alt Hacker NewsProbably doesn't matter for the "40M+ users", most of them have churned at this point and growth is negative. This is good critique for the next iteration of open social protocols, but fundamentally atproto did not fail because of technical reasons. The next iteration should make privacy the default and core to protocol, and be very mindful of how the leadership / social dynamics played out.
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Bluesky / AT is the most successful open social network in history and the only one to become culturally significant. It has been adopted by presidents, celebrities, journalists, and mainstream users.
Bluesky has ~50M registered users and has sustained ~5M monthly active users for long while. There's no reason to believe it will fall substantially below this level.
It is also in the process of adding (decentralized) subcommunities, which I expect to be really cool and have a large impact on growth.
Based on all the traffic and development activity I'm not sure on what basis one would say "failed"