Nowadays, social media platforms are fiercely competitive. As a result, social mining and other novel approaches to engagement have been developed by some platforms. Social mining makes reward systems more profitable by utilizing blockchain technology.
Especially in the modern Web3 era, this innovation has the potential to change how social media users interact online. However, how does social mining operate, and where can you currently locate it?
What Is Social Mining?
The process by which individuals on a social media platform earn tokens or rewards based on their activity or contribution to the community is referred to as "social mining" in terms of cryptocurrency. Utilizing blockchain technology to encourage content creation, user participation, engagement, and network influence are all parts of this strategy.
From like-based rewards on Facebook, Twitter, and Instagram to app and workplace gamification and achievement rewards on LinkedIn and Stack Overflow, social media platforms have had a variety of reward systems.
However, the users of these systems received no monetary benefit directly. Through token-based reward systems, social media participation can be converted into cash using blockchain technology.
How Does Social Mining Work?
Blockchain-enhanced social media platforms are typically where social mining (not to be confused with social media data mining) takes place. Smart contracts are used to monitor, verify, and tokenize the actions of users, who are urged to create, share, and interact with content. The following essentially facilitate the reward system:
- Tracking user actions: An inbuilt system is used to monitor and track activities such as content creation, shares, comments, and reactions within the platform. This data is used for the validation of activities that facilitates reward allocation.
- Scoring and reward calculation: Scores or rankings are then assigned to users based on their contribution and engagement levels. These scores are then used to calculate the rewards earned by each user
- Token Allocation: Smart contracts define the rules used in determining the criteria for earning tokens, how many tickets will be distributed to every active user in the pool, and the distribution mechanism.
- Token Distribution: Once the tokens are allocated, smart contracts distribute the tokens to eligible users. The tokens are sent directly to the users' wallets, ensuring transparency, immutability, and security of the transaction.
- Redemption and Exchange: Once users have tokens in their wallets they can redeem them either by exchanging them for other cryptocurrencies in exchange platforms, or using them within the platform for accessing premium features or buying goods and services.
- Governance and Updates: In addition to the monetary value of these tokens, users are allowed to participate in the decision-making process regarding the platform's future. Users with enough tokens can propose changes and influence the platform's developmental progress.
By giving users a sense of ownership over their content, social mining encourages interaction and content creation. This helps the platform and other community-driven initiatives achieve their goals by encouraging community engagement and organic growth. Users receive monetary compensation for their time and effort put into the platform.
Social Mining Projects
Social mining has become an essential component of several social media platforms' ecosystems. Some examples include:
1. Steemit
Steemit is a social media platform that uses a reward system to encourage content creation and engagement. It is built on the Steem blockchain. Posting, commenting, and upvoting content earn users STEEM tokens. The influence and engagement generated by each user determines the distribution of the rewards.
To use the STEEM they have earned on the platform, users can send them to an exchange platform, exchange them for another cryptocurrency, and then convert the STEEM to fiat currency. Steem's tokens were worth $0.156 each as of mid-June 2023, placing it among the top 300 cryptocurrencies by market capitalization.
2. HIVE
HIVE is a decentralized social media platform that emerged from a hard fork of Steem led by the community. This fork came after Justin Sun, the Tron founder, and the Steem community had been at odds for weeks. Hive uses social mining to encourage engagement, give users more control over their content, and create an environment that resists censorship.
Splinterlands and PeakD are just two of the hundreds of Web3 applications that make up the Hive ecosystem at the moment. Additionally, as of mid-June 2023, the Hive token was valued at $0.29 and had a market capitalization that ranked among the top 175 cryptocurrencies, surpassing Steemit.
3. YUP
YUP is a web3 social media platform that aggregates the best content from a variety of platforms into a single, cohesive feed. Members can easily curate and share content from various apps like Twitter and Farcaster by using a single app. Additionally, users can share anything they find interesting as a bookmark with other platform members.
The Yup protocol, which involves a community of active contributors coming to an agreement on decisions and actions, serves as the foundation for YUP. As a thank you for their valuable participation, these contributors receive YUP tokens. On Uniswap, members can freely exchange tokens for other cryptocurrencies.
4. Reddit
You've probably heard of Reddit, which is known as the internet's front page. Karma, upvotes, and awards have always been part of the social news aggregation, content rating, and discussion website's system of monetary rewards. The effort of users who make significant and influential contributions is rewarded.
However, Reddit took things to the next level in 2020 with the introduction of Reddit Moons. Reddit Moons are monetary ERC-20 tokens based on the Arbitrum layer-2 solution, in contrast to Karma credits, which have no monetary value. They are distributed to active members of r/CryptoCurrency, a specific subreddit, and can be exchanged for premium membership or Reddit Coins.
Benefits and Concerns of Social Mining
Social mining is likely to become a major component of social media as the internet develops. As more platforms compete for people's attention, they will likely incorporate rewarding systems with actual monetary value to encourage content creation and activity. However, there are benefits and drawbacks to consider here.
There are two core benefits of social mining; for the platform and users:
- Community growth: Social mining encourages users to be active on a social media platform. As users are rewarded for their contributions, they are more likely to create high-quality content, participate in discussions, and collaborate with others. The social media platform in return benefits from increased activity which creates opportunities for monetization.
- Empowerment and ownership: To the users, social mining shifts the power dynamics of social media by giving them a stake in the platform and a sense of ownership. Therefore, they can extract value from the time spent on social media. It also encourages a more decentralized and user-centric approach to social media, promoting a fairer and more inclusive ecosystem.
On the other hand, the design of social mining systems creates a number of concerns:
- Gaming of the system: Users are likely to manipulate the social mining system to earn rewards without genuine engagement or contribution. This could involve creating fake accounts or artificially inflating engagement metrics. Such actions undermine the integrity of the reward distribution process.
- Privacy and data ownership: Social mining platforms collect and analyze user data to determine token allocation. This raises questions about the privacy and security of the personal data collected as users have limited control over how it's used by the platform.
- Token value changes: Usually, the crypto tokens rewarded in social mining are of low value. But this value, however low, is volatile and subject to change, as are almost all cryptocurrencies. Today a token might be worth something, and tomorrow, its value may crash. This makes it a risky asset to own.
The improvement of member socialization is the primary objective of social mining as a whole. It does a good job of getting people to interact, but it can also attract bad actors and cause trust issues. The only things that can stand the test of time are systems made to deal with these problems.
Social Mining Allows Platforms to Give Back
Due to the fact that it encourages user engagement, empowers users, and encourages the growth of communities, social mining has the potential to be a beneficial application of cryptocurrency. However, a platform's ability to effectively use social mining depends on whether it addresses issues such as manipulation and privacy. A social mining system that is well-designed and places an emphasis on user ownership, transparency, and fairness can reap the benefits of cryptocurrency while reducing the risks.
