Social media has emerged as one of the most effective ways to communicate, advertise and inform over the last decade. From the early days of Myspace to today’s burgeoning platforms, social media has evolved into a multifaceted beast. According to Statista, 2.77 billion people used one form of social media or another in 2019.

With so many people now plugged into sites such as Facebook, Twitter and Instagram, it’s hardly surprising that blockchain companies have jumped on the bandwagon. Today, initial coin offerings (ICOs) are being used to fund the next generation of social media platforms.

The History of Social Media ICOs

Mastercoin is said to have held the first official ICO back in 2013. The following year Ethereum (ETH) joined the mix, but it wasn’t until 2017 that crypto fundraisers started to gain popularity. With businesses seeing it as a way to generate capital for their ideas, ICO funding hit $12 billion in 2018.

Caught up in this wave of decentralized token sales was social media. As well as offering a medium through which top ICOs like EndChain could promote their ideas, the sector has spawned its own innovations.

By the start of 2019, multiple social media startups had turned to ICOs. Solving issues such as efficiency, distribution of information and the value of a social influencer’s profile, social media ICOs have laid the foundations for a more secure, people-centric ecosystem.

About Social Media ICOs: How Blockchains Are Changing the Industry

Every social media ICO has a different aim. However, the underlying theme with each startup is blockchain-based decentralization. As it stands, a number of social media users are becoming increasingly concerned with what they deem to be censorship of free speech. Although platforms such as Twitter are private companies that can act in any way they see fit, the ethos of social media has always been freedom.

Giving people a voice and, in turn, connecting them to other people with similar views are what has made Facebook et al so popular. As issues of racism, sexism and more have come to the fore, social media sites have been forced to take a hard line against certain users, comments and more in recent times. Between this and a general desire to give user’s more control over their content, social media ICOs have gained momentum.

Although data on just how much social media initial coin offerings have generated is lacking, INFLR reached its hard cap after selling 140,000,000 tokens at $0.0218 each in 2019. The company connects advertisers and influencers via the Ethereum blockchain. Described as an economy-of-influence, the blockchain ranks influencers using a proof-of-influence algorithm. Tokens are then used to determine a user’s value and allow them to offer incentives to followers and more.

Another example of how a social media ICO can generate a sizeable amount of capital is Conjure. Aiming to incentivize quality content, the system makes it easier to find information and, in turn, monetize it. The startup had a hard cap of $6 million and sold 70 million tokens to investors willing to pay in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Neo (NEO).

The future of social media ICOs is likely to see more of the same in terms of content control, distribution and monetization. The original aim of Bitcoin was to remove any central authorities and improve the flow of information between users. Within the social media sphere, content, followers and influence all have a value. Blockchain technology naturally feeds into this dynamic, making it possible for companies to improve the way in which information is processed. Therefore, as the sector matures, startups will find new ways for content producers to share their wares and reap the benefits more directly.

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Blockchain Resources

For more on blockchain technology and initial coin offerings, check out our list of resources below:

• Learn about blockchains such as Bitcoin and Ethereum, as well as new platforms, inside our blockchain hub.
• Check out the latest price movements and market analysis via our cryptocurrency price page.
• Find out more about the latest token sales and how to invest with our complete ICO directory.
• Get expert insights and analysis on the latest ICOs and more via our opinion pages.
• Stay up to date with the latest industry innovations, token sales and more with our comprehensive crypto news section.

 

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