Crypto-focused social network Minds is a decentralized alternative to Facebook—one that lets its roughly 5 million users, including content creators and advertisers, promote their posts and transact by paying with digital tokens.
Now the startup is putting its money where its mind is and converting around 25% of its balance sheet, or roughly $2.5 million, into cryptocurrencies. The move represents approximately a quarter of the $10 million Series B funding the company raised in June, founder and CEO Bill Ottman tells Coins2Day.
Major public companies like Tesla, Square, Coinbase, and MicroStrategy have made headlines for investing sizable chunks of their balance sheet cash in crypto, often at the risk of losses given the price volatility of the asset class. But Ottman says most crypto-conscious startups fail to make similar investments—something that he hopes Minds will now encourage with its own new exposure to crypto.
“It has a huge impact when Tesla and Square and MicroStrategy do it, but if we can create a phenomenon where startups are all putting a tangible percentage of their balance sheet into crypto, that’s a serious trend that could really change the market,” he says.
Minds is putting 5% of its holdings into Bitcoin, 10% into Ether, and another 10% into Circle’s interest-earning, USD Coin–backed Circle Yield product. As well as a display of optimism in crypto’s financial prospects amid a bullish 2021 for the asset class, Minds’ investment speaks to the startup’s belief in both cryptocurrencies and blockchain technology, both of which are core to its services.
The company deploys an in-house cryptocurrency called the Minds token—which is currently valued at north of $2—to reward users for their engagement on the social network and to both promote and receive payment for their content. (Users can also receive payment in popular tokens like Bitcoin and Ether.) Minds uses decentralized networks for a range of functions: It leans on Ethereum’s blockchain network to operate its Minds token; lets users connect MetaMask crypto wallets to the social network; and runs its messaging platform on the decentralized Matrix protocol.
“A lot of our infrastructure is running on Ethereum. We believe in Ethereum, and we want to hold [Ether],” Ottman says. “It’s an amazing network, and the asset itself provides not only utility, but everything that’s happening with the economics of it makes amazing sense.”
As well as its belief in crypto and decentralization, Minds is driven by a stated commitment to privacy, transparency, and “organic reach”—a direct response to Facebook’s controversial behavior on all three fronts. Minds does not require extensive personal information from users, runs an encrypted messaging platform, and rejects what Ottman describes as Facebook’s “oppressive algorithms” in favor of a reverse-chronological feed that lets users more easily increase the visibility of their own content by paying for it using Minds tokens.
“There was a whole industry of media that went out of business when Facebook changed their algorithm,” according to Ottman. “We just think that users deserve to reliably maintain the ownership of their audience and the space in the feed.”
Minds, which launched in 2015, has around 5 million Minds users, up to 500,000 of whom are active monthly. Users have the option of purchasing the social network’s subscription, Minds Plus, that allows them to access and post exclusive content, and potentially receive a cut of revenues from Minds for posting popular content. “An analogy would be, imagine if Netflix allowed you to upload a film, and if it performed well that month, you would get a cut [of revenues],” Ottman says.
Ottman declined to disclose Minds’ revenue. The company’s content policy—which leans heavily on the principle of free speech and attempts to “minimize bias and censorship” as a result—has faced criticism for allowing hate speech to proliferate on the platform.
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