Bluesky Crypto Protocol

Bluesky is a decentralized social media network and the company that develops it, built on an open standard called the Authenticated Transfer Protocol, or AT Protocol. The project was announced by Jack Dorsey in December 2019, when he was chief executive of Twitter to build an open standard for social media. In 2021 it became an independent public benefit company, led by chief executive Jay Graber, and it opened to the public without invitations in February 2024. Its design is meant to let users take their accounts, followers and posts from one service to another, a goal similar to interoperability in payments.

Bluesky is often grouped with crypto projects because it shares their aims of user control and portable identity. It is not a blockchain, however, and does not have a cryptocurrency or token. It belongs to a wider movement of decentralized social networks that includes Mastodon, Farcaster and Nostr.

Think of email. You can have an address with one provider and send messages to someone with a different provider, and if you are unhappy you can move to another service. No single company owns email. Traditional social networks are different: your account, followers and posts live inside one company, and if it changes the rules or bans you, you lose them.

Bluesky aims to make social media work more like email. Your identity and posts are stored in a way that can move between services, and different apps can show the same network with their own designs and filtering rules. The Bluesky app is the best-known way in, but it is meant to be one of many.

When Dorsey announced the project in 2019, he described it as a small team that would develop an open, decentralized standard for social media. Twitter funded the early work. Jay Graber, who had worked on the privacy cryptocurrency Zcash and on decentralized social projects, was chosen to lead it in 2021, and Bluesky was set up as a separate company. A beta version of the app launched by invitation in 2023, and public sign-ups opened in February 2024. User numbers grew quickly during periods of change at X, formerly Twitter, after its purchase by Elon Musk in 2022. Dorsey left Bluesky's board in May 2024. Bluesky has raised venture funding and has said it plans to earn revenue from services such as subscriptions rather than from a token.

The AT Protocol separates the parts of a social network that are usually controlled by one company:

• Identity. Each user has a decentralized identifier and a human-readable handle, which can be a domain name they own.
• Personal data servers. Users' posts, likes and follows are stored in signed data repositories, a kind of public record without a blockchain, on servers that they can choose or run themselves, and can move between providers.
• Relays. Services collect updates from many servers into a single stream for apps to read.
• App views. Applications, such as the Bluesky app, build timelines and features from that stream.
• Feeds and moderation. Anyone can build custom feeds and moderation services, which users can subscribe to.

Because data is signed with users' keys, each tied to a public key in the user's identity record, posts can be verified wherever they appear, an approach that borrows from cryptography and digital signatures rather than from blockchains.

Bluesky has been described as a "crypto protocol" mainly because of its focus on cryptographic identity and decentralization, and because of the involvement of people from the crypto community. It deliberately avoids a blockchain, which its developers argue would be too slow and costly for social media. This sets it apart from crypto-native social networks, which record identities on a blockchain and sometimes reward users with tokens. Dorsey has since backed Nostr, a simpler protocol popular among Bitcoin users that integrates with payments on the Lightning Network. Bluesky's success or failure is often used in debates about whether Web3 goals require tokens at all. Any token marketed as "Bluesky coin" is not issued by the company.

Critics argue that, despite its design, Bluesky is still largely centralized in practice, since most users rely on servers, relays and moderation run by Bluesky the company, and running a full relay is expensive. Supporters reply that the protocol allows others to run alternatives and that independent services are growing. The network also faces the usual social media challenges of moderation, harassment, spam and misinformation, made harder by its open design. Its long-term business model, and how it will sustain itself without advertising or tokens, remains uncertain. These issues are part of the wider debate about decentralization and network effects in online platforms.

• Bluesky
• AT Protocol