Discover more from The Cryptonite Weekly Rap
We keep paying Zuck to creep into our lives—42 US States aren't so happy about it—are you?
Facebook’s revenue surges to $34B along with ad recovery, and stock is up 150% in ’23 by playing ball like it’s still the ’00s.
“You can hold your lover on the tip of your finger and your friends in the palm of your hand.”
Social networking demand
I’m going to skip to the epilogue. When I was about 16 or 17 years old, my mother told me that ‘you can hold your lover on the tip of your finger and your friends in the palm of your hand.’ Unbeknownst to me at the time, she was reciting the first principle of healthy social networking.
Our social networking life is really not that complicated; we only make it that way by choice with lots of pushing and shoving from Big Tech algorithms.
If you apply Mom’s principal, why would we or our kids need to have more than 100 connections on Instagram, Facebook, Snap, or TikTok? Those 100 would include close friends, extended family, and other cool cats you might have met along the way at camp, club sports, or traveling. You could throw in some brands you like, hobbies and entertainment-related content, athletes, musicians, and actors. Okay, now we are down to 200, and—Voilà!—we have more of our precious time on our hands, our mental health is intact (or at least less impaired), and our kids are less susceptible to lurkers and creepers.
Why would we or our kids be motivated to have more than 200 connections? We all know the answers—exhibitionism and false pride, that is, caring about looking good in front of our peers. The cynics would say it’s about ‘being famous with no talent.’
I think the hardest pill to swallow as a parent is Snapchat. There’s a lot of very naughty things going on in the world of disappearing snaps. Snap also maintains an online pimping service akin to OnlyFans. For all intents and purposes, Snap is the devil’s playland full of temptation and little parent visibility. There is also a whole vulgar and pornographic face of TikTok where some kids lip-sync highly sexualized and demeaning rap bars and other lyrics, leaving one longing for the days of the Beastie Boys and Nas.
If I had a magic wand, Snap, Instagram, and TikTok would disappear, and kids would focus on maintaining their 200 connections on the Instagram-like decentralized app with their parents watching everything. Kids could still preserve the Secret Garden they deserve in their DMs.
I say Instagram-like because, according to investigations by The Wall Street Journal and researchers at Stanford University and the University of Massachusetts Amherst (and another investigative post by The Guardian), Instagram connects to a vast pedophile network that ‘guides users to communities to purchase underage sex content.’ In the typical dispassionate manner of their fearless leader, the company responds with an ‘improving internal controls’ statement—thereby admitting the collective research is accurate.
Still, it does not take more than a quick perusal to see nothing has changed, as ‘reels’ of provocatively dressed underage teens are everywhere—many of whom appear to be AI-generated.
Bringing up adults
Unfortunately, we must now assume our kids will pretty much see and hear about everything by the time they’re 14. Filtering computers and phones and controlling online and app time on their devices can go a long way. My approach is the same as my father’s, who was a family doctor at Stanford: talk straight and treat them as adults. Explain the good-to-bad spectrums of all potential addictions, from online time to food, sex, and drugs.
I explain that if you smoke weed that has over 30% THC before you are 25, you are going to lose IQ points; if you save yourself for marriage, you will avoid surprise pregnancies and STDs; if you drink that energy drink, you will have a sugar crash in a couple of hours. It’s a constant education (if not a re-education from what they learn at school). Their life is theirs, not mine, and therefore, the choices they make are theirs to decide, but how they come down will affect their sense of peace and the quality of their life.
When I look at my children and their friends (ages 17 and 19), it gives me hope that most kids are making the right decisions. At least on Instagram, they aren’t trying to be too ‘famous’ via exhibition; in fact, they are pretty minimalistic about posting, usually to celebrate birthdays and share new experiences. But then, again, there is Snap and Zuck behind the AI console. 😳
Unfortunately for Zuck, we are not the only ones having this conversation. Last week, Meta Platforms and its Instagram group were hit by a bombshell lawsuit filed by thirty-three US States. The filing accuses Zuck’s empire of ‘intentionally and profoundly altering the psychological and social realities of a generation of young Americans’ by ‘ensnaring’ them in addictive cycles through its targeted algorithms for profit motives.
The lawsuit also alleges that Meta violated a law banning the collection of data on children under the age of 13. 😳
States involved in the suit: Arizona, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania. Rhode Island, South Carolina, South Dakota, Virginia, Washington, West Virginia and Wisconsin.
‘Research has shown that young people’s use of Meta’s social media platforms is associated with depression, anxiety, insomnia, interference with education and daily life, and many other negative outcomes,’ the document reads. Meta released documents in 2021 that showed that even the company had internal data showing that Instagram was addictive and worsened body image issues for some teen girls.
These accusations are well-supported and brutally accurate. Nine more states are expected to file similar lawsuits on Tuesday, bringing the total number to 42.
Meta’s ‘four-pronged attack on young people’
Creating ‘a business model focused on maximizing young users’ time and attention spent on its platforms.
Second, Meta ‘designed and deployed harmful and psychologically manipulative product features to induce young users’ compulsive and extended use.’
Third, it ‘routinely publishes misleading reports boasting a deceptively low incidence of user harms.’
Finally, Meta is accused of ‘refusing to abandon its use of known harmful features’ against the guidance of ‘overwhelming internal research and independent analysis’ - instead redoubling efforts to ‘misrepresent, conceal and downplay’ the impact of features on youth mental health.
The suit goes on to allege that Meta is seeking to expand these harmful practices into the metaverse, including the company's Horizon Worlds platform as well as the communications apps WhatsApp and Messenger.
Zuck has this amoral, lack of empathy vibe about him that gets played out in his businesses. Shortly after Zuck bought WhatsApp, the two founders, Brian Acton and Jan Koum, left Facebook, purportedly due to Zuck’s move to use WhatsApp’s personal data and weaken its encryption—a direct violation of the founding premise of WhatsApp. There is a well-documented chorus of former Facebook executives critical of Facebook who have endorsed the #DeleteFacebook social media campaign.
My personal interactions with Zuck were when he was in his early 20s. At the time, his tenacity and willingness to put in the work was evident. At the same time, he was clearly more like the chess-playing Bill Gates than the pioneering artist Steve Jobs. The Facebook app never had a soul, and the fact he can’t invent anything that makes money outside of ad sales is yet another indication he has the imagination of a gnat. But the worst of it all, as demonstrated by all his actions, Zuck shows no concern for our youth or people’s privacy, and the Barbarians are lining up at the Meta Gate.
Outside of the Evil Twins that founded Google, there has never been anyone who has betrayed the Silicon Valley spirit of self-empowerment, privacy, and civil rights more than Zuck.
To be fair, no one has forced us to hand over our children to social media Goliaths for the last twenty years. We can not just wipe our hands and point at Zuck. We still have a vote on all this, and at this point, we are still overwhelmingly voting for Facebook, as the company’s recent financial results demonstrate.
Meta’s advertising business is roaring back. Meta recently reported Q3 revenue of $34 billion, up 23%, exceeding Wall Street’s forecasts. “We’re a leaner organization,” Zuck said on the call. “We had a good quarter for our community and business. I’m proud of the work our teams have done to advance AI and mixed reality with the launch of Quest 3, Ray-Ban Meta smart glasses, and our AI studio.”
Underneath all the fluff, Facebook is still a one-trick pony, with 98% of Meta’s derived from selling their customers. And not to be swayed by losing $24+ billion in 2021 and 2022 on his Reality Labs experiment, Zuck is now following the next fashion—AI. ‘Artificial intelligence is our top investment priority for 2024’ and will ‘de-prioritize a number of non-AI projects’ to keep overhead down without providing more specifics.
Our forecast is that Zuck’s move to AI merely means he will further invade, manipulate, and sell his customers, and the smart Ray-Bans will be dead on arrival. Who wants some joker showing up at the pool party wearing creepy shades?
Web3 social networks to the rescue?
We will also bet that a new generation of decentralized social networks will emerge and replace the legacy players. Beyond abusing their customers, first-generation social networks are aimless and entropic — they have devolved into chaos and have lost most of their original value. The successful networks of the future will have the following attributes:
3rd-party member validation system to guarantee identity and eliminate bots.
Crypto-key member access so that people can own and control their own content, connections, and social graph data.
Distributed storage to further prevent data tampering.
Run by smart social contracts and, in some cases, decentralized autonomous organizations (DAOs) that guarantee the rule of law without having to rely on any human or even on the social network itself.
Encrypted features to optimize peer-to-peer collaboration and community action.
Economic alignment by rewarding members who offer the most community-value crypto rewards and NFT badges.
Most importantly, each successful web3 network will be guided by a collective purpose to attract members and sustain itself. Our view is this new requirement will translate into the creation of more special-purpose networks rather than a new age of Goliaths.
The business model for the Web3 social network will not invade our privacy because, by design, it has no access to our data. In order to survive, these networks will have to do as Elon is doing and start charging for different levels of access and create a crypto-reward transaction environment where the network operator earns ‘gas money’ on all transactions.
At a later date, we will dig into this whole emerging sector in more detail—but what we describe above is happening and will happen. And these networks will force the legacy players to adapt or die.
The final Cryptonite take
Our instinct is to confront our social network dilemma in the same way we proposed to deal with the ‘War on Drugs’—forget about the suppliers and focus on the addicted. We are still buying Facebook, Snap, and TikTok; therein lies the problem and the solution.
If you need help with your addiction, repeat after us, ‘Zuck with AI, Zuck with AI, Zuck with AI…” If that does not cure you, nothing will.