Bluesky: Blockchain investor joins, where is the journey heading?

Admittedly, a year after my first impression, Bluesky has certainly done a lot right. This makes me all the more concerned about the latest information that was recently officially announced.

It's been almost a year since I was able to take my first look at Bluesky - and a lot has happened in the meantime. Jack Dorsey is out, two-factor authentication is at least basically there (verification by email, you can now create your own PDS (Personal Data Server) and since September it has also been possible to share videos. So far, so good - the current influx (the 13 million user mark was recently broken) is once again due to various changes at X.com, including a softening of the blocking function.

On the plus side, there are now also direct messages and, according to Bluesky, the developer community and the AT protocol ecosystem are also growing. The signs are or were actually quite good, and the 13 million user mark is also a milestone if - yes, if - the last official blog post didn't somehow have a bland aftertaste. Bluesky recently raised a further 15 million US dollars in another financing round, backed by the American venture company Blockchain Capital, among others. Now it is debatable how a (previously) free and ad-free new service should be financed - but the answer or conclusion from this may not please everyone.

According to Bluesky, Blockchain Capital shares the mindset that technology should serve the user and not the other way around - they continue to believe in the decentralized approach and the AT ecosystem. A natural partnership is being sought here and even though the current investor comes from the blockchain/crypto corner, neither blockchain technology nor cryptocurrencies will continue to be implemented within the AT protocol. Nor will the experience of a social network be cross-subsidized with tokens, crypto trades, NFTs, etc. To ensure this, Kinjal Shah, General Partner at Blockchain Capital, is joining the Bluesky board. The announcement in the official press release also sounds quite positive at first, if you put aside the “something with crypto” idea.

According to Bluesky, it intends to use the current financing round to invest further in trust and security as well as the AT ecosystem. There are also plans for a subscription model for uploading higher quality videos or the option to further customize your own profile - we're talking about colors or frames for the avatars and yes, it's a bit reminiscent of Reddit! However, Bluesky does not want to bury the free model and promises that it will always remain fundamentally free, even with all the planned changes: So there should be no “upcycling” of paid accounts or restrictions on free accounts - you can certainly look forward to this in the long term, as they want to keep information and conversations easily and freely accessible.

The logical conclusion

So it comes as it had to - one year after the abolition of the invite system and now with 13 million users, Bluesky cannot live on air and love in the long term. That's business and you have to look at it realistically. The various achievements since the last round of financing (federation also for self-hosters via PDS, own curated feeds, investments in security, starter packs that can be created or direct messages and videos) were quite acceptable - but the question of what comes next should be obvious and the answer to it not uninteresting.

However, the bland aftertaste that the buzzwords “crypto” and “blockchain” may end up in Bluesky is now there. Like so many other trends, the topic of “Web 3.0” has, in my opinion, been exhausted and the hype is over. There are obviously no plans for Bluesky to be influenced by the investor (whose traditional playground is the technology behind it), but there is still reason to fear this - even if open standards, decentralization and the associated independence are still high on the company's own agenda.

Bluesky's further journey will definitely be exciting: while the (own) tech bubble tends to cavort on the various Mastodon instances, Bluesky is more akin to the old Twitter in terms of appearance and acceptance by many public figures. This makes it easier to make the switch and ensures faster access to the platform: however, should the crypto key ever turn in the virtual lock, both the data and the user base are definitely valuable and are likely to cause another wave of migration - in whatever direction. For non-tech-savvy users, Bluesky is certainly the more legitimate successor to Twitter and is likely to continue to attract the masses in the future.

Don’t mess it up!

However, this acceptance is likely to depend on the extent to which Bluesky follows up its previous words with action and continues to address core issues such as federation, decentralization and security - Twitter has already shown how not to do this since the takeover by Elon Musk. The implementation of paid services is another challenge, although it is obvious that Bluesky will also have to be financed sensibly at some point. Monetization measures such as subscriptions, domain registrations or general payments to content creators - together with apps based on the AT protocol - will certainly contribute to Bluesky's growth. The only question is how much influence the investor will ultimately have (as is so often the case).

This is precisely the question that Bluesky will have to be measured against next year: Only then will it become clear whether the service and the protocol based on it really has the potential to inherit the old Twitter alongside the Fediverse-based services or whether it will be a flash in the pan in the long history of the Internet, which has also been temporarily fueled by venture capital. It remains exciting!