The social media market is actively moving towards Web3. Traditional Web2 giants like Google and Microsoft are investing heavily in artificial intelligence and blockchain technology, creating ground-breaking services like ChatGPT. Facebook has shown its willingness to transform into Web3 by changing its brand name to “Meta”, while Starbucks has announced its upcoming launch of Web3 app “Odyssey”.
2023 SNS Market Trends
Saturated social media market
The social media market, though has shown rapid growth for last few years, now become oversaturated. Many socialmedia services that once boomed in the COVID-19 environment must offer new and diverse strategies to attract and retain customers.
Social media giants includeFacebook, YouTube, Instagram, and TikTok. Snapchat and Twitter users also continue to occupy the market steadily. Each service has been positioning itself based on various concepts, such as the presence of photos, videos, messenger functions, and average content consumption time.
However, the number of users on Meta has started to decline while the consumption time of YouTube content and the number of Netflix paid subscribers have decreased. As a result, companies operating SNS services are exploring various strategies to survive in the market.
As generations change, people’s expectations on social media also change.
The age group that primarily uses social media is generally people from their teens to mid-40s. According to the “2020 Internet Usage Survey” conducted by the Korean Consumer Panel, 10s make up 26.3%, 20s make up 33.9%, and 30s make up 22.3% of social media users.
In order for social businesses to succeed, the following factors have become important as the main consumer generation has changed.
Pain Points and Improvements for SNS Users
Cybercrime through hacking of SNS accounts and tracking of personal information remains a significant issue for users. Services like social media handles a lot of personal information, making the data security crucial.
Provision of Transaction Services
Successful SNS platforms are used not only as social platforms but also as advertising and transaction platforms. Facebook displays advertising content, and Instagram is used by businesses and individuals to operate online shops. As a result, users are inundated with numerous ads and products exposures every day.
Communication and Interaction
Community-building is an essential component of successful social businesses. Services can no longer succeed in one-way model; they must build loyal customers by building and retaining their community. It is essential to create both communal and personal spaces where users can interact with each other, moving away from the era when customers expressed their dissatisfaction via telephone connections with customer service representatives.
P2E (Play To Earn) System
When smartphones with slide lock screens were first released, an app called “Cash Slide” became popular followed by numerous similar app development. By inserting ads into the lock screen that users inevitably need to unlock, points were accumulated every time they unlocked their phone, which could then be used to buy food at convenience stores. MZ generations, who have become the mainstay of consumerism, are accustomed to spending time playing games, shopping, and using social media, often with the expectation of receiving some benefit from the process.
Reliability of the System
The reliability of the social platform itself became even more critical. The trustworthiness of the inputted information by participants and whether the items earned by users in the community are securely preserved without loss will significantly influence the reliability. Customers who share their own content, such as written works or drawings, are looking for platforms that will preserve their content along with its source.
The Paradigm of New Social Media Platforms Emphasized by Web3
What is Web3?
Web3 is a new paradigm of internet technology that aims to overcome the limitations of existing Web2 platforms such as Facebook and Google, and to facilitate smooth digital data exchange and collaboration between users and businesses.
In the past, Web2.0 stored and managed users’ personal information and data on a centralized server. However, Web3.0 aims to pursue decentralized data management based on blockchain technology.
In addition, it combines technologies such as artificial intelligence, big data, blockchain, and the Internet of Things to implement a more effective internet environment, respect personal freedom and creativity, and ensure trust in privacy and protection of personal information. Therefore, Web3.0 is expected to generate more innovative services and economic models.
Why is Blockchain Important in Web3?
In Web3, blockchain technology enables decentralized data management instead of the conventional centralized server-based method. This plays a crucial role in ensuring the reliability and safety of data.
Blockchain technology bundles data into blocks and connects them in a chain. Since this chain is maintained in a distributed network, the entire network can continue to operate even if a node fails. This characteristic not only guarantees the safety of data but also protects it from attacks that manipulate or delete data.
In addition, blockchain technology is also used to execute smart contracts, which are digital contracts that can be programmed and function like contracts. This eliminates the need for intermediaries and enables more efficient and reliable transactions.
In the future, blockchain technology will continue to play an important role in Web3, and it is one of the essential elements for creating a safer and more efficient internet environment.
How can social media transition to Web3? – From a technical standpoint
To transition social media platforms to Web3, blockchain technology is required. Here are some ways it can be utilized:
- Decentralized data management: By utilizing blockchain technology, users can own and control their own data. Unlike the current method of managing data on centralized servers, utilizing blockchain technology ensures data is stored on a distributed network, which can prevent problems such as privacy breaches.
- Enhanced security: Utilizing blockchain technology, users’ data and transactions can be encrypted and security can be strengthened. This allows users to access safer and more reliable services.
- Blockchain-based content rewards: A system can be built to reward users who create content on social media platforms with blockchain-based cryptocurrencies. This incentivizes users to participate more actively and create more content, and platforms can utilize the content to provide more diverse services.
- Smart contracts: By utilizing blockchain technology, platforms can provide the ability to execute smart contracts. This enables users to directly process transactions on the blockchain between each other, removing the need for intermediary services. This allows users to engage in more efficient and secure transactions.
By applying blockchain technology to social media platforms in these ways, security and reliability can be strengthened, and user interactions can become more efficient.
Exact figures on resource savings vary depending on the structure, scale, and level of technology applied to the platform. However, studies show that using blockchain technology can reduce platform operating costs by up to 20%, and utilizing a distributed database can reduce data storage and maintenance costs by up to 50% compared to centralized databases.
Utilizing Web3 and Blockchain in Social Media
Secure Social Media Platforms
Steemit is a decentralized social media platform based on blockchain technology, which emerged in 2016. It rewards all user-generated content and comments using blockchain technology and stores rewards on the blockchain to prevent tampering. Additionally, Steemit enhances security by implementing a real-name authentication and reputation system using blockchain technology to prevent fake accounts and information manipulation. Although it experienced some fluctuations, the service has been continuing with high-quality content shared by users through security enhancements and advanced rewards systems using blockchain.
Peepeth is a decentralized social media platform based on Ethereum. It uses blockchain technology to provide a safer way to protect and share customer information and content created by users. Additionally, the platform offers various types of content to attract many customers, allowing users who upload and share content to receive rewards using blockchain technology.
Examples of SNS Transaction Platforms utilizing Blockchain and Smart Contracts
LBRY is a distributed digital content distribution platform. It has a system that enables users to upload and download content, such as videos, music, books, and games, and determine the value and sell it using blockchain technology called smart contracts. Users can purchase content using an encrypted currency called LBC, which can be withdrawn in cash by providers. LBRY also uses blockchain technology to support content creators in protecting and managing their content, resolving copyright issues and generating many loyal customers.
Customer-centered Web3 Social Media Platform: Bondee
Minds is a social media platform that utilizes open-source blockchain technology. Users can upload and share content and receive rewards. Minds offers high security by utilizing blockchain technology, protecting personal information, and providing decentralized services. This allows users to experience a safer and more flexible social media platform and has attracted considerable attention.
Bondee is one of the popular Korean social media platforms that has gained popularity recently. It provides real-time contact exchange, messaging, and content sharing services between users. Although there are several reasons for the app’s success, one of them is its focus on customer satisfaction.
The interface design and user experience of Bondee reflect the tastes and preferences of the MZ generation, playing a significant role in its success. Unlike other SNS platforms, Bondee offers a customizable UI for users and recommends content based on their preferences.
Furthermore, Bondee utilizes Web3 technology to solve problems that arise when users upload and manage content. The blockchain technology ensures the authenticity and integrity of the content, enhancing the protection of users’ personal information and data. This helps users to operate on a safer and more reliable platform.
Lastly, Bondee emphasizes building an ecosystem where users can share content using blockchain technology and earn profits. Bondee provides users with features to sell and receive sponsorship for their content, enabling them to earn revenue through their creative works. This is one of the key factors that differentiate Bondee from other SNS platforms, actively utilizing the characteristics of blockchain technology.
The Key is to discover Business Opportunities
Shortage of Blockchain Specialists
Many industries, including social media, are conducting extensive research to transition to Web3. The most challenging part of this process is the adoption of blockchain technology. There are three main aspects to be developed when introducing blockchain technology:
- Chain Development
- This involves implementing the basic structure and protocols of blockchain.
- It is responsible for core functions such as block creation and transaction processing in the blockchain network.
- Core Development
- This involves implementing the core logic of blockchain.
- It is responsible for functions such as smart contracts, ledger management, and security.
- Node Construction
- This involves building nodes that operate the blockchain network.
- It is responsible for functions such as network security, node communication, and data synchronization.
There may be additional areas to develop depending on the purpose and requirements of the blockchain project.
When hiring blockchain developers for direct development, the salary level can increase significantly depending on the developer’s experience and ability, and in some cases, a considerable amount of time and effort may be required. Furthermore, finding blockchain developers itself can be difficult.
The Solution is BaaS
BaaS stands for Blockchain as a Service and is a service that allows companies or developers to easily use blockchain technology. It is a cloud-based service designed to minimize the specialized knowledge and high costs required when introducing blockchain technology. When using BaaS, the initial and maintenance costs of hiring personnel and configuring infrastructure for blockchain development can be significantly reduced.
The specific figures may vary depending on the project scale, complexity, and development environment of the service provider, but generally, introducing BaaS can result in a cost reduction of up to 80-90% for large-scale project development. Using BaaS also has the advantage of reducing development and deployment time, allowing for a faster launch of the service.
Moreover, using BaaS enables companies or developers to concentrate on blockchain development as they can receive support from service providers specializing in blockchain security and management. Therefore, BaaS has become an essential service for companies or developers looking to use blockchain technology. Social media companies should focus on efficient development through BaaS and Web3 consulting and concentrate on discovering good content and business models.
To survive in the rapidly changing times, social media companies need to minimize their resources in technical aspects and focus on discovering new business models and providing user-centric services. For companies that need differentiation from existing social media and require web3 technology, they are introducing BaaS and consulting to prepare for a leap forward.
Lambda256’s Luniverse is a crucial service for companies and developers looking to adopt blockchain technology. This service provides blockchain components such as chains, smart contracts, and node services in a One Stop manner to increase efficiency in development and operation and reduce costs.
Through this, companies can easily adopt blockchain technology and focus on finding various business opportunities by connecting with existing business ecosystems.