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Is TikTok Going Blockchain? Impact on Creator Economy

Blockchain | March 11, 2025

Can Blockchain Save TikTok? The Battle Over Its U.S. Operations

The fight over TikTok's future in the U.S. is still in the heat of battle with American operations required to sell 75 days after January 19, 2025 or face a ban, per President Trump's executive order that pushed out the original ban. Reportedly there are several groups in discussion now to acquire the asset with Alex Ohanian Co-founder of Reddit now joining the Project Liberty Consortium's bid led by Frank McCourt to acquire and move TikTok's U.S. Ops to the blockchain.  While a deal may seem imminent, what does it mean for TikTok, its parent company ByteDance, and the broader creator economy?

U.S. Crackdown and Push for a Sale

TikTok U.S. has been under a watchful eye due to national security concerns that parent company, Chinese-based ByteDance, could expose user data to the Chinese government.  As a result, TikTok America must be sold in April 2025 or face a ban.

See:  Kevin O’Leary’s TikTok Bid – Privacy and Innovation

Several groups have stepped up with public bids (there are likely others in private) including:

President Donald Trump recently confirmed there are four major groups in the bidding process, but did not specify which group he favours. He also hinted back in January that the U.S. government should receive a 50% stake in the company as part of the joint venture deal.

Could China Block the Sale?

Despite all the kerfuffle, China has signalled that they may block any forced sale of TikTok U.S., adding more complexity to the negotiations.  Chinese regulators have authority over TikTok’s core algorithm and may prevent its sale to a U.S. company. If that happens, they could challenge the U.S. law in court while maintaining its algorithm under Chinese control, or opt to shut down U.S. operations instead of selling under duress.

What Happens to TikTok’s Creator Economy?

TikTok is more than just a place to watch videos. It's become a major platform where influencers, small businesses, and brands connect with audiences and earn money. Many people rely on it for income, and any change in ownership or government rules could affect how creators get paid, how the algorithm works, and how the advertising function works overall.

How Blockchain Could Transform Social Media

If Ohanian’s bid succeeds, adding TikTok on-chain would change how user data is stored and monetized. It would allow creators to earn money directly through digital tokens or decentralized finance tools while also making TikTok’s algorithm more transparent, and in doing so, reduce the control any central authority has over content moderation.  Models built on blockchain can operate on smart contracts, which means decisions about content moderation, ad revenue distribution, and engagement algorithms can be made in a transparent and automated way.

See:  Visa’s Solutions for the Creator Economy and Fintech Opportunities for Tomorrow’s Digital SMBs

For creators, blockchain unlocks direct monetization opportunities. Instead of relying on advertising revenue models controlled by platforms, creators could be paid instantly through crypto, NFTs, or microtransactions, avoiding high platform fees. Blockchain could also improve security, reducing fake accounts and ad fraud by using decentralized identity verification. Voting and governance structures could be also built into social media platforms, allowing users to have a say in platform policies through decentralized decision-making models.

This would be a major evolution of how social media models work today where tech giants like Meta and Google profit from user data without direct user control. However, integrating blockchain into a platform as massive as TikTok comes with its own set of regulatory and technical challenges.

Challenges and Trade-Offs

One major challenge in bringing blockchain to social media at scale is cost and scalability. Running transactions and storing content on a blockchain takes a lot of computing power, making it more expensive than traditional cloud-based platforms. Because TikTok handles millions of interactions daily, significant tech solutions would need to be implemented to run TikTok U.S. on a blockchain efficiently.

Another issue is ease of use. Social media platforms today are designed to be simple, easy to sign-up with streamlined interfaces. Blockchain platforms however require users to manage private keys or use crypto wallets that could cause some hiccups for those unfamiliar with blockchain.  Then there's regulation which is also a gray area. Governments around the world are still figuring out how to handle decentralized networks. Rules about content moderation, taxes on digital assets, and data privacy are not yet clear, which could create legal uncertainty for the business.

See:  Trump Media’s Patriot Economy Expands into Fintech

Lastly, while Web3 advocates push for blockchain-based alternative solutions, most users are still comfortable with ad-driven business models.  A shift to blockchain social media would take take and its success would depend on the average user's experience and any advantages they receive.

Outlook

While bidders line up, China’s reaction and ByteDance’s strategy will determine the outcome. If a sale does happen, it could set a precedent for how Chinese foreign owned tech companies operate in the U.S.


NCFA Jan 2018 resize - Is TikTok Going Blockchain?  Impact on Creator EconomyThe National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with fintech, alternative finance, blockchain, cryptocurrency, crowdfunding and online investing stakeholders globally. NCFA Canada provides education, research, industry stewardship, services, and networking opportunities to thousands of members and subscribers and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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