last updated 2023-10-30 Main Menu- Mastering Evrmore

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EvrLight and Nostr4Evr
*EvrLight uses Evrmore as Layer-1 for diverse Lightning assets like Bitcoin is Layer-1 for Lightning money*

Thoughts on Social Commerce

The term Social Commerce refers to the increasing integration of social media into the buying and selling of goods. In the simplest sense it refers to changes taking place in consumer sales. The financial power of marketing and advertising should not be undervalued. They paid for the entire history of free broadcast radio and television, and today they power both Google/Alphabet and Facebook/Meta.

Social Commerce has global relevance, just as social media and Distributed Finance do. That is why the wealthiest man in the world is interested in spending his time working on Twitter/X. Elon Musk has explained that his goal for Twitter/X is to follow the example of WeChat, the large Chinese social media platform. WeChat is owned by China's Tencent Holdings Ltd, which began in 1998 building a social media application. The company has since then branched into other related businesses, especially video games, but WeChat is still key to its success. Tencent has a current marketcap of about $400 billion. WeChat's success has come from being the first of a growing number of social media platforms which tightly integrates a payment platform and in-app purchases. The social commerce market has developed farther in China than it has in the western world, but it is expected to grow larger everywhere.

Long term, it is thought that a Social Commerce megacompany could be like Facebook/Meta + Paypal + Amazon.

McKinsey & Company's forecast for Social Commerce is HERE
A report from Goldman Sachs is available HERE

Zapping on Nostr is an amazing way to instantly send money to another Nostr user. But this is only the tip of the iceberg of what Nostr can accomplish using peer-to-peer decentralized technology.  Social Commerce as predicted by today's mainstream pundit is a dystopian vision in which Fortune 500 companies build shopping carts and checkout software and even more tracking into traditional centralized social media platforms so that people can click on advertisements to accomplish one-click in-app purchasing. In truth, it is much more important that next-generation social media should empower individuals to maximize their potential without being abused by the corporate social media giants. Uncensorable communications and uncensorable flexible peer-to-peer multi-asset payments are critical to fair Social Commerce. Zaps are great for tipping content creators, but creators need livable dependable income. Sales of live event tickets, subscriptions, coupons, badges, authentication tokens, memes, and NFTs are much more powerful ways to provide economic support.

NFTs have gotten a bad public image because of the Ethereum community's activities tying tokens to jpegs of bored apes, which is pointless since the jpeg can trivially be copied anyway. But NFTs have real value. A ticket to an in-person event with an assigned seat number, or a subscription to a certain number of minutes of streaming "back-stage" or "privileged insider" access are natural NFTs since each token is associated with unique data. The access which they provide is best implemented as an NFT rather than just being tied to a username/password because the NFT can be trade-able. A music enthusiast will be willing to spend more money on a concert ticket or subscription to their favorite musician if they know that they can resell it if their schedule or their taste in music changes. If the NFT is tied to an address which is also the purchaser's identity as could be done in Nostr, then the buyer would be very unlikely to defeat the NFT controls by sharing his private key. Moreover, such tickets and subscriptions are obviously not securities in the legal sense- artist, bloggers and newsletter writers are free to sell as many tickets and subscriptions to their work as their followers would like to purchase.

From an even wider perspective, Social Commerce may also include the integration of social media into the world of finance as exemplified by companies like Robinhood. The opportunities there are even vastly larger. We hope that Bitcoin will someday become the world's money. But money in the sense of cash is a small portion of global wealth compared to stock markets, the debt market, and especially derivatives.

For an insightful visualization of the relative sizes of different types of wealth see HERE

A few comments about adapting the available technologies to address real-world markets:

In the cryptocurrency community, we are taught to be super sensitive to security. The purists will say to never reuse public keys, or to protect every Satoshi behind a multisig address. Security is vitally important. But the safeguards must be chosen to match the situation, lest they unnecessarily complicate the use case.

A few points in particular are worthy of mention:
  • For many assets of low or medium value, it is convenient and perfectly reasonable to tie them to a single key. That is particularly useful when there is a key pair which the person uses as their identity, as is done with Nostr. Doing so makes it easy to send items to those people without knowing anything about them and it also simplifies item storage for them.
  • In those cases when the user does generate multiple keys from a seed, it is often ok to reuse the same keys across different blockchains or applications. That makes it possible for a person to have a single wallet/keychain which serves multiple blockchains while also easily preserving the relationship between related digital items which reside on different chains.

Of course, these are not practices which should be applied to your primary financial accounts, which should remain in air-gapped cold wallets with unique addresses. But for day-to-day items tied to keys, the security model can be loosened to match the value of the item.

Similarly, it is important to understand transaction fees in context. When selling tickets and subscriptions, the buyer will value the ability to resell what they are buying. But the option to do so will most likely be exercised only a small number of times. Therefore, even though bundling an asset with a small amount of EVR to cover future anticipated mining fees limits the number of transactions which can be supported without extra effort, for most casual use cases that solution will be sufficient. Day traders have different needs and can use a native Evrmore wallet or a service which supplements their bundled EVR.

"In Theory There Is No Difference Between Theory and Practice, While In Practice There Is"

Copyright 2022,2023 by Hans Schmidt
Note: this is in no way related to the wonderful book "Mastering Bitcoin" by Andreas Antonopoulos