Weekly Digest: These 2 Services Could Replace Twitter and YouTube

Welcome to your Sunday digest…my breakdown of the things we’re thinking about and talking about in the Global Intelligence world. 

First up this week…the end of social media as we know it. 

Regular readers will know that I’ve been predicting that Facebook, Twitter, YouTube, Instagram, and the other social media giants of today will become obsolete in the not-too-distant future. These Web2 companies are about to be replaced by new Web3 versions. 

Web1 was the first iteration of the internet, the text-only version back when companies like Ask Jeeves and AOL were popular. Web2 is the current age of the internet, dominated as it is by big data firms like Google, Amazon, Facebook, et al.  

But now we are moving into Web3…a new era built on blockchain technology, the backbone of crypto. 

When I say this, some people recoil, arguing that many people will never embrace crypto. But that’s not the point. Most people will probably not even realize, at least initially, that they are using crypto services. They’ll just be moving to newer, more effective platforms, the same way they moved from MySpace to Facebook. 

And make no mistake, these blockchain-based social media platforms will be infinitely better. 

Because they will be built on crypto technology, you will own and control your data…meaning you will get paid for sharing it with advertisers (if you decide to share it at all). 

Creators too will get paid more, since they will be able to control their own content and even set their own fees. And they will be able to get around the “walled garden” problem.  

At the moment, creators can have 10 million followers on Twitter, but if they start a YouTube channel, they begin at zero just like everyone else. In the Web3 model, creators will be able to port their entire accounts and even their subscriber list to a new social media platform. This will give power to the creators, not the companies. 

It will be the same for us. We will be able to securely move our social media profile, which we will own via a non-fungible token (NFT), from one platform to another.  

All of this may be hard to imagine or sound like some pie-in-the-sky fantasy, but this future will arrive much sooner than many people might expect. 

Already, several blockchains have been developed specifically to support social media applications. These include Len Protocol, from the team behind the popular decentralized finance service Aave, and DeSo, which is funded by venture capital firm Andreessen Horowitz. 

There are even live applications on these blockchains that you can try out, including Phaver (crypto Twitter) and LensTube (crypto YouTube). 

The social media firms of Web2 have outstayed their welcome. They started off providing a good, innovative service, but they now put profits above everything, most especially customer experience. (Remember when YouTube didn’t have 15 ads in every 3-minute video, or when the top search result on Google was not an ad, but the actual top result?) 

Sure, it will probably take several years for blockchain to take over. And Facebook and co. will probably hang around for a while after that, the same way MySpace still exists today. 

But social media is a space ripe for innovation. And blockchain-based services are about to deliver it. 

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Sticking with the next evolution of the internet… 

Blockchain will not only unleash innovative new social media platforms, it will be the key technology in fostering the metaverse.  

The metaverse is the future of the internet. Instead of staring at a computer monitor or smartphone and using the internet in two dimensions, in the future we’re going to view the internet in three dimensions…all around us. We’ll use virtual reality glasses and augmented reality tech to access these 3-D virtual, metaverse worlds. 

This may sound fantastical, but the world’s top companies are preparing for this…and so are the big investment funds. 

Invesco, a global asset manager with over $1 trillion under management, recently introduced a new fund focused on the metaverse. 

The fund’s management team is based in the U.K. Its co-head, Tony Roberts, said, “It has been estimated that, by 2030, virtual and augmented reality could deliver a £1.4 trillion ($1.7 billion) boost to the global economy. While the metaverse’s applications to entertainment are increasingly well-understood, the interconnectivity that it enables will likely have a transformative impact across industries as diverse as healthcare, logistics, education and sport.” 

This is a major sign of where Wall Street is headed. A lot more of these funds will be set up in the months and years to come.  

And it explains why I want to be in this space now…as an investor in crypto. 

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Finally this week, China’s top industrialist sounds an alarm bell. 

Ren Zhengfei is the founder of Huawei, believed to be China’s biggest company. In a leaked internal memo, he recently described a bleak outlook for the tech giant and the economy. 

“The next decade will be a very painful historical period, as the global economy continues to decline,” Ren said in the memo, which highlighted the pandemic as well as the impact of the Ukraine war and a “continued blockade” by the U.S. on Chinese business. 

“Huawei must reduce any overly optimistic expectations for the future and until 2023 or even 2025, we must make survival the most important guideline,” Ren added. 

A big challenge facing Huawei is those U.S. sanctions. The U.S. and many European nations have barred the use of Huawei equipment in certain key sectors such as 5G networks over national security concerns.  

Those sanctions are largely justified in my view. In the U.S., companies have legal protections, meaning they can argue against U.S. government orders in court. But in China, companies have no realistic recourse.  

If the Chinese government comes calling at Huawei or any Chinese company demanding sensitive data on U.S. infrastructure, they would have to comply. That’s understandably unacceptable to Western governments. This situation wasn’t really holding China’s economy back when it was focused on basic manufacturing. But it is a serious problem as China tries to take the next step to high-tech products.  

After the leak, Ren’s memo went viral on Chinese social media, with many people expressing fears that if a national champion like Huawei is in trouble, it indicates the wider Chinese economy is even more vulnerable. 

Some have even interpreted Ren’s memo as a not-too-subtle plea for China’s government to tackle the big structural challenges with the country’s economy, such as the lack of legal autonomy for Chinese businesses.  

If that was Ren’s intention, those calls are likely to go unanswered. China’s government under the current president, Xi Jinping, is interested only in consolidating power…which in turn is likely to damage China’s long-term economic development. 

That brings us to the end of this week’s digest. Many thanks for being a subscriber. And if you have any feedback or questions, reach out through the contact form on the Global Intelligence website. 

Enjoy the rest of your Sunday.