The Web3 revolution may be closer than you thought. The social media market is changing quickly right now, and the leading new platform is a decentralized app running on open-source software, managed by a nonprofit community rather than a profit-seeking company.
Common complaints about today's social networks
The era of massive social networks won't last forever. Consumers are growing increasingly frustrated with the current batch of profit-focused social media services, where maximizing the platforms profits seems more important than providing a pleasant user experience. Here's a non-exhaustive list of common complaints:
- Network algorithms are designed to keep each user on the social media service as long as possible, interacting with ads and growing their engagement with the platform along the way. As a result, posts linking the reader to original sources somewhere else will be shown to fewer people.
- You probably won't see every post from your favorite content creators without jumping through digital hoops and learning how to find what you're looking for. The default content flow tends to be packed with advertising and posts promoted by the platform itself, with commercial or even political motives.
- The company behind your favorite social media service has probably asked your permission to sell access to your posts and comments for various reasons. Some could even peddle your personal information for the same reasons. And while they "ask" for your permission, the request is usually a part of the standard user agreement, so you can't use the service without contributing data to pinpointing ad sales and training artificial intelligence (AI) systems.
These are just some of the most common issues making people uncomfortable with today's leading social networks. It's bad news for industry giants such as Meta Platforms (NASDAQ: META) or TikTok owner ByteDance. Their networks are still growing, but the expansion has slowed recently and I expect a reversal into shrinking user counts in the next couple of years. There are so many reasons to close these apps and find a better social networking experience somewhere else.
Bluesky is a rising star
There are several newfangled alternatives available, but one option stands out as a skyrocketing growth story with deep roots in the Web3 community.
I'm not talking about relatively established players like Pavel Durov's Telegram or the more technical Mastodon network. These non-corporate social networks have built massive user groups over the last decade, but this moment belongs to a newer name.
Bluesky started as a research project at Twitter in 2019, breaking out as a separate (and non-affiliated) service in 2021. The platform had 13 million users in late October 2024, and 20 million users one month later. The user count stands at 24 million today. That's a serious jump in a really short time.
Have you checked out Bluesky yet? Image source: Getty Images.
Bluesky's approach to Web3 principles
I'm not here to promote the Bluesky service, but to point out how this social media platform's arrival may point to a sea change in the online experience of ordinary people.
Originally managed by then-Twitter leader and current Block (NYSE: SQ) CEO Jack Dorsey, the Bluesky project was always about open access to a user-friendly communication system. The underlying software is open-sourced and managed by a public benefit corporation. Its largest donor is crypto-oriented private capital firm Blockchain Capital, which also funded crypto-trading veteran Coinbase Global (NASDAQ: COIN) and crypto fund manager Bitwise.
You might expect a generous helping of blockchain-based tools with that funding background, but Bluesky's social media protocol doesn't use any cryptocurrencies or blockchain tokens so far. It's an evolving protocol and things might change over time.
So far, Bluesky remains a crypto-free Web3 platform. That's not a contradiction.
Is Bluesky a crypto-free Web3 platform?
Crypto tokens are indeed an important piece of the Web3 puzzle. Smart contracts and all-digital management of real-world monetary value are core tools of the Web3 vision, with leading roles played by the network-interaction powers of Polkadot (CRYPTO: DOT) and a plethora of supporting coins.
But those are just tools, not the desired end result. Bluesky's Authenticated Transfer Protocol (AT) supports Web3 ideas such as decentralized operation, a community-driven development process, and public-but-secure message transfers without leaning on blockchain networks. That's OK. AT still supports Web3 ideas, and its rising popularity could sound the starting bugle for a worldwide Web3 revolution.
One "killer app" can start a massive sea change. Simple spreadsheet apps brought personal computers into the workplace, followed by millions of homes. Basic web browsers like Lynx and Mosaic made the nascent internet accessible for consumers. Netflix (NASDAQ: NFLX) launched the video-streaming industry before it was cool. The Apple (NASDAQ: AAPL) iPhone rewrote the playbook for mobile phone services.
Bluesky could light a fire under Web3 investments
Bluesky might stall out before having a game-changing effect on the social media market, but it is certainly off to a good start. Its open-source code makes it easy -- and perfectly acceptable -- to build new apps adding more functionality to the AT protocol and the Bluesky experience. That's where core Web3 ingredients such as Polkadot's network-crossing mechanisms and Block's crypto-based payments would spring into action.
The first spreadsheets and web browsers didn't disrupt their industries all alone, and neither will Bluesky. But its soaring user engagement could very well give the Web3 vision the adrenaline shot it needed.
In other words, Bluesky's success could light a lasting fire under Web3 investments like Polkadot and Block. If nothing else, these Web3 pioneers deserve a closer look right now.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Coinbase Global, Netflix, and Polkadot. The Motley Fool has positions in and recommends Apple, Block, Coinbase Global, Meta Platforms, and Netflix. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
