The Relationship Between Cryptocurrency and Social Media
The price of Bitcoin has appreciated and new cryptocurrencies are being introduced to the Internet, which has caused new platforms for these currencies to emerge. This has resulted in developers examining the effects of social media on the value of cryptocurrency. With new platforms being introduced soon, what has been found out about how prices of currencies rise and fall as a result of interaction in places like Facebook, Twitter, and YouTube?
Cryptocurrency and Viral Content
Back in the early days of social media, users who posted viral content saw very little in return. The platforms gained revenue but the users, who were creating the content, found themselves not benefiting from their own creativity. Cryptocurrency was one of the ways developers saw to alleviate this trend and give creators power over their own content. They do this using a technique called “blockchain,” which provides a way to encrypt transactions in blocks so that each one is accounted for.
Blockchain in the Information Age
The combination of privacy and accountability that blockchain provides offers benefits for tracing just about anything, because the data is built in pieces and each piece is encrypted separately. The applications of this can be used for an assortment of business transactions and has been used to ensure the legality of products such as diamonds and pharmaceuticals. Cryptocurrency operates by adding blocks to the chain - the more data, the more currency there is to spread around. Every bit of social media is about posting data, adding more and more value overall. When content can earn a user money, it creates more incentive to post more content.
A Step Up
This is a new trend from previously, as developers look for ways to open cryptocurrency to wider usage. It was originally developed to be an online currency, but soon dataminers created value by investing in faster computers, and cryptocurrency was reserved for those with the fastest computers. 2018 promises changes to that, with a lot of new platforms going live and old standards, such Bitcoin, expanding services with the intention of opening more to everyday users.
The Social Aspect
Social media’s main purpose is to allow users to connect with one another, hoping for that viral content that gets millions of hits world over. Using Instagram, Reddit, or Facebook, users talk, and news travels. Values of cryptocurrency have been known to fluctuate as a result of online discussion about platforms and currencies. This goes both ways: good news raises value, and bad news lowers it. News of a hack can cause the value of a cryptocurrency to plummet, even if the breach was inconsequential.
Cryptocurrency is not without its hiccups. Since it is like investing in real estate or the stock market, there are the usual risks associated with such activity, but with the added dangers of Internet activity. Losing cryptocurrency can be as easy as forgetting a password, and hacks can wreak havoc on the value of a currency, or destroy it altogether. It is not in a position to replace fiat currency (money issued by a region or country), but broadening its use is making it easier for users to do business online and over national borders. Linking it to content posted on social media provides opportunities for content creators to benefit from the content they produce.
Cryptocurrency is the financial metaphor for the bridge the Internet provides our world. As it becomes accepted by more businesses and services in real-time, and more accessible to everyday users, enterprising developers will be looking for ways to integrate it into their platforms. As the economy moves into the information age, and digital content gains higher value, cryptocurrency will continue to grow in prominence. The expansion of social media makes all of this inevitable, providing the space where the data driving cryptocurrency can be stored, and bringing users together to share content that generates its value.
About the Author
Nick Rojas is a business consultant and writer who lives in Los Angeles. He has consulted small and medium-sized enterprises for over 20 years. He has contributed articles to Visual.ly, Entrepreneur and other leading industry publications. He is currently concentrating his marketing efforts in new artificial intelligence technology. You can follow him on Twitter @NickARojas.