The relationship between cryptocurrencies and social media
The price of Bitcoin has increased and new cryptocurrencies are being launched on the Internet, which has led to the emergence of new platforms for these currencies. This has prompted developers to study the impact of social media on the value of cryptocurrencies. With the imminent launch of new platforms, what has been discovered about the way currency prices rise and fall as a result of interaction on places like Facebook, Twitter and YouTube?
Cryptocurrencies and viral content
In the early days of social media, users who posted viral content received very little in return. The platforms generated revenue, but the users who created the content did not benefit from their creativity. Cryptocurrencies were one of the ways developers thought to alleviate this trend and give creators power over their content. To do this, they use a technology called blockchain, which allows transactions to be encrypted in blocks so that every single transaction is traceable.
Blockchain in the information age
The combination of privacy and accountability that blockchain offers offers advantages for tracking anything, as data is built in parts and each part is encrypted separately. Applications can be used for a range of commercial transactions and have been used to ensure the legality of products such as diamonds and pharmaceuticals. Cryptocurrencies work by adding blocks to the chain: the more data there is, the more currency can be distributed. All social media is based on publishing data and creating more and more value. If a user can earn money from content, this creates a greater incentive to publish more content.
A step forward
This is a new trend as developers look for ways to open up cryptocurrencies to wider use. Originally, cryptocurrencies were developed as an online currency, but soon privacy advocates created value by investing in faster computers, and cryptocurrencies were reserved for those who owned the fastest computers. 2018 promises to change this, with the launch of many new platforms and the expansion of old standards like Bitcoin to make them accessible to more everyday users.
The social aspect
The main purpose of social media is for users to connect with each other in the hope of viral content that gets millions of views worldwide. On Instagram, Reddit or Facebook, users share and messages spread. It is well known that the value of cryptocurrencies fluctuates due to online discussions on platforms and currencies. This happens both ways: good news increases the value, bad news decreases it. News of a hack can cause the value of a cryptocurrency to plummet, even if the security breach was insignificant.
A glimpse into the future
Cryptocurrencies are not without their problems. As an investment in real estate or the stock market, there are the usual risks associated with such assets, but with the added dangers of Internet activity. Losing cryptocurrencies can be as simple as forgetting a password, and hackers can seriously compromise the value of a currency or even destroy it altogether. Cryptocurrencies cannot replace fiat currencies (money issued by a region or country), but the expansion of their use makes it easier for users to transact online and across borders. Linking to content posted on social media offers content creators the opportunity to profit from the content they produce.
Cryptocurrencies are a financial metaphor for the bridge that the Internet provides to our world. As they are accepted by more and more businesses and services in real time and become more accessible to ordinary users, enterprising developers will look for ways to integrate them into their platforms. As the economy enters the information age and digital content gains in value, cryptocurrencies will continue to grow in importance. The proliferation of social media makes this inevitable, as it provides the space to store the data that powers cryptocurrencies and brings users together to share the content that generates their value.
