Social networks are a viable opportunity to achieve mainstream adoption of crypto. They can expand crypto awareness and use. Crypto has always faced headwinds when it comes to mainstream adoption. The problem is that developers wrongly believe that creation will instinctively lead to adoption. But reality proves that is not the case. Projects try to justify their existance by proposing a solution to a variety of problems that don’t need immediate solving. It’s nothing more than a solution looking for a problem. This creates a delay in adoption because current systems work fine for the time being. But now social networks offer a new approach.
Social networks contain the largest user base in any market. Their user count is in the billions and that means the opportunity for mass commerce, distribution of information, or to form a movement is inherent. For example, Chinese social media and mobile payment app WeChat has over one billion users. Users that connect with each other and transact using the WeChat Pay function to transfer or pay individuals or vendors.
WeChat is an exercise in convenience as users can also do borderless payments and transmittals from their phone. Integrating crypto into a social app can do the same without the need of a wallet. Social networks can utilize API interfaces to access users wallets or cold storage devices. They can also have atomic swaps capabilities to accept payments in different crypto currencies. Another benefit is that the addition of a crypto payment gateway outsources the overhead and regulatory costs to the crypto company.
In June 2018, Canadian multimedia messaging app Kik introduced the cryptocurrency “Kin” into their platform. Kik is a social platform that allows for user interaction via video or texts among its 300 million users. Kin is earned through solving puzzles, trivia, etc; members then use Kin to buy virtual items or features from the site. This symbiotic relationship is slowly growing but it lacks volume.
If Facebook, Twitter, YouTube and Instagram (with their combined 5.2 billion monthly active users) were to adopt a crypto payment capability, it would drastically increase crypto’s exposure. This is not to say that it will replace Point-of-Sale or other monetary transaction methods, but that it will drive implementation and adoption.
There are a number of cons to using crypto inside a messaging app. For starters, crypto currencies are unstable and not regulated. This would have to change in order for the idea to work. Second, in order to meet AML crypto regulatory compliance, users would have to submit to KYC questionnaires. And that would make for a tall order to ask from a mass customer base. And third, fraud would also need to be mitigated or the host network would be responsible for theft or loss of crypto.
There are some crypto-based social networks like Mithril, Steem, and BAT. However, their audience reach is limited to network capacity and scalability issues. In addition, their market price gives a false impression of their success.
On the other hand, legacy social networks have established communities and systems. Their popularity has the power to bring the masses together and thus are perfect vehicle to boost crypto adoption.