This social network wants to pay you (in cryptocurrency) to do it well
Block.one raised $ 4 billion in 2018 by promising to build a decentralized, blockchain-based platform. Now its social network wants to encourage quality posts.
LAST JUNE, AT a flashy, vibrant event in Washington, DC, Brendan Blumer, 33-year-old CEO of a blockchain company called Block.one, has revealed a new product with the same stage as Steve Jobs: a Social networking is called Voice. A year ago, the company Blumer, raised $ 4 billion to sell a crypto token called EOS. By far, the largest initial coin to date provided more money than any of the initial U.S. public offerings that year. But unlike the IPO, it's not clear what participants bought, aside from the rights to the token that didn't exist yet, based on the technology that didn't exist.
That is the story of most ICOs. But even in the speculative, high-flying world, this Block.one approach is unique. Many ICO implementation groups have transferred their funds to funds in places like Switzerland, which is governed by the regulation that requires money to be used to build the relevant technology. But Block.one is a for-profit organization, based in the Cayman Islands, after it hands over the platform and tokens, which can spend money at will. Jill Carlson, an investor and adviser to early ICOs, says that raises many questions. Plus, the money has been raised throughout the year, longer than most ICOs, with no limit on how much Block.one can accumulate.
At the time, there was a lot of Block.one's global hype, based on the promise of the software's potential to change the world. John Oliver roasted the company as a symbol of irresponsible cryptocurrency madness. You don't invest, you gamble, you say.
Shortly after ICO 2018, Block.one provided what was promised to the token buyer: an open source technology platform that others can use to launch a network. Currently, EOS is operating in a decentralized fashion, with developers around the world voting on the changes and keeping the network safe. EOS tokens are currently worth around $ 5 billion. But the network has spawned many interesting applications. Instead, it is filled with spam, games and gambling applications.
The voice is an attempt to quell the haters. The vision, Blumer told me, is to use blockchain to solve the problems of social media, to avoid both the control of large technology companies and the false information and trolls that lack of control. control. It will also show how EOS can live up to its promise to provide the most powerful infrastructure for decentralized applications, which is based on a computer network owned by different people. , instead of an entity like Google. That, at least, is the extent to which the token sale is in progress: an upgrade from older blockchains like Ethereum, too slow for most use cases.
On both points, the jury is still out. On Friday, Voice is in beta and there's a new company running it, earning $ 150 million from Block.one. It uses Block.one block chain technology, but for a YouTube private block chain, runs on Voice servers; Its currency is a new token of Voice of Vietnam. Blumer points out that it is only a beta version and the company will consider Voice decentralization in the future, possibly using the EOS network. But doing so would mean defeating a range of challenging technical and regulatory issues, and Blumer wouldn Commit to specifics. Elephants It will come down to what managers will tolerate, he said.
I look at something like Voice, where there's a lot of concentration, and my first question is: Can you do that without using blockchain? Carlson, investor and adviser said.
Currently, Voice (the company) has an employee, Salah Zalatimo, who was formerly a digital director at Forbes. This week, he's hunting for office space in Brooklyn, where he hopes to fill the types of people found at other social media companies, from engineers to content executives. Some employees may come, initially, from Block.one. (Blumer said that the company spent $ 150 million to develop the website, including $ 30 million for the Voice.com domain name.)
Zalatimo told me to think of Voice as Medium, or maybe Twitter, but with one key difference: money. The goal is to use tokens to encourage good behavior, or as Blumer says, economics is associated with all of our behaviors. Users are paid by Voice Token to view or click on ads and can use tokens to do things like show more for posts or comments. That, Zalatimo said, will help encourage people to post content
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To use Voice Token, you will need to upload an ID to prove your identity. There are two reasons for that. One, Blumer said, is to avoid bots and false information by verifying everyone is a unique person. The other is regulation. With digital currencies floating on the platform, Voice needs to obey the laws of knowing your customers. (Currently, in the beta version, the tokens are not valid; the Voice is still lobbying the Securities and Exchange Commission to continue growing.) Block.one has extensive experience navigating the rules there. In September, the company agreed to a $ 24 million deal with the SEC on an unregistered $ 4 billion ICO.
Blumer acknowledges that it is possible to rank cryptocurrencies. Typically, the highlight of blockchain-based social media is that it will decentralize power, giving control to users instead of a single company. But Blumer points out that companies may be legally responsible for content they host online for things like child pornography, but also any personal data that is legally required. privacy such as GDPR in Europe and the California Consumer Privacy Act. Following those rules, companies are required to delete personal information, which can be difficult on a decentralized blockchain network that no one controls.
There are challenges with building a large business on a decentralized network. How can you go and build a regulated business when the chain may change tomorrow? Blumer asked, pointing out the changes on the Ethereum network have angered some developers. It will be as if Facebook is constantly being broken by changes on the internet. Since its launch, the public EOS network has had many issues regarding decentralized governance.
For Voice, the big challenge will attract users and make its market work. Despite the backlash against companies like Facebook, similar blockchain efforts have struggled. Those include Steemit, a social media site co-founded in 2016 by Dan Larimer, who is Block.one Times CTO and Civil, has sought to fund news outlets through tokens. In 2018, Steemit laid off 70% of its employees; Civil closed, but tried to reboot. Requirements like uploading your ID to join don don help attract users, but Blumer thinks the payment promise will.
The rationale for blockchain, according to Blumer, is transparency. Although Voice will control the network, he says that anyone can freely check the blockchain database and view any data they like, like where the ads are targeted, who bought them, A record of each like and comment. Yes, Voice can change rules or rewrite data. But Blumer argues by keeping it open, the public will be able to take responsibility.
It remains to see how will work in practice. Finally, Blumer notes, the company can rely on a public, decentralized chain in some fashion perhaps to store some data on social networks, if not all. The company is also developing an identity system that will act as a bridge between the Voice blockchain and other systems. Blumer said that Block.one will continue its efforts after the Voice comes out.
Boram Kim, a software developer in Seoul, a member of the EOS network operating group, said that he understands why Voice is not decentralized but EOS's network is clogged, currently, with spam and very good to check. Investigate network privacy. But he hoped it emigrated last. He hopes that this will be a killer [decentralized application] that everyone wants to use on the EOS mainnet, he said.
Block.one has lots of runways to keep it. Of the $ 4 billion, the company said it will entrust $ 1 billion to venture capital firms planning to invest in EOS-related products. What about the rest? The company will continue to improve the underlying protocol, Blumer said, and plans to expand its efforts in separate blockchains for businesses, which have been dominated by Ethereum so far.
Ultimately, the answer really belongs to Block.one and its investors, who have real equity, not just tokens, including Peter Thiel and co-founder Bitmain Jihan Wu. Blumer points out that Block.one built its protocol before selling the token. ICOs have been a way of making money from our products, he said. The company then freely used its billions to build the business they wanted to build. For a blockchain-based social media venture, that's what he does.
Update, 2-14-20, 1:55 pm ET: An earlier version of this article cited Brendan Blumer saying that Block.one executives "did not discuss" whether the 150 million investment dollars to Voice.com will come from authorized $ 1 billion C