New Social Media Platform Openbook to Create Cryptocurrency
A crowdfunding campaign was launched this week on Kickstarter for Openbook, a new open source social media platform looking to challenge Facebook. The startup disavows the use of advertising for revenue, saying it plans to create a marketplace which will rely on an internal payment system, with all the hallmarks of a cryptocurrency.
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Openbook to Create Marketplace With Own “Digital Unit of Value”
Based in the Netherlands, Openbook was founded by privacy and security experts in April this year as a way of allowing users to enjoy the benefits of social networks without sacrificing their privacy. The founder and CEO of Openbook is Joel Hernandez, a cyber security engineer and privacy activist. The team also includes Phil Zimmerman, creator of popular encryption software, PGP, and Jaya Baloo, the chief information security officer for KPN Telecom, a Dutch telecommunications firm.
The features listed on Openbook’s manifesto appear similar to those offered by Facebook, with chats, posts, groups, and events. However, unlike Facebook, the startup says its business model won’t be based on advertising. In the FAQ section of its Kickstarter page, it says:
“Our business model is not and will never be advertisements. We will have a transparent revenue model based on a generic way for people to securely transact physical and digital goods and services inside the network. This will be done through an atomic digital unit of value. Although this initially reflected as a marketplace, our ambitions go way beyond that.”
An “atomic digital unit of value” should sound familiar to those familiar with the crypto/blockchain space. This appears to leave the door ajar for the possibility that Openbook is planning to introduce a cryptocurrency to power its online marketplace.
A Competitor to Facebook’s Blockchain Plans?
Facebook has already begun working on using blockchain technology on its platform, announcing in May the creation of a new internal blockchain team. The team is headed by David Marcus, the former head of Messenger and a board member of American crypto exchange Coinbase.
Shortly after that news broke, financial news site Cheddar reported on Twitter that Facebook was considering creating its own cryptocurrency:
SCOOP: Facebook is exploring the creation of its own cryptocurrency to facilitate digital payments for its two billion users.
— Cheddar (@cheddar) May 11, 2018
Cheddar, citing anonymous sources, reported that Facebook’s digital token would “facilitate transactions without government-backed currency.” In other words, something very similar to what Openbook is now announcing.
Despite its blockchain moves, Facebook has been heavily criticized in recent years in relation to its handling of user privacy. The Cambridge Analytica data leak saw the personal data of more than 50 million Facebook users end up in the hands of a British political consulting firm. And in June, it was revealed that Facebook had given dozens of device makers access to user data, possibly in violation of a 2011 consent decree with the Federal Trade Commission.
CEO Mark Zuckerberg recently said in an interview with Recode that Facebook shouldn’t take down clearly false information, such as denying that the Holocaust happened, because he thinks “there are things that different people get wrong.”
Apparently, for Zuckerberg, it’s also OK to put false information on Facebook as long as the poster believes the information is true. In other words, Facebook doesn’t appear to be planning to take substantial steps about the false information present on the platform anytime soon.
New Data Rules Help Social Media Startups
Against the enormous network effect created by more than two billion users, any Facebook challenger will be met with an uphill battle. However, the E.U.’s General Data Protection Regulation (GDPR), which came into effect in May, could reduce any incumbent’s lock-in effect by giving European users the right to transfer their data, such as photos, chat logs, and videos, from one social media platform to another. How exactly this will play out remains to be seen, but in principle it gives smaller firms like Openbook some leverage against the dominant social media platforms.
Openbook isn’t the first attempt to create an alternative to Facebook. In 2010, Diaspora, a non-profit decentralized social media platform, raised over $200,000 USD to create a challenger. And 2016 saw the creation of Gab, a platform created by Andrew Torba, which raised over $5 million this year. Gab is also planning a $10 million ICO some time in 2018.
No Decentralization… Yet
Openbook also addresses the question of why the platform isn’t decentralized in the Kickstarter FAQ, saying that decentralized systems are complicated to operate and would compromise user experience. Instead Openbook plans to build a centralized product that can compete with the social media giants today, and then later look into ways to decentralize the platform.
If the Kickstarter goal of €100,000 ($117,000) is met, Openbook plans to have the alpha version ready by March next year, with the full version complete by May.
Have your say. Could Openbook become a legitimate challenger to Facebook?
Images via Pixabay