Reddit Boycott and AI/Crypto Connection.
Reddit is facing a difficult situation. On one hand, the emergence of artificial intelligence technology threatens to disrupt how people find information online. On the other hand, there is a massive boycott in reaction to a recent move by the social media platform to start charging for its application programming interfaces (APIs), which allow access to the site and its data. Reddit has 57 million daily users, but is finding that being a “tech darling” is not easy, even after successful scaling. In fact, the current situation only highlights that Reddit’s foundation – essentially, advertising and data extraction – was always soft.
A mass protest is currently underway on Reddit, spurred by developers who are getting burned by the recent strategic decision to start charging for APIs. Hundreds of subreddits have taken themselves “private” and several third-party apps are turning their backs on the website, which is looking to go public sometime this year.
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Reddit is known as the “homepage of the internet” and allows people to aggregate news and memes, and form communities to discuss anything. It has some of the largest subreddits with tens of millions of engaged users. However, with the rise of “large language models” (LLMs) by the likes of ChatGPT, which are built and can only improve by ingesting vast quantities of data, Reddit’s relationship with web browsers has been turned on its head.
Reddit CEO Steve Huffman stated in a Q&A that the company was rethinking its stance of giving “its corpus of data” away for free. Now, it will charge app developers for access that used to be free, and it appears that a lot of information posted by users over the years will be packaged up and sold. There are several reasons for this change in strategy, including Reddit’s struggle with profitability, Elon Musk’s decision to charge for Twitter’s APIs, and the fact that AI chatbots grown with Reddit’s data are beginning to disrupt the site’s services.
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The current protest on Reddit is a reaction to the company’s attempts to eke out new revenues and defend itself against the Robot Swarm, but the protesters are also angry about the potential impact on the customization of Reddit. Third-party apps and volunteer moderators are also affected by the decision to charge for APIs.
Dear reader of The Node, how does all of this relate to cryptocurrency and how can it help you make money? Depending on how things play out, it could have a few implications for crypto as a social movement. The ability for a company to make decisions that significantly affect users is a major plus for a movement that advocates for transparency, open access, and user control. Perhaps an enterprising person could build the next Reddit, but decentralized.
However, the situation could also be detrimental to crypto – if the boycott is successful. Platforms like Ethereum want to be the foundation of a better web, which requires people to build and maintain alternative applications and for users to migrate over, starting fresh on a new social network. This is done for the hope that things will be better if people have a share in the platform. People might find that blockades are better than blockchains for getting what they want. Mass protests are becoming more common in America and could be used against companies like Facebook and Google to improve things like privacy standards, which would be easier than trying to outcompete them in the platform wars.
If the crypto world wants to nudge the wider tech scene towards adopting more of its tenets, it turns out the power was always in its hands. By and large, however, most people do not care about the decisions made by their favorite internet platforms and are happy to trade their data for access to a free service. This isn’t to say that crypto is unnecessary. What the Reddit situation also reveals is the perverse incentives baked into platform capitalism. Except for a handful of successful examples, the dream that advertising could pay for web services to remain free forever was likely a sham. Reddit, despite its tens of millions of daily users, may never consistently turn a profit.
Crypto offers an alternative as it requires buy-in from users and makes the economic costs of online interactions explicit. This system may not fare any better, but it may be nice to have the option of opting out. This is more than a boycott than a quiet revolution, which wants to empower users to pay their own way. It may become more important as even more of your data goes to AIs, which will inevitably be trained to show you exactly the right ad at exactly the right time.
See also: Reddit Avatars Token Minting Climbs to Record High