It is important to make a distinction between “social networks” and “social media”. Social networking is a natural part of human behavior so it becomes problematic when corporations and governments gain a monopoly over this type of social data.
In contrast, any centralized company should be encouraged to provide “social media” content in a variety of different ways. This promotes competition since users will gravitate to the content provider that censors them the least. They can’t cry that Facebook is censoring them if they can easily go to a different social media provider without recreating their entire social network.
That only works if all content providers are looking at the same “friend list”. In order to give social media content providers equal opportunities, this social network data must be decentralized in the form of NFT’s.
NFT’s have historically been used for trading digital images in an open market. The OpenSea marketplace has been a huge success as an exchange for people trading these NFT images with one another.
There are other ways to monetize NFT’s beyond art though. If each NFT has an ERC20 token minter associated with it, the tokens can be exchanged in a similar centralized marketplace. This results in crypto wallets containing the coins of contacts you follow which are tradeable with others.
Imagine a celebrity with millions of followers but they only mint 1000 social network tokens. The fewer tokens in circulation, the more valuable each token is worth so it is advantageous to keep your social network limited.
We’ve become accustomed to “free” services that secretly sell our data for profit. The alternative to this model requires the concept of gas. Gas is what keeps the Ethereum network going. In a decentralized model, incentivizing miners and stakers with a financial incentive is required in lieu of not having centralized corporations subsidizing it with advertising revenue.
The rule is essentially, if you change any data on the network (write), you are going to pay a small price. If you just want to read data off the blockchain, no cost. For example, want to send a social network token to a friend? Gas Fee. Create an NFT? Gas Fee. Reading NFT data? Free.
Even though this microtransaction model feels different, it improves many things like reducing spam and fake accounts. Fraudsters are much more likely to avoid anything that costs them money upfront compared to the ease of spamming email accounts and Twitter for free.