Blockchains Alone Won’t Fix the Facebook Problem

Michael J. Casey is chairman of CoinDesk’s advisory board and a senior advisor of blockchain research at MIT’s Digital Currency Initiative.

casey, token economy

casey, token economy

Even before the questions began, one early image from Mark Zuckerberg’s Congressional appearance confirmed that the hearing would focus on all the wrong things.

The crush of photographers clamoring for a shot of the Facebook CEO was a reminder that Congressmen would frame their inquiry into the social media platform’s use and abuse of its users’ data around the man himself. We have been hurt, goddam it! We must find the villain and make an example of him.

I do not wish to position myself as a defender of Zuckerberg here. I think he is responsible for building a truly odious machine, a black-box algorithm that deliberately steered human beings, lemming-like, into echo chambers of like-mindedness.

The platform he oversaw has killed inquisitiveness and open-mindedness, promoted form over substance, undermined the journalistic pursuit of facts and damaged our democracy – all in the interest of gathering and organizing our data so that we could be sold off as packages to platform advertisers.

My point is simply that, if not Zuck, someone else would have made a business out of user data in the same way. And unless we fix the underlying problem, someone else will do it.

What’s more, in calling for the CEO to take certain actions, politicians could do more harm to the core tenets of an open, democratic society, particularly their demands that Facebook up its censorship of hate speech and disinformation.

Zuck as data-lord is bad enough. Zuck as censor-in-chief is downright scary.

We need to tackle the root structural problem of the social media industry: the centralization of control over data and content and the reason why the internet economy has insidiously fostered it.

Here, the decentralizing ideas and trust-minimization principles that underpin blockchain technology offer glimpses of a path forward.

Blockchain’s potential, and limits

At CoinDesk and elsewhere, I’ve posited before that blockchain and token technologies could help with massive challenges like “fake news,” the exploitation of user data and a rearrangement of Facebook’s business model to better reward users. Others have pointed to self-sovereign identity as the killer app to solve the Facebook problem.

And it’s not just talk. The tokenized, decentralized social media feed Steemit has been up and running for two years and a variety of decentralized journalism projects are now being launched on the ethereum-based Civil platform.

Their idealized vision is that of ownerless content platforms based on fully open-source software models. They seek to put users in control of their data, reward content providers based on fair, objective metrics of audience engagement and community priorities, and apply reputation tokens or other skin-in-the-game staking mechanisms to foster greater accountability and honesty in information production and distribution.

But let’s be clear: blockchain-based models are nowhere near ready to subvert the entrenched social media industry.

Any truly decentralized blockchain won’t have the on-chain capacity to handle the masses of data and billions of posts that any large-scale system would run.  What’s more, on its own, the technology won’t protect us from many of the maladies of the current scenario.

One limitation can be seen with the upvoting model in Steemit, which rewards top voted stories with steem tokens and which invariably results in posts about Steemit itself rising to the top of the trending ranks.

The model, intended as a decentralized, censorship-free way to distribute funds for popular content while allowing advertisers a way to buy more favorable positions in the feed, appears to have created another self-reinforcing echo chamber. It’s not composed of Trump voters or Trump haters but of steem HODLers.

Moreover, as a number of critics of blockchain-for-social media point out, the technology on its own won’t protect the privacy of user data.

Once users place it in an open platform, any outside party can mine their data and do what they want with it. Even if user names are anonymized, artificial intelligence and network graph tools make it easy to uncover real-life identities.

Yet, as with much criticism of blockchain proposals, these objections make the flawed assumption that the technology is static, that innovative ideas aren’t being put to work on solutions, when there’s clearly a massive hive mind of invention underway.

It’s not unreasonable to conclude, for example, that something like a Lightning or Raiden Network will one day resolve scaling challenges, not only for transactions in currencies but also for transactions in data and content.

Meanwhile, projects such as, which uses ranking algorithms and reputation-based incentives to give intelligent weighted values to “likes,” “upvotes,” “downvotes,” are working on sophisticated community-led curation systems to deliver the broader content needs of a general user base.

Indeed, Steemit itself is working on solutions to encourage a more realistic, broader array of stories that are less about steem token navel-gazing and more about, well, life.

As for privacy, sophisticated multiparty computation and zero-knowledge proofs potentially offer an answer.

That’s what the founders of high-tech encryption provider Enigma argued in a recent blog post, entitled “Why Blockchain Alone Can’t Fix Facebook.” They proposed the development of “a complete privacy protocol,” a layered structure that includes both blockchain technology and “secure computation” to keep people’s private information obscured even as the system assures the accuracy of data transactions and currency transfers.

The core problem

Quite apart from these practical considerations, however, much of the debate over decentralized social media solutions misses the core point: the need for business models that are relevant to an online economy in which data is the central currency.

Blindly believing we were getting services for free, we’ve been “paying” the biggest internet companies for years, handing over troves of valuable data and then losing control over it as it disappears out of sight and is transformed by the platforms’ secret, proprietary algorithms.

Until now, the problem has been that, without a consensus mechanism to keep an accurate record of all the “transactions” in this new currency and thus to resolve our inherent mistrust of each other, we’ve been unable to install a decentralized, peer-to-peer economy around the valuation of that data.

That has left us dependent on the big data aggregators as trust intermediaries, allowing them to build that economy in their interests. (Quite apart from their public profile as social media, search or e-commerce companies, the Facebooks, Googles and Amazons of this world are in the business of data aggregation, valuation and repackaging.)

The first step in reducing the power of these internet behemoths, then, must be to use the kind of decentralized trust models that blockchains enable to make their data aggregation monopolies redundant.

Yes, centralization is more efficient than decentralization and, yes, economies of scale tend to foster monopolies in capitalist economies. But if communities of internet users have less need for centralized trust intermediaries, they can start extracting value from peer-to-peer exchanges of data.

That in turn opens the door to new enterprises to compete for those users’ business by offering useful services that let people build meaningful and fulfilling lives online while retaining control of their data.

If we want to solve the Facebook problem, merely pointing blame at a millennial tech mogul isn’t enough. We must build a new online architecture that contends with the fundamental problem of human mistrust in the digital age.

Facebook headquarters image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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