a system where users are rewarded for their contributions. It maximizes engagement and increases the value of the token itself, empowering the platform’s economy and putting more money in the pockets of business owners. New revenue streams can be created from embedding the token with additional functionality and perks like providing access to exclusive content.

Everything you need to know about blockchain security is right here

Blockchain social media: pros

Blockchain social media offers a cogent solution, dealing with the full spectrum of worries related to centralized social media. Now we’ll look at the key benefits of adopting blockchain in social media networks:

Protection from user commodification

Owing to the absence of a third-party central authority or company, it becomes impossible to collect and use personal information without consent. End-to-end encryption through private and public keys for transactions ensures that data is accessible only to the parties involved. All data gets stored in separate blocks as unique immutable hash (code), which rules out any possibility of a data breach, identity theft, and user commodification.

Freedom from censorship

At present, the tech giants control the flow of content on social media, dampening freedom of speech and expression among the users. Decentralized social networks offer a censor-free platform, reinstating this precious freedom. Users can freely share their opinions with a chosen audience without fear of any blocking, detention, or personal risk.

Enhanced control and security

Blockchain and open source social networks allow users to access and control the algorithms behind features and functionality. Specific information can be sourced by modifying the algorithm or self-hosting on any platform. The same methods will allow users to reach a targeted audience.

Users can control feeds without letting a third party decide for them. Also, all their data gets stored in a decentralized network of servers. No one can access such data without authentication. This ensures the highest standards of safety for the sensitive information of every user.

Boost to social commerce

Blockchain social media can swiftly begin to nurture a fruitful environment for social commerce. Rewarding the content creators becomes easy with the native cryptocurrency. Also, websites can reward creators in the form of cashback. This move can boost the earnings of small-scale proprietors in the years to come.

Opportunity for crowdfunding

With improved and targeted controls, users can undertake crowdfunding campaigns using tokens. Blockchain social networks also allow peer-to-peer fund transactions. Users will have confidence in using these platforms for payments and transfers, given the high level of security offered.

Blockchain-powered crowdfunding is known to be very successful, with multiple ICOs, STOs, and token distribution through liquidity mining generating millions of dollars. Investors often receive special privileges for contributing their funds like an ability to take part in governance or gain proceeds from every transaction made by users.

Check out KickICO – the leading blockchain crowdfunding platform that has raised over $500M to date

Blockchain social media: cons

Despite these benefits and opportunities, the blockchain social network also entails some shortcomings described below.

Presence of innumerable bots

Bots are a common source of trouble in both centralized and decentralized social media networks. In a blockchain social network, bots can alter the reward system. They can be used to maliciously extract rewards and value from the platform.

Environmental consequences of mining

Running hashing (coding) algorithms on the blockchain requires high computing power. This process is called mining. Mining requires specialized hardware that becomes obsolete in around 18 months. Apart from e-waste, mining also requires extensive power consumption. Therefore, the long-term use of blockchain social networks could prove ecologically harmful.

However, developers are busy working towards more energy-efficient alternatives.  Examples include Cardano and Polkadot blockchain platforms. These are highly scalable and far more efficient compared to the mainstream networks like Bitcoin and Ethereum.

Low scalability

Blockchain social media falls short when it comes to scalability. At any given moment the infrastructure might be unable to keep hold of billions of profiles. Users would quickly doubt the reliability of the platform, leading to mass dissatisfaction.

In addition, the decision to invest in blockchain social media is a significant one for any organization. If the scalability is low, no organization will dare to invest, and the platform will have to bear the losses. However, it’s expected that this problem will be solved by next-generation blockchains.

Complexities of adopting new technology

Users of blockchain social media need thorough knowledge and practical training to understand and use the technology. In contrast, the traditional centralized social media networks have now gained widespread adoption and present a user-friendly interface.

The complexity of blockchain technology might pose a serious barrier to the adoption of blockchain social media networks. Nonetheless, companies can turn to blockchain professionals who have been honing their skills for years and are ready to simplify blockchain for new adopters.

Undoubtedly, new technology brings new hurdles. Blockchain social media promises to solve most of the issues related to the traditional centralized social media networks. But if it is misused, its own set of shortcomings becomes apparent. For instance, by taking advantage of the freedom offered, users may post inaccurate or offensive information which will remain on the blockchain network forever.

New opportunities behind blockchain social media

A money tree filled with coins and cash is being fertilized with social media icons

The blockchain social network has opened up endless opportunities. Currently, most of the decentralized social networking applications are just analogs of  social media sites that already exist. However, decentralized platforms such as Ethereum now encourage ideas for unique and targeted social networking applications.

Blockchain social media promotes a reward-based business model where creators earn the native currency for uploading engaging content. For example, Indorse is a Linkedin-like decentralized application that rewards users for their professional abilities after verifying their skills. These applications employ an internal rewards system, using tokens to incentivize participants to actively post content on the application and endorse other users’ content.

Applications raise money by selling tokens on the crypto exchange through security token offerings and liquidity farming. Some applications also sell ad spaces to advertisers who purchase these tokens.

How to build a social network on blockchain

You can build social networks on the blockchain using blockchain protocols like Ethereum, Flow, Hyperledger, and so on. In broad terms, there are three approaches to developing a social network on the blockchain:

Developing blockchain social media from scratch

If you wish to build a unique decentralized social network, you should use this approach. It takes a lot of time, money, and effort, but it will help you stand out among the competitors. You can get creative with the platform’s features, UI designs, and user capabilities. Also, you will obtain complete control and ownership of the final product.

Using an existing blockchain platform

Numerous platforms like Ethereum, Ripple, Sola, and EON allow you to develop decentralized applications or smart contracts directly. They will save you a lot of time as well as development costs, but the functionality and features of the final product may be restricted. Also, you’ll need in-depth knowledge about the specific blockchain that you are building on top of. This approach allows you to integrate the created social network within the platform’s ecosystem and give your users access to a plethora of third-party applications.

Using a blockchain social media app builder

White label and clones will offer you readymade social networks within just a couple of days, starting from $100. You should use this option only when the final product has little or no competition and you don’t plan to introduce unique features. It is the quickest solution, at a minimal cost. Also, it does not require any programming knowledge. On the other hand, this approach might land you with some copyright-related issues.

A basic blockchain social networking solution can cost you several thousand dollars. At the same time, a complete solution with complex features and unique app designs can crawl up to hundreds of thousands of dollars.

Bear in mind that a complete solution is much more competitively advantageous, as it is custom built to suit your requirements. This is why the complete solution could turn out more reliable than anything ‘prefabricated’.

Essential features of decentralized social networks

Decentralized social media networks are a means to prevent the consolidation of power in the hands of a few centralized social network companies. Let’s take a look at some key features of these networks.

Data controls and content management

There is no central authority that collects and stores data in the case of a decentralized network. Users independently establish their own rules for the content that they generate. They are responsible for the use, transfer, and monetization of their content. What’s more, the blockchain authentication process makes data leaks almost impossible. This means decentralized networks offer maximum confidentiality.

Independent self-managed profiles

Unlike Facebook and Twitter, where algorithms are controlled by third-party companies, decentralized networks offer control to the users. Federated networks foster independence without a governing authority: users enjoy control over algorithms and, therefore, all the user-generated content. They can even decide on the target audience for their content.

Censorship shield and democratized governance

Users are opposed to censorship of sensitive topics on social media. Censorship stifles freedom of speech and expression. Therefore, users demand that there should be no intrusion by third-party companies, especially in the content they create themselves.

We’re all aware by now of the examples of account detentions and deplatforming among centralized social networks. In contrast, decentralized networks offer users independence, with the ability to set their own rules for censorship and governance.

Content originality and authenticity checkers

Decentralized social networks use distributed consensus technologies (DCT) to ensure that the content is original and trustworthy. While fake news and unauthorized cloning of content is a common phenomenon in centralized social media, a decentralized network uses technology to verify authenticity. Also, it is almost impossible to manipulate or modify content after sharing it on the decentralized network.

User reward systems

Centralized social networks reward only popular content creators and celebrities. In contrast, decentralized social networks have a reward system that monetizes users for every single like, view, share, or vote. This system aims to encourage small proprietors by helping them profit from digital content. Active users generally receive four different types of rewards – content rewards, curation rewards, attention rewards, and stake rewards.

Interoperability and flexibility

All decentralized social networks are curated to be universally accessible and flexible. The infrastructure is built in a way that supports a range of assets and blockchain platforms. Every network has an internal currency for rewards and tokens. The interoperability creates a standard for the across-the-board governance and comparison of the application and smart contracts.

Examples of decentralized social networks

A woman standing on a block and pointing to the LinkedIn social app on a phone

Blockchain social media startups are already up and running. Now that we’ve reviewed the key features of a decentralized social network, let’s look at some examples in action.

Sapien news network

Sapien is an Ethereum blockchain-based decentralized news network. Sapien network uses the ‘SPN Crypto Token’ and provides the following features:

  • Public and private news browsing
  • Subscription-based model for areas of interest
  • Customized news feed as per user’s preference
  • Chat facility with end-to-end encryption.

Steemit social media with reward system

Steemit is an incentive-based, peer-to-peer social media network. The network monetizes and rewards content publishers with cryptos. They follow a points-based system, with points earned for:

  • Publishing, voting and curating content
  • Purchasing STEEM tokens for Bitcoin or Ethereum in crypto exchanges
  • Powering up the crypto social network

This crypto social media network deploys a user-verification process before letting users register themselves.

Indorse social network for business

Indorse is a Linkedin-like Ethereum-based social media network that rewards users who endorse and prove their skills on the platform. It uses a decentralized verification process to corroborate the skills. IND tokens form the incentive for activities on the network.

Indorse also adheres to protocols like InterPlanetary File System (IPFS), BigchainDB, and more. Advertisers purchase space for their ads using IND Tokens (bought through an exchange). Indorse shares a proportion of these IND tokens with the members who create content.

Sola social network for creators

Unlike other decentralized social networks, Sola uses a combination of blockchain and artificial intelligence to make users’ content go viral. The revenue model of Sola includes ads, user payments, and partnerships, which they share with the users. It uses the SOL crypto token.

This social network has iOS and Android mobile applications, alongside its web application. They have also released an API, which developers can use to build their applications around Sola.

Vevue video sharing platform

Vevue is a blockchain-powered social platform that rewards users for their authentic creativity. They use VUE tokens to reward users who participate and who curate engaging content. Vevue differentiates itself from the traditional social media applications that are overflowing with repetitive or fake content. It uses the transparency and accessibility of blockchain technology to define the future of social media where every user gets paid for creating new and authentic videos.

These blockchain-powered decentralized applications are laying the foundations for the future evolution of the new and improved social media landscape. Interestingly, Twitter has started working towards the launch of its own decentralized web ecosystem called Bluesky.

Still have some questions about blockchain and its implementation? Reach out to our blockchain consultants!


Decentralized blockchain-backed social media networks are offering welcome relief from many data-related anxieties of traditional social networks. Users gain full control of their content and are rewarded monetarily in order to encourage engagement and participation.

Ultimately, this leads to more engaging content, highly personalized feeds, and targeted advertisements which make the social platform more valuable and lucrative. Blockchain-powered social media offers a diverse variety of monetization tools and allows to create more revenue-generating channels.

Users make contributions, promote and monetize their content through tokens, and receive rewards for their contributions. This drives the social network’s tokenized economy, making more money for business owners. In addition, crowdfunding campaigns open up the doors for high-end investors and also provide an easy income.

Looking to revolutionize the market with a brand new blockchain social network? Partnering with an experienced software developer is the best way to go. You can confidently delegate the technical challenges to our seasoned blockchain development team. We are fully equipped to bring out a customized solution that benefits not only your business but also your future users.


Alex Zakharenkov


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