Elon Musk has made his intention regarding Twitter very clear. He seeks to build the largest financial institution in the world. This was a desire he reiterated in a recent interview.
As we covered in the past, this is something that provides a valuable lesson along with model for Hive. At this point, we can draw a number of parallels between the two, although Twitter is thousands of times larger.
The merging of social media and finance is on. Elon is one who is going down this path. He is very open about it and others, so far, are falling behind.
To illustrate, Twitter had around 250 million users. As a contrast, Chase, the largest US bank by assets, has 66 million accounts. Twitter is 4 times the size based upon this metric.
Musk's point is that Twitter needs to provide options to people with "one click". This makes sense. He also believes that PayPal is part of the way, offering payments. The next step is after that is debt. In the past we mentioned the idea of being able to get mortgages through Twitter.
All of this could align with Hive.
Before going into that, let us focus upon the social media aspect first.
Attention Economy
This was a phrase that was used a great deal in the earlier days of cryptocurrency. Everyone was talking about the "attention economy" and how crypto networks could dominate. So far, this is lacking.
Twitter is not the largest social media network by users. The Facebook family is far superior in numbers as is YouTube. Musk did point out, however, that number of users is not the most important metric. How much time do they spend on the platform?
According to what he said, Twitter has 130 million hours of viewing per day. With around 250 million users, this is roughly 30 minutes per user daily. He claims this is far above what other platforms have.
He also went into the idea of monetizing each hour. The numbers tossed out were about 5 cents per hour, mostly from advertising. His goal is to get that to 20 or 25 cents.
Thus, the question is how much attention are you capturing?
Obviously, this is where not only are total users important, but also superusers.
Ultimately, the attention is what allows for the monetization.
Financial Services
The next development is to financialize the platform. Twitter is in the process of filing all the application to be authorized as a payment system. Fortunately, this is something that Hive does not require.
When you have a consistent user base, giving them more options is of benefit. It is taking the attention and pushing it even further. Why should Twitter have people go to Square or PayPal to make payments? The idea is to handle this directly from that platform.
Of course, this is just a beginning. The real money comes from developing the "Everything App". Intruding upon the services commonly addressed by the major financial institutions is completely disruptive. It is also a much larger market than social media.
This is why cryptocurrency, at least in theory, is such a threat. Decentralized finance (DeFi) could do a number on the financial arena. We already saw the damage that FinTech did to the established banks over the last couple decades. Creating a completely new financial mechanism could put this on steroids.
Musk, naturally, is not interested in this. His platform is, and always will be, centralized. Nevertheless, the model for other services such as mortgages, car loans, and other forms of debt are a major step forward. There is also the potential for securities being moved through a platform. For DeFi, this is the world of synthetic assets.
We see how Kraken is looking to disrupt the banking industry by entering that realm with a focus upon cryptocurrency. Again, this is just another spin on basically the same thing.
Hive Setting Up Decentralized Services
In an upcoming article, we are going to revisit the idea of the Hive Financial Network in some greater detail. Through this process, we will seek to further lay the groundwork for the establishment of such a network on Hive.
Looking at what Musk is trying to do, his starting point is already accomplished here. Hive already is a payment system and has built in wallets. This will have to be constructed.
Also, cryptocurrency starts to move things to a different level. When it comes to lending, there are assets already in cryptocurrency that can be used as collateral. This gets another kick forward if we start to produce more such as Hive bonds. Suddenly the lending platform on Hive is based upon an asset based that is being enhanced through the social media network effect. Other than Twitter stock, which is private at this point, how would Musk do that on his platform?
He cannot.
At the same time, we have a stablecoin that we can construct this entire network around. Not only does this offer the medium of exchange, unit of account, and pairings that are needed, it also enhances the value of the assets tied to this ecosystem, allowing for further expansion of the financial services.
Musk's vision is clear. So should ours. There is nothing he is proposing that cannot be done on Hive. Right now, the biggest difference is numbers. From a development standpoint, Web 3.0 is actually further ahead in the combination of these two areas, social media and finance, since the wallet and payment systems are already in place.
Social media as a feeder system in a financial network offering all kinds of products and services, all of which are accessible through assets that derive value from the network effect provided by the social media activities.
Are you starting to see how powerful this is.
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