The Failure of a Crypto Social Media Network Sparks an Awkward Question: Is Blockchain Good for Anything Other Than Finance?
The adage “Build it and they will come” doesn’t hold true here. Actually, if you construct a blockchain-powered social media network, hardly anyone will show up. Last week, the crypto community was reminded of this once more when Farcaster, which had secured a $150 million Series A round in 2024, suddenly called it quits.
For those not in the know, Farcaster was co-founded by early employee Dan Romero and allowed users to share different content through a timeline similar to Twitter. The project aimed high, seeking to break the data monopolies of platforms such as Facebook by providing a decentralized alternative where users retained control over their data and identity.
Despite a $1 billion valuation and some prominent backers, Farcaster never amassed a significant audience beyond a horde of bots and a small group of VC enthusiasts. Eventually, the founders recognized the obvious (that no one was using Farcaster) and threw in the towel, but made a face-saving announcement that they had arranged something. Creditably, Romero also stated he would return the $180 million he had raised to Farcaster’s investors.
So what went wrong? Some on X have blamed the management team as the main cause of Farcaster’s failure, though this claim may or may not be valid. What’s clear is that the market has little interest in crypto social networks. This is evident from the failure of previous attempts, like the fraudulent BitClout network, and Coinbase’s Base recently deciding to focus on financial applications rather than social ones.
All this shows that while people may like the idea of using blockchain for data sovereignty, in reality, they’ll get their social media fix on X, TikTok, or Reddit. That’s because those platforms have millions of users and offer a much smoother interface than what a crypto startup can create.
Those trying to build social and other applications on blockchain may also face a bigger issue. Essentially, the technology may not be suited for this, and crypto should stick to what it’s always excelled at, which is finance.
Over about 17 years, crypto has developed three killer apps that achieved significant product-market fit: Bitcoin, stablecoins, and DeFi. All three are firmly in the financial sector. Meanwhile, the idea of using blockchain to transform other industries like media or supply chains still seems as distant as ever—though there’s renewed talk about using decentralized technology to enhance privacy.
As for Farcaster itself, it might be the peak of an earlier era of crypto defined by a popular book on data ownership called [name]. As someone on X put it: “With Farcaster losing its founders, Chris Dixon’s Read Write Own era is over. Crypto is for Internet Capital Markets. End of story.”
Jeff John Roberts