How Ethereum Blockchain Can Solve Your Social Media Privacy Problem
Most would agree that the top drawbacks to social media are the loss of personal privacy, data protection and ownership of information. As the saying goes, “If You’re Not Paying for It, You’re the Product. ” This ‘centralized’ control model of social media might be a thing of the past, however, thanks to the next-generation ‘decentralized’ models of social media, based on blockchain technology. One such project is ‘Indorse’—a reward-based decentralized professional network on the Ethereum blockchain. Indorse uses a LinkedIn-style professional networking model, wherein members retain the ownership of data while earning rewards for sharing their professional skills and using the platform. Incentives, in other words. The data ownership and reward system is based on the blockchain principles of decentralization and tokenization. (Related reading, see: OpenLedger Launches Crypto-Ready Payments Card OCASH)
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Through its revolutionary platform, Indorse is looking to resolve three basic problems of social networking platforms—economic, autonomy and trust issues. The economic conundrum of traditional social media is that a ‘free’ platform should result in market failure. Since the information gathered is used by the social media company to earn revenue, the system stays intact. However, the providers of information, i.e. the users, do not gain any monetary reward from traditional social media. Social media’s autonomy problem refers to the concentrated control over the platform in just a few hands. The trust problem emerges from the autonomy problem, wherein a centralized power makes the decisions.
In its White Paper, Indorse highlights: “To be clear, we are not against advertising, and we are most certainly not against social media. However, we are against the centralization of social media. We believe the solution is a new model of social networks—a decentralized one that places ownership of information back in the hands of the members.”
How Will It Work?
Indorse will use internal rewards, called Indorse Rewards, and a reputation system, dubbed Indorse Score, to incentivize members not just to add their skills or accomplishments but endorse others as well.
Thus, Indorse is looking to engage members to participate more and more on the platform as it will ‘earn’ them ‘Indorse Rewards.’ The decentralized platform will also involve advertisers, who would be purchasing space using Indorse Tokens (IND Tokens) bought through an exchange. Now, a part of these IND tokens will be shared with the members who created the content. “In a nutshell, members are finally able to receive rewards due to their data, instead of watching passively as the revenue goes to companies holding their data,” as per Indorse.
Indorse—developed by Indorse Pte. Ltd., a blockchain company based in Singapore—has already completed its Token pre-sale, receiving 13,807 ether (ETH) in the public pre-sale and approximately 4,000 more ether in private placements. Indorse will begin its Token sale on August 8, 2017 (8 p.m. SGT) for a maximum period of 30 days. Here’s a snapshot from its fact sheet.
Rising Trend of ICOs
The mechanism to raise money for projects by sale of “Tokens” via an Initial Coin Offering (ICO) is becoming increasingly popular. It is estimated that over $1.2 billion has been raised through ICOs during the first half of 2017, as per a report by AutonomousNEXT. This exceeds the venture capital investment in firms related to Bitcoin and blockchain technology.
The Securities and Exchange Commission (SEC) in its recent report stated that “issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies.” The report further added, “Those participating in unregistered offerings also may be liable for violations of the securities laws. Additionally, securities exchanges providing for trading in these securities must register unless they are exempt. The purpose of the registration provisions of the federal securities laws is to ensure that investors are sold investments that include all the proper disclosures and are subject to regulatory scrutiny for investors’ protection.” (Related reading, see: Are There SEC Guidelines on ICOs?)
Eddy Travia, CEO and Co-founder of Coinsilium, shared his views with Investopedia: “The SEC message following its review of the DAO did not surprise the market nor the crypto community, the positive aspect of this message is the fact that tokens are being seriously considered by regulators across the world and a clear position by regulators will serve the token economy as a whole. He further added, “There are thousands of token smart contracts and thousands more will be created in the next six months. This puts immense pressure on founders to find adequate legal advisors, technical experts and marketing consultants who have experience in a token generation event.”
The Bottom Line
The project Indorse will create a parallel decentralized version of a professional networking platform. Like Indorse, other such projects are together building a decentralized world. Together, decentralized platforms and tokenization are emerging in a big way and if the trend continues—more regulatory and legality angle with get attached to it over time.