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Minds, the crypto social network with a focus on encryption and privacy, has raised $10 million from the tech freedom organization Futo.
Owned by Yahoo Games founder and WhatsApp seed investor Eron Wolf, Futo is dedicated to tech and policies that give the control of computers back to the people. While other social networks mine your data for ad purposes, Minds targets user privacy, and it is based on open source technology.
New York-based Minds is a crypto social network with an instant messaging chat app that lets people communicate with each other in real time. It has grown to more than 14 million since it received a funding round in October 2018.
“We have been fully focused on building an open-source encrypted, decentralized alternative to mainstream social networks. It’s always been shocking to me that none of them are open source,” Minds CEO and founder Bill Ottman said. “And it seems like there’s a pattern emerging with the lack of transparency and surveillance and abuse of users freedoms. So from the beginning, I always considered it inevitability that an open-source, decentralized social network was going to emerge, similar to how open source dominated operating systems with Linux.”
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He added, “Based on everything we’re seeing in crypto, even if you look at Mozilla, open source will eat software in the same way that software is eating everything. And so I thought we might as well do it. I mean, if something is going to happen, I’m going to try to make it happen.”
The new round of financing capitalizes on previous funding from Medici Ventures, the wholly owned blockchain subsidiary of Overstock.com that recently partnered with Pelion Ventures. The funds will be used to support the company’s mission of building the world’s largest crypto social network and putting control back into users’ hands.
Many users are attracted to its game-like features that motivate participation and reward users with the Ethereum-minted Minds token. The gamification of the social network has led it to become particularly popular in the gaming, crypto, and anime communities.
In April, the network made a series of enhancements to the Mind token — highlighted by decentralized finance (DeFi) integrations — to help bridge the gap between traditional social media and decentralized Web3 infrastructure and provide users with more ownership over their digital identity and data.
Earlier this month, Minds also introduced Minds Chat, a decentralized, end-to-end encrypted global communications app with secure video conferencing and file-sharing.
Minds CEO Ottman said in an interview with GamesBeat that Minds gives users control through its free and open source software, decentralization, privacy, and synchronized economic incentives.
Taking a stand
Right now, digital rights, freedom of expression, and privacy are in peril due to the secrecy, censorship, and surveillance of big tech, Ottman said.
Wolf was a longtime software programmer who started Yahoo Games in 1997 and spent 18 years in Silicon Valley working at tech companies. He found that the incentives for entrepreneurs are “completely out of whack” when it comes to doing things that are good for society. At Futo, he favors investing in “the little guy competing against the big guy,” and that’s one of the reasons he invested in Minds.
On top of that, he said, “I really trust Bill and what Bill is about. He is about being transparent to the user, not abusing the user. One of the things that’s important to me is that he not collude, like he’s competing with Facebook and Twitter.”
Wolf said his earlier ventures made him wealthy and able to give back to society through technology with a social purpose. He believes Minds can help people escape the tech oligopoly. And he doesn’t want Minds to sell to one of the tech giants, because that would probably result in the users being “thrown under the bus.”
“Every single time that happens, the users wind up with worse products after that, and they get abused more,” Wolf said. “So at the end of the day, I’m trying to identify” entrepreneurs with more integrity.
He said he is unhappy with the “destruction” wrought by technology monopolists and sellout entrepreneurs. The world needs more companies like Minds dedicated to independence, transparency, user sovereignty, and freedom of speech, he said.
“We can’t let the tech oligopoly control us through the devices in our pockets,” Wolf said. “That’s kind of where we’re headed, or implanted in our brains or whatever, you know, wherever it’s going. The individual needs to have sovereignty over their tech.”
The MindsChat feature launched in May. MindsChat federates with the Matrix protocol, an open standard for secure, decentralized, real-time communication networks with end-to-end (E2E) encryption embedded.
Due to the Matrix’s interoperability specifications, users can contact others both within its global ecosystem and outside, via bridges, to networks like Slack, Signal, Twitter, and more. MindsChat is currently available to anyone with Canary updates turned on.
Minds started in 2015, and it grew up in parallel with cryptocurrency. Because it focused on encrypting user messages, it became popular with people who valued their privacy, such as those in the cryptocurrency crowd. You could say that it was a magnet for drug users, criminals, terrorists, and cyber hackers. But Ottman said the network isn’t built for criminals. It’s built to ensure that people have freedom and don’t have to worry about mandated back doors that could compromise everyone’s safety and security.
“We would definitely be on the end of the spectrum that puts end-to-end encryption and privacy first by default,” Ottman said. “But I definitely do not think that that means that we have any desire to help any kind of illicit activity. I don’t think that because you put privacy first means that you’re supporting that, because actually, if you compromise, if you allow backdoor encryption, or if you just don’t have encryption , then you’re actually creating a higher likelihood of another type of crime occurring. You make everyone less safe when you when you do that. ”
In 2017, the company migrated to a gamified reward system, where users were rewarded for the more they used the social network.
The company is still a centralized company, but it is heading in the direction of being more decentralized, Ottman said. It is not, however, a decentralized autonomous organization (DAO).
The company has a lot of users in Thailand and Vietnam. Artists, photographers, filmmakers, and journalists use Minds in addition to gamers and crypto fans. One of the things that is helping with the popularity of Minds is that cryptocurrency is going mainstream, he said.
“Independent media is arguably our largest demographic, because we have a free speech policy and we protect their privacy, which matters a lot to journalists,” Ottman said.
“It has similar functionality to Telegram, Discord, and Messenger. And it’s fully open source, decentralized, end to end encrypted,” he said.
The company employs about 15 people, not counting open source community developers.
Instead of making money through mining user data and serving people ads, Minds offers recurring memberships with its Minds Plus premium accounts, which has bonus features. And it shares the Minds Plus revenue with content creators who produce the most popular content on the social network.
“We have like thousands of members of Minds Plus now, and it’s actually going amazing this year,” Ottman said. “I think that people really do want to support networks that respect their freedom. And I think people are willing to pay for subscription products. We do have advertising, but it is not the core of the revenue and it is not surveillance advertising.”
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