One possible downside is that people might just edit events to fit an overarching positive narrative, but that takes a lot of effort and work. It's much easier - if you want to increase your followers - to just become more positive and collected yourself, and the benefits will just follow. In a real sense social media is changing the way we live because we have to actually make our lives fit that overarching positive narrative. It's not just a matter of continuously masking the reality by putting a positive spin on things that might actually have been relatively less satisfying or rewarding. We are starting to behave in ways that would anyway receive a welcome from our friends and acquaintances.
And in making the hive mind thus visible, we are becoming more aware of how we fit into society. No longer essentially atomised and alone, but rather now included, cared for, and looked after by legions of similar folk. We are subject to a ubiquitous morality that regulates conduct through radical transparency and might even stand as succour like the comfort we get from a personal God. Endlessly connected, we are not just gratified by inclusion in this uber-organism, we are an important part of it, too, and so we contribute to its proper functioning by rewarding others just as we are rewarded.
Some might point to anonymous accounts to show that there are faults with this model thus proposed, but it is important to remember that those who operate such accounts will have difficulty realising the full potential of participation unless they put their real names to them. You think of people whose identity has been released by some quantity of sleuthing for example, on the part of a media organisation intent on distributing retribution, and what invariably happens is that that account's stock-in-value increases, and the real owner of the account subsequently benefits as well. It pays to be transparent. You can snipe from behind the facade of a bogus name for as long as you want but you are actually pedalling against the wind. If you want the full value of your participation to be released you have to be open about your identity.
Others might point to how anonymity works in repressive regimes where freedom of political speech, for example, is curtailed by onerous laws. It's true that not everyone is allowed the liberty of full participation in the radically transparent world, but we can console ourselves when we remember that countries that force people underground will have trouble participating fully in the community of nations. See how long it has taken Turkey, for example, to become part of Europe. Its treatment of problematic players in the public sphere is a large part of its PR challenge in that regard. It pays countries, just as it pays individuals, to be open and inclusive, otherwise they, likewise, cannot fully participate in the broader community.
Radical transparency is not just good for our individual mental health, it also opens up new avenues in the fight against crime. How can we pretend forever to be someone we are not? The burden of such a fate outweighs by a huge amount the rewards of ethical participation in society. If we want to receive the benefits of that participation we have to become better people ourselves. As we improve ourselves we will become happier and our increased popularity in social media will enable us to help more people in the broader community to become happier too. The ubiquity of morality is a virtuous circle of good.