Tokenized Social Network

Facebook has now officially announced their entry into blockchains, led by former head of FB Messenger and CEO of PayPal David Marcus. It is time to debate why all online communities may need to tokenize in the future.

Running a community is not free

While the cost of cloud computing has lowered, the cost of running a community hasn’t. With the competition for user attention at all time high, acquiring and retaining members is expensive. The global competition for developer talent combined with the rise of artificial intelligence has increased the cost of developing a competitive set of features significantly.

Assuming an average user acquisition cost of $1.00-1.50, yearly server costs of $0.50-$1.00 per user and a 12 month average lifetime of a member, you have to pay $2 million for every million members you serve before any staff and development costs.

It takes years of development and a market leader status to achieve a low churn and a loyal fan base. Take Facebook as an example. By dominating the social networking space for a decade, they have achieved 10x smaller churn than any of their competitors.