Could ‘community apps’ built on blockchain solve Facebook’s existential crisis?

“We came here for the friends.” In the face of a reputation crisis, Facebook is investing heavily in a nationwide advertising campaign to remind us that it is a community first, a business second.

The campaign has gone so far as to recognize that spam, clickbait, fake news, data misuse, and political scandal have eroded public trust in the social network’s ability to police and protect its users. Far from its much-professed community values, Facebook’s treasure trove of personal data has been abused – both knowingly and unknowingly – to fundamentally undermine the trust people place in the platform.

Why, then, should Facebook turn to blockchain, a technology that has staggered from one reputation crisis to another – to rebuild trust in its ability to foster communities? While it may sound far-fetched, Facebook recently announced that David Marcus, formerly head of Messenger, would lead a new blockchain research unit supported by several key Instagram executives, including VP of Engineering James Everingham and VP of Product Kevin Weil.

The simple answer is that blockchain – and the distributed ledger technology that underpins it – is rooted in community. Every distributed ledger technology requires a network of developers to build the product together, run it together and, crucially, govern it together.

You might not think of blockchain in this way — all the talk of ICOs, block sizes, forks, and cryptocurrency wallets can obscure the community values of blockchain.

But if we rebrand distributed ledger technology as “community apps” – the ability of the technology to distribute governance and trust throughout a network of users — we could enable consumers to connect with a vision of community.

“Normal” communities simply do not scale – the classic economic problem of the “tragedy of the commons” shows that there is a tipping point beyond which self-regulation by individuals begins to damage the health of the community. Wikipedia has suffered from this issue. This is where the technological breakthrough that blockchain tech enables becomes evident: It allows community governance to scale.

Where better to apply this vision than Facebook. One of the critical issues facing the social network has been its inability to self-govern and self-regulate – the scale of the task in front of Facebook became apparent when it went on a prolific hiring spree to attempt to police the content being posted to its site. Between May 2017 and February 2018, Facebook hired 3,000 content moderators – equivalent to Twitter’s entire headcount.

Estimates suggest that around 147,000 photos are uploaded to Facebook every minute – no single network of content moderators could ever begin to contend with that scale. In its current model, Facebook attempts to address widespread misuse of its platform through relying on a sense of citizenship alone – and some AI algorithms – to motivate users to report inappropriate content, which is then passed along to the army of moderators.

Through community apps, Facebook could create a governance system that rewards users for reporting malicious posts, punishes abusers of the platform, and imposes weights against anyone seeking to manipulate the system. Such incentive-based governance systems have worked for Bitcoin, Ethereum and other blockchain communities, where distributed voting mechanisms reward appropriate actions and discipline misuse of votes.

The power of community apps is its ability to move control of applications and data from a single party – in this case Facebook – to a network of users. Instead of having one central intermediary extracting value from its trusted status, you build upon distributed, or community, trust.

Joe Gebbia, cofounder of Airbnb, once commented that his platform’s success was proof that “hospitality, generosity, and the simple act of trust between strangers can go a long way.” He was wrong – the trust is not between strangers. The hosts and the guests using Airbnb put their trust in the platform first, the people and community second.

Community apps built on the blockchain could begin to transform this model that has dominated the rise of platforms, shifting the trust from the platform to the community. Perhaps then we could begin to remind ourselves that we came here for the friends.

Eyal Malinger, Investment Director, Beringea, the transatlantic venture capital investor.