A few years ago, things started to change. A couple of years ago, people started to become more aware of the importance of having a good digital reputation and online legitimacy. With more and more collaboration happening online, it became clear that physical reputation wasn’t enough to work efficiently with others. Managing a digital identity and the reputation that goes with it became a necessary skill, and was mostly limited to an email address and eventually a pseudonym on several forums.
The most important scarce resource is legitimacy, according to Ethereum founder Vitalik Buterin. This is especially relevant in the context of the internet, where coordination is everywhere. Much of our day-to-day interactions and need for coordination exist in digital accounts, so our online reputation and legitimacy are more important than ever. Our real-life and digital life are intrinsically linked. People are now landing new jobs on Twitter, getting new clients on Linkedin, and collaborating with their co-workers on Slack.
It is now more complex to manage our digital identity than it was in the past, because it is formed at the point where different platforms, communities, and groups intersect. So how can we manage this online identity efficiently and build legitimacy?
We are beginning to see proposed solutions for the problems of Web2 appearing on Web3. Web3 is a decentralized web, where platforms have decentralized governance and open data compared to Web2, where platforms are mostly governed by centralized teams (CEO and key stakeholders) with lock-in data (you cannot access the data of anyone else on Facebook, for example).
The ability to manage one’s online identity and reputation is set to become much easier with the advent of Web3 and associated crypto mechanisms. With these in place, every action taken on the blockchain will be tied to the user’s unique decentralized identity. This means that reputation will follow the user no matter which platform they are using. This shift is set to make collaboration much easier and value creation more accurately rewarded thanks to an improved reputation scoring system.
1/ The problems with the current online Reputation
As mentioned above, our physical and digital lives are connected, and online reputation is important. However, the value of most people’s digital identity is locked within the platforms they use. For example, a person with a large following on Instagram won’t have that same following if they start using Twitter. This is because there is no interoperability between platforms, meaning that data and information cannot be transferred from one platform to another. This lack of interoperability doesn’t incentivize users to do their best or build long-term relationships, as they know they will lose everything they’ve built up if they switch platforms.
The second problem with online reputations is that it is easy and free to create a new online identity. This makes it difficult to know who is behind a pseudonym or email address, and makes it hard to put much weight behind a name.
In order to create a legitimate reputation score, interoperability, open data, and a reliable way to identify someone are essential. Web2 platforms have failed to provide these key elements.
2/ Interoperability and reputation score on Web3
Without crypto mechanisms and wallets, we would not have a decentralized identity or be able to create a reputation score.
For every transaction that occurs on the Blockchain, there is a record of it on a public ledger that is accessible to everyone. In order to carry out a transaction on the Blockchain, you need a Crypto Wallet that identifies you. It’s similar to needing a credit card to make a purchase online, but with the added ability to use your Wallet to do non-financial transactions. Imagine if you could use your credit card to sign up on new websites.
With a “connect with your Wallet” button, Web3 platforms can track a specific user’s activity and give them rewards for creating value.
Cryptocurrency wallets solve the problem of fake online identities by creating a new address linked to your wallet. This makes it much more difficult for someone to create multiple identities, as the cost of creating a new wallet would be too high.
At coinvise, we use BrightID to verify people’s identities. BrightID is a social network that allows users to prove that they are only using one account. It is an important tool for digital identity. People are verified on BrightID based on their social relationships and the communities they belong to. We use data from BrightID (such as whether a user has a verified account) to assess an overall Reputation score. This helps us to ensure that everyone is using a single identity on the Internet.
All those data can be stored in Kleros TCR and used by any platforms that require user’s credential. Interoperability is now necessary. In Web3, every transaction is taken on-chain and therefore accessible in an open ledger, so Crypto wallets also allow interoperability. With its open data model (every information is on a public ledger), Crypto allows any Web3 platform to use that data and, therefore, recover the user’s reputation from other platforms. For example, if a user sends many messages on Discord, it’s a good sign that the user is engaged in a community. If a user has participated in several community’s crowdfunding, it shows its support in different communities. All that data can be stored in Kleros TCR and used by any platform that requires user credentials.In the new world of Ethereum and Web3, your identity and data are portable.
The advantages of having a web3 reputation score are that it would be tamper-proof, portable, and universal.
3/ Main advantages of a Web3 Reputation score.
There are several benefits that come along with having a Web3 reputation score. For starters, it works as a way to measure a person’s involvement, as well as their creation and ownership. This helps to identify which creators and communities are of high value, and provides access to a higher quality pool of talent for communities to draw from. In many ways, a good reputation score will help to establish trust for creators, not just because they’re popular on Twitter, but because they’ve likely built a community of high value. With the reputation score being interoperable, Web3 platforms and communities will be able to give rewards to those who create the most value. The reputation score incentivizes both creation and participation.
A reputation score on Web3 has many advantages that we’ll list here:
- Self-sovereignty – users own their online identity and reputation. Web3 platforms do not lock their data, and they are the only ones with access to their Wallet and all proof of their identity and past actions.
- Portability & interoperability – Users are allowed to move their data into other systems and platforms. On Web3, anyone could bring its audience or content from a platform to another.
- Allow to find high-quality people – Users and communities will work with people who have a high reputation score. A reputation score will incentivize everyone to create more value and help each other.
- Better governance distribution – Today, we mostly use users’ number of tokens to give voting power. In the future, it could be directly your reputation score that serves to determine your voting power. It won’t be enough to buy a lot of tokens. You’ll have to prove your value to gain voting power.
- Establish trust – With a life-long reputation, users will be more likely to play the infinite game, where the objective is not to win but to keep playing. As everything is on-chain, users will be incentivized to do good, ultimately resulting in more trust.
- Incentivize to create more value – Users will be incentivized to help each other without fearing losing their reputation when joining new communities or projects. Someone with a high reputation score will be able to join new projects and prove its past experiences and capabilities right away.
Coinvise’s reputation score is a way to help establish trust for content creators, and to reward those who create the most value. By having a verified identity on Coinvise (which includes a Wallet and a Twitter account), creators can be confident that the value they are creating within their community will follow them to other platforms. It’s time to use new technologies to give users control of their digital identity, and allow them to take their reputation with them across platforms.
How to Build a Decentralized Social Network?
1/ The problems with Web2 Social Networks
The past decade has seen the rise of social networking and user-generated content platforms, as well as the emergence of social media. This has allowed everyone to have a voice on the internet and express their creativity through their content. Some users have amassed millions of followers and have started to monetize their content. Creators, also known as ‘influencers’, have discovered that they can monetize their audience through these platforms, and that it is possible to make a living from their passion. They are helping others (brands and businesses) to achieve their goals.
Over the past 10 years, the internet and society have changed significantly. People who used to work for brands have now realized that they can become their own brands and create products for themselves. However, current social media platforms are not equipped to handle the needs of these new creators.
There are three main problems with current social media: users are locked into their account data, there is a centralized power structure, and the business model is driven by ads.
- Lock-in Data – Our physical and digital lives are intrinsically linked, and online Reputation is more important than ever. However, for 99% of people on the Internet, the value of their digital identity is locked within platforms. Creators that have built an audience of 1 million followers on Instagram won’t start in another platform like Twitter with 1 million followers. They will begin with 0. Amazon sellers who have built their Reputation for years won’t start on other marketplaces with five-star reviews. They will begin at 0. When leaving a platform, users have to start from scratch, all over again, as there is no interoperability between platforms. The data are locked. It doesn’t incentivize users to do their best or build long-term relationships as they know they will lose it when leaving the platform. Furthermore, we cannot keep locating our social connections and memories inside servers controlled by for-profit companies. The connections between people should be controlled by the people, not by companies. Decentralized Social networks must re-capture our social data in new ways.
- Centralized Power – Today, social media is hyper-centralized. A handful of private companies control public discourse and earn profits off content they don’t even create.
- Ads-driven business model – This outdated business model forces current social networks to keep a walled garden around their content. Indeed, opening their data would mean killing their business model. Their main way to monetize is to sell those data to for-profit companies to target specific audiences. This business model prevents external developers from innovating or building apps on top of it. It also gives users and creators no choice but to continue using these apps as they have already created an audience on these platforms. On top of that, this business model creates a situation where creators who actually produce the content are underpaid, under-monetized, and don’t fully capture the value they are making.
We are now entering the third phase of social media where creators are realizing they can build big projects with their fans and involve them in the process. This is a complete paradigm shift in the fan/creator relationship that social networks cannot provide the tools for.
What creators need are platforms that empower them to produce content without interference. Decentralized social networks can provide this by allowing users to directly interact with each other without going through a central authority. This would allow for a variety of different use cases to emerge.
In order to answer these questions, we need to study how past social platforms worked.
2 – Social mechanisms of current Social Network
Its important to understand what characteristics make a good social media platform before using one that is decentralized. By understanding how the current social media platforms work, we can learn more about human social behavior and how to utilize cryptocurrency to fulfill these needs.
2.1 – Proof of X
In his famous essay “Proof of X”, Julian.digital argues that social networks are primarily about one thing: Building social capital through signaling. He states that people use apps like Instagram to prove they are creative (Proof-of-creative-work), Wikipedia to show they are knowledgable (Proof-of-knowledge), and Strava to demonstrate they are athletic (Proof-of-Physical-activity). Julian goes on to say that while the competitive nature of some apps might be negative, the physical activity required to compete has a positive effect.
A strong positive feedback loop will make sure people use the platform repeatedly because it makes them feel good and it is actually good for them. The more people use the app, the more likely they will do the atomic behavior. Creating a viable, decentralized social network that is actually good for people is the goal of a positive-sum game.
The question is: What other social networks could have similarly positive feedback loops? The play-to-earn model, where users have to do specific tasks to get rewarded, is an exciting model that is being explored.
3/ How to build a decentralized social network?
The best social platforms have achieved great success by completely changing the way people communicate, altering the medium, and effectively playing on human psychology. People were originally drawn to these platforms because they were something new that allowed for completely new behaviors. I believe that Web 3.0 platforms will hook the next billion social media users by creating a brand new experience that provides a way for people to communicate and collaborate with each other. Snapchat allowed people to communicate through temporary photos, TikTok through short videos, and Clubhouse through audio. So what kind of new experience can future Web 3.0 platforms offer?
3.1 – Solving the lock-in Data problem
Decentralized social networks have an advantage over traditional social networks in that they’re not tied to a specific platform. With its open data model, Crypto allows any Web3 platform to use the accessible data and, therefore, recover the user’s Reputation from other platforms. A creator with 1M followers on a decentralized platform will bring them on any other Web3 platform. They are tied to their Crypto Wallet (Online identity) and not to a specific platform profile.They will begin with 1 million. Amazon sellers who have spent years building up their reputation will not start on other marketplaces with 0 reviews. They will bring their reputation from other platforms and retrieve all their 5-star reviews. This is a complete paradigm shift, and it can be a difficult concept to understand. Just as you can access your email inbox from any computer in the world because it is linked to your login and password, you will be able to access your followers from any platform in the world because it is linked to your Crypto Wallet.
Rather than creators having all of their community’s attention focused on one platform, it will be spread out across multiple interfaces. The total engagement across all interfaces will be greater than if it was concentrated on a single platform.
In order to create a successful Decentralized Social Network, it is essential to allow Interoperability.
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