Twitter Investigating Blockchain Solutions

On Wednesday, Twitter CEO Jack Dorsey announced via a series of tweets that the social media platform was creating a five-person team to develop an open-source, decentralized standard for social media, with Twitter slated to become the first client of the project. Shares were up 2.2% on Wednesday in response to the news, but gave back gains on Thursday, falling 0.8%.

Dorsey said the project will be named “Bluesky” and that the team will either find a compatible existing blockchain project to use as a template, or they will create the standard from scratch. In either case, Dorsey acknowledged that the project will take several years to create a viable product.

Some have questioned whether such a standard is going to benefit Twitter as a business, saying it would lead to a power shift away from the platform, and decrease its ability to monetize.

On the other hand, it seems such a shift would benefit Twitter as it removes the responsibility of hosting and managing content. By focusing on recommendation algorithms Twitter can deflect some of their content moderation problems. In the blockchain model Twitter would handle content discovery, similar to Google searches, rather than hosting and managing the content themselves.

Dorsey has already facilitated several blockchain-friendly moves, such as adding support for Bitcoin to the Square mobile app in late 2017. This has led to the launch of Square Crypto in March, which is a five-person team working on improving the Bitcoin ecosystem within Twitter.

Dorsey obviously believes decentralization is the future, but whether it helps Twitter remains to be seen.