Elon Musk has made no secret of the big role he sees for cryptocurrency in his newly acquired social media company Twitter.
Binance CEO Changpeng “CZ” Zhao’s has decided to invest $500 million (€496 million) into Twitter, while Dogecoin – the “crypto of the people,” according to Musk, who has staunchly supported it – has surged since Musk’s takeover.
While other social media companies have tried and failed to use cryptos or implement wallets (most famously Facebook and its Libra coin), Twitter could be successful, according to the founder of the public blockchain platform Cardano, Charles Hoskinson.
“Now, it is an interesting thing to blend a social network with a financial stack,” he told Euronews Next at Web Summit in Lisbon.
“Twitter is uniquely well-suited to do this. And a crypto component is something that Musk has been talking about since the dotcom days, way back in the late nineties”.
No strategy for using crypto or any crypto wallet has been unveiled yet; for the moment Musk has put his attention on charging for the blue tick verification mark and also firing staff.
“It’s early days and what he’s probably going to do is come in and gut the company, fire half the people, move it to Austin, put very strong leadership that he trusts and then pull out and let them kind of run it and then focus a lot more on merging of those two worlds; the social network side and the fintech stack,” said Hoskinson.
“It remains to be seen if he’s going to verticalize it and do it all himself or if he’s going to do it with partners”.
While the SpaceX and Tesla boss has heavily outlined his preference for Dogecoin, Hoskinson said he was “always available” to consult with Musk, and said a partnership with a particular cryptocurrency or exchange company would not only benefit Musk’s chosen companies but the crypto sector as a whole.
“The rising tide of being an on-ramp is a very powerful thing and they may have primary value from being rising tides, but the secondary value is enough for all of us,” he said, adding that people who buy crypto usually do not just hold one token as they own a little of everything including Bitcoin, Ether or Cardano’s token ADA.
“If competition is king and so if he makes poor decisions, I think the markets are large and diverse enough to punish poor decisions. If he makes good decisions, I think they’re large enough to reward it,” he said.
WEB3 and NFTs
But crypto might not be the only change to Twitter. Implementing a Web3 model and blockchain could fundamentally change how the social media platform is funded and how it fights disinformation.
“I think it’s going to really help Twitter become a free speech platform because right now, speech is regulated by advertiser intent,” Hoskinson said.
“If you have a direct relationship with your platform, so the blue checkmarks, then you no longer have to rely on advertisers and so you can actually focus more on adding value to the experience”.
Blockchain could become a valuable asset to Twitter as “it gives you a place to put all the ingredients of a better social network,” he added.
This, he explained, could mean using a decentralised identifier to start asking objective questions such as “How true is this tweet?”
Crypto allows the user or publisher to then put a bounty on the statement. If the statement is then proven false, for instance, the publisher may have to pay a fine or lose a bond.
“A lot of these struggles that we’re working through right now of giving economic agency to information and creating marketplaces for good information versus bad information and also changing advertising models as well,” he said.
With the current format of advertising, it means the preoccupation is not if a publication is true but on if there are enough views. Hoskinson said this is not a sustainable form of media as there is not much truth.
“If we can create different economic models where you actually create marketplaces for veracity, marketplaces for investigative journalism, marketplaces for alternative media, my belief is it’ll be very transformational and it will change the media from the current form that it’s in and people will have a much better time with it,” he said.
2024 US presidential election
Another part of Web3 which will be important to social media and the Internet is NFTs, he added.
He explained that while deep fakes of celebrities can be humorous, they can be dangerous, especially during elections.
“We have a crisis. The 2024 presidential election in the United States will likely be the first election, heavily influenced by deep fakes,” Hoskinson said.
“[A deep fake of] Biden killing a child or something like that in a dark ritual and it looks convincing… That would be devastating for the integrity of an election”.
However, Hoskinson believes that Musk will use Twitter for his own benefit during the next battle for the White House.
“If you think about it geopolitically, there really isn’t a platform at that scale [like Twitter] that’s right-leaning in the United States. Most of them are left-leaning,” he said.
For the Republicans who are trying to regain power, “that’s a very, very nice move for somebody in his position,” Hoskinson said, as a large part of Musk’s empire is built on government subsidies.
“So, by acquiring Twitter and making a right-leaning platform, if he can serve a part in the red wave and helping the Republicans regain power, it’s very likely he’s going to be rewarded with a boatload of government pork for SpaceX and Tesla and all kinds of things”.