Abstract:

This paper aims to examine how blockchain and Social media play a part together to help influence various transaction and also comments that can impact price movements immensely of crypto currencies. In this paper, it begins by explaining the rise of blockchain and how social media started playing a role in influencing it and also how it to lead to being one of the main basic framework for web 3.0. The stream I will be discussing relates to the online networks and social change and in this paper I will highlight the impact and the influence social media has played on blockchain.

Introduction:

Social media has always pursued to have an important and significant impact on various major industries such as the crypto currency and blockchain technology which also plays a very important role to the growth and popularity of blockchain. Blockchain is a digital ledger for transactions with a system that records various different transactions made by various crypto currencies (Rojas, 2018). It is also linked to a peer-to-peer network, “which is a classification of various computers linked together to help process equal amounts of transaction, permission, and responsibilities.” (Rojas, 2018)

Blockchain has helped shape many online communities and also creating a path in the advancement of important technologies. Bitcoin was the first introduction to the system of blockchain which is the prime crypto currency and the arrival of Bitcoin is considered to be the bedrock of blockchain. (Rojas, 2018) This has played a significant role in the development of Web 3.0 and the transformation of the data structures that help exhibit interoperability, automation, integration, and ease. It is clear that social media aids in popularizing crypto and this role of social media largely contributes many of the price fluctuations. Social media platforms that currently have the most influence on crypto currency’s demand and discussion is Instagram, Facebook and Reddit. (Arnold, 2018) With the numerous active users on these platforms, users discuss and influence various decision that impacts the crypto industries while major influencers have the most impact.

Blockchain and the Social Media

The technology that legitimizes the quiddity of crypto currency is the blockchain. The crypto currency for which blockchain was contrived is Bitcoin, which is now a prime crypto currency. Blockchain swanks in its wherewithal to ameliorate business processes eventuating in allying organizations, fundamentally waning the cost of trust. Social media can impart users control over incentives and reputation points by encrypting data and moving it through impregnable crypto transactions. In research from Rojas (2018), it is clear that social media aids in popularizing crypto and largely contributes to price fluctuations. “Its role in the blockchain is the future of global crypto currency adoption. Some people believe that what is not trending on social media isn’t happening” (Rojas, 2018). Social media ventures can bilk suppressions by keeping user content on a blockchain’s static ledger. Social media comments can impact bitcoins’ price movements immensely. “Social media platforms such as Facebook and Twitter have numerous active users who are bots.” (Arnold, 2018)  If the accounts send tweets that can contain positive and negative views about blockchains, they may inveigle people’s exigencies to possess crypto and have a ramification on the prices.

Social media enables users to share their opinions and views through comments. Research has shown social media comments to impact blockchain prices immensely. “Crypto currency provides an opportunity to comprehend the economic value of social media and its role in catalyzing the spread of innovation.” (Rojas, 2018) Online discussions on crypto currency are abundant and diversified. These characteristics make blockchain ideal for testing new theories. Social media is essential in the prediction of future values of crypto (Mai et al., 2018). More slumping platforms from social media posts are significantly associated with a rise in value. The localized populaces of social media are the greatest influencers of blockchain and crypto currency prices. A recent study found that infrequent respondents taking time to comment on blockchain had a higher impact when posting positive commentary. Investors are looking to gain comprehension of the crypto currency’s public viewpoint and market trends (Mai et al., 2018). Social media will critically persist its promotion of blockchain education and advocacy as the shift toward a digital economy.

The Power of Sporadic Opinions

The silent majority’s opinions are sporadic after significant events and usually uninterested in creating a stir (Mai et al., 2018). The silent majority is more concise and pertinent. The silent majority is less inclined to interact in idealism and group values conformity, which leads to willful ignorance and collective denial. Crypto currency has been mocked for having a value that the most zealous users determine. It is possible that the vocal minorities participate in numerous discussions about crypto currencies and blockchain, become engrossed in most exalted ideas, and are more susceptible to groupthink. They retain views supported by more effective performance measures for actual shareholders.

Blockchain’s Popularity and Mass Adoption

Various social media platforms affect the blockchain differently. On Twitter, most communications propagate from sender to followers, who further distribute information through retweets. In-depth discussions reflect on the future picture. Twitter mainly focuses on timeliness, which is why it has more significant influence than other social media platforms. In a survey conducted in 2019, more than 60% of Americas did not know of the existence of crypto currency (Hyder, 2021). With social media, there’s a ready market for crypto-related information and a growing list of people meeting its demand on social media. It has been positive development as brands and individuals alike are accomplishing requests. Social media is a vital way to build brand loyalty and market services, considering that it’s growing and the skepticism around it has not disappeared (Hyder, 2021).

Mass adoption has been a long-term goal for the blockchain industry. Reasons from lack of government recognition, lack of understanding of the technology, and the high-risk factors have been credited as deterrents to mass adoption. Trending information about extensive crypto currency exchange can cause a significant drop in digital currency value (Tan, 2021). Most innovations focus on short-term growth and provide no reason for transitioning from centralized to decentralized systems. Since the launch of social media, the dynamic has changed. There is an influx of users globally due to thoughts shared via social media (Tan 2021).

The Elon’s Effect

Elon Musk took a long time to show interest in crypto. Tesla was the first auto manufacturer to accept Bitcoin in exchange for their products, increasing Bitcoins value. Social media are impactful on people’s emotions. The blockchain value can decline if a particular coverage portrays it negatively (How Social Media Affects Bitcoin’s Value, 2021). Elon Musk is a big fan of blockchain, and Twitter means big for crypto. Crypto currency asseverations are a thing in most of his tweets. A single tweet from Elon Musk sent dogecoin prices up to 50%, and for a time, bitcoins’ price action relied on his opinion (Oosterbaan, 2021). The power of social media in the crypto market is a demonstration to the general lack of regulation and maturity and the inherent liquidity of the hourly permission-less assets. (Oosterbaan, 2021). The crypto currency market will continue to mature with further restrictions and innovation. Therefore, celerity influence will subsist to intensify. Blockchain has shown its potential to attract genuine investors through the eternal force of social media. (Oosterbaan, 2021)

Musk could push Twitter to buy Bitcoin as a treasury asset, similar to what he’s done for both Tesla and SpaceX. Given Twitter’s visibility in the U.S culture, acquiring Bitcoin to hold on to its balance sheet would be an excellent deal. Scooping more bitcoins would have a swoop on the prices. Changing the management would have made sense for Bitcoin (Denton, 2022). Elon aims to launch new features and proliferate credence by creating algorithms open-source to trounce spam bots and “authenticate all humans.” “Twitter has tremendous potential,” said Elon in a tweet (Bitcoinist, 2022)

Path Creation for the Web 3

Web 3, or the decentralized web, is the third generation of the internet, using decentralized ledger technology, big data, and machine learning. Web 3 gives users a better browsing experience and makes data analysis more efficient. Networks in the third generation exhibit interoperability, automation, integration, and ease, and thus, blockchain serves a significant role in the development of Web 3 (Geroni 2022). Blockchain plays a vital role in the transformation of conventional approaches for data which is subject to collective management. Bitcoins arrival is the bedrock for web 3, especially on how it transforms data structures in the backend. Blockchain supported the development of a ruling layer over the existing internet. The governance layer allows non-trusting persons to communicate and reach an agreement over the internet. Blockchain was interested in introducing a backed (Geroni, 2021). Web 3 is a server less internet managed by coded rules to support individual actions. Web 3 leverages blockchain technology to reinvent ways of storing and managing data over the internet. Blockchain removes the need for intermediaries.

The Power of Blockchain on Social Media

With the use of blockchain in social media, users get to control who can access their data. The reason behind receiving news according to preference is the user profile—blockchain can end hacking, which majorly compromises user accounts. Every platform requires permission for data to be accessed, keeping information secure. Blockchain technology enables one to charge a fee for the information shared with advertisers, allowing the right audience to access information. Crowd-funding can be made easier for investors. People can accept payments and verify users without being at risk (Arnold, 2018). Blockchain will enable privacy and freedom of expression. Data is one of the most profitable assets and could be compromised for illegal gains. With the availability of blockchain, social media can ensure more privacy and help users understand rights and express themselves freely. This could mean more transparency in social media.

Blockchain aids battle fake news. Spam bots and fake news are dominant. By removing the primary server, no entity can enforce monitoring and controlling of user-generated content. Those content with social media should explore blockchain to become early adopters of new opportunities. The power of blockchain has made the development of crypto-based social networks and thus proffering giant practicalities to merchants and connoisseur. Most crypto-based social networks reward users’ involvement. Social media helps assess blockchains’ compliance with standards (Hyder, 2021).

Conclusion

With the emergence of Blockchain, it has created a new path in advancement of our online technology creating a relationship between itself and social media. This two online networks have created a mutual influence. User on social media are entitled to sharing their views through many forms of medium and research has shown that social media also impacts the blockchain prices immensely and can even cause sudden uproars. This is so because with social media, there is a ready market for crypto-related information and a growing list of people meeting its demand on social media. One major factor blockchain craves if the mass adoption of it service. It has been a long-term goal for the blockchain industry and the main reasons for this is form the lack of government recognition, lack of understanding of the technology, and the high-risk factors have been credited as deterrents to mass adoption. Major social media influencers and Business Tycoons such as Elon Musk has helped in creating a path to normalize the use of crypto currency but his influence on social media especially on twitter has a strong force and impact on the volatile market of crypto currencies. The Power of Blockchain on Social Media is strong and has also served some major advantages such as Blockchain aids battle fake news. Spam bots and fake news are dominant. In conclusion Social media has always pursued to have an important and significant impact on various major industries such as the crypto currency and blockchain technology which also plays a very important role to the growth and popularity of blockchain.

References

Arnold, A. (2018). How Social Media Can Benefit From Blockchain Technology. Forbes. https://www.forbes.com/sites/andrewarnold/2018/05/29/how-social-media-can-benefit-from-blockchain-technology/?sh=2e2b75041018

Denton, J. (2022). Elon Musk Is a Crypto Fan. What the Twitter Deal Means for Bitcoin and Dogecoin. Barron’s. https://www.barrons.com/articles/twitter-bitcoin-dogecoin-51651087619

Elon Musk Buys Twitter: What This Means For Crypto. (2022). Bitcoinist.Com. https://bitcoinist.com/elon-musk-buys-social-media-crypto-twitter/

Geroni, D. (2021). The Role of Blockchain in Web 3.0. 101 Blockchains. https://101blockchains.com/blockchain-in-web-3-0/

How Social Media Affects Bitcoin’s Value. (2021). Colorado Springs Gazette. https://gazette.com/sponsored/how-social-media-affects-bitcoins-value/article_023d4388-53a4-11ec-9e9b-970404457d46.html

Hyder, S. (2021). How Social Media Is Helping Cryptocurrency Flourish: A Case Study With Jonathan Jadali. Forbes. https://www.forbes.com/sites/shamahyder/2020/11/23/how-social-media-is-helping-cryptocurrency-flourish/?sh=29332543717d

Mai, F., Shan, Z., Bai, Q., Wang, X., & Chiang, R. H. (2018). How does social media impact Bitcoin value? A test of the silent majority hypothesis. Journal of management information systems, 35(1), 19-52.

Oosterbaan, E. (2021). The Elon Effect: How Musk’s Tweets Move Crypto Markets. Coindesk. https://www.coindesk.com/layer2/culture-week/2021/12/14/the-elon-effect-how-musks-tweets-move-crypto-markets/

Rojas, N. (2018). Cryptocurrency: Social Media Influence and Digital Marketing Pitfalls. Influence&CO. https://blog.influenceandco.com/cryptocurrency-social-media-influence-and-digital-marketing-pitfalls

Tan, J. (2021). Social Media on the Blockchain (SocialFi) Could Be Key to Mass Adoption. Nasdaq. https://www.nasdaq.com/articles/social-media-on-the-blockchain-socialfi-could-be-key-to-mass-adoption

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