Elon Musk shocked the world when he tendered an unsolicited offer to buy Twitter on April 14th. His agreement to purchase the company 11 days later sent yet another shockwave through media and cultural circles. Most of the celebration/angst has centered on politics, but Elon’s anticipated changes could materially shift the landscape of Crypto’s most beloved communication platform. Will these changes be positive, or will a liberalized moderation strategy and structural headwinds sink the enterprise and it’s Crypto Twitter with it?
Elon Musk wants Fewer bots and paid checkmarks, more opportunity
One of Elon Musk’s primary frustrations with twitter is the cloud of bots swarming the tweets of notable persons, himself included. Fake accounts, some managing to procure blue checkmarks, replay to comments in hopes of snagging an oblivious victim. Crypto is no different. Anyone who’s replied to Metamask or Brian Armstrong on twitter knows what the bot swarm is like. If Elon Cracks down on bots, this could remove one of the biggest reputational risks to crypto by minimizing access points for automated scams.
Paid checkmarks may also benefit crypto. The current verification system has a major subjective component. To this day, there are estimated to be less then half a million verified twitter users creating an aura of status and exclusivity. Unfortunately this means legitimate, unverified crypto personalities are lumped in with unsavory actors. If identity verification is opened up to anyone willing to pay, legitimate accounts will be easy to identify and further limit predatory accounts.
Risks abound in profitability, content moderation and Dogecoin
The purchase price of twitter raised many eyebrows, particularly because the platform is not profitable. The technical details of his purchase also forced the company to take on debt. The result is a company losing an estimated $4 Million per day. Elon’s penchant for controversy has not helped the cash flow potential in the short term. Many advertising clients have put their spending on hold. If Twitter cannot right the ship, service will likely degrade. With that, crypto may lose the one communication platform where it has monolithic presence.
Content moderation is also a wildcard. While bot crackdowns and paid verification would objectively improve user experience, the slashed headcount associated with moderation may increase the number of conventional scammers in the crypto space. This risk is probably marginal, given how saturated the platform is with grift accounts, but it’s worth noting the effect of reduced moderation.
Last, but certainly far from least, is Elon Musk himself. He’s a maverick, a lose cannon, known for defying convention and tradition. It’s why you either love him or hate him. His Dogecoin antics in particular have likely done more to both help and harm crypto adoption. Twitter has always been his platform of choice, but we don’t know what he will do now with complete control.
No matter how you spin it, it’s hard to make the case Elon Musk’s purchase of twitter will have clearly defined Impacts for crypto. It’s possible his desired reforms will make the platform stronger, but there are so many short term headwinds to overcome. At the very least, this whole episode is another example as to why decentralization matters. The Crypto community’s overreliance on twitter is another risk to the ecosystem. Like other single points of failure, this must be mitigated with haste.