Mark Zuckerberg has had a rough month.
His woes started from the Cambridge Analytica fiasco, where it was discovered that user information was being mined by a third party data provider for political groups. Zuckerberg and Facebook have been criticized for their role as the leading data custodians for the digital world today.
However, for the crypto industry, the plunge in the stock price of Facebook promotes the argument: whether the cryptocurrency market is in a bubble or overheated.
So the question on everyone’s mind is “how is Facebook valued so high despite collecting user data and connecting them through messaging solely?”
Consumers never bat an eyelid when they discover that the company is worth $500 billion. It applies to WeChat, which offers a similar service for users in China and around the world.
If every social network is created equal with the same blend of technology, how do they produce so much value?
Marginal dissimilarities in technology
If naysayers examine their smartphones closely, they may discover that different apps offer the same communication experience with slight variations.
This implies that there is a huge market out there for slight variations or features especially when the main product is meant for expression.
These social networks have different values for the variety of ways they provide communication for their users and the unique makeup of their user base.
Some people use SnapChat to send pictures, WeChat to talk to people in Asia, and Signal for an encrypted and private experience.
Here, you can consider the features as rules governing interactions. Social networks like Twitter produce casual relationships while Facebook may produce familial relationships
Still, every network unlocks some value and offers unique access to some sort of contact. The only difference is the value placed on them by users and how it is used.
An argument for cryptos
It appears that a similar argument can apply to asset and money ownership since new protocols enable expression – blockchains and cryptocurrencies.
Applying this to blockchain, why can’t similar variations produce massive amounts of value?
Considering all these, Telegram’s Initial Coin Offering is beginning to look better. We expect other social networks to offer ICOs as well in the future.