Tags: decade | blockchain | decentralized

A Decade of Blockchain: Are We Decentralized Yet?

businessman hand  holding circle of computers with dollar signs on screen with Blockchain in red in middle
(Wutthichai Luemuang/Dreamstime)

By    |   Tuesday, 02 October 2018 09:42 AM

The internet has slowly transformed during the last 10 years, at a pace that is hardly noticeable on a day-to-day basis, but one that is blindingly fast to those with a broader perspective.

Blockchain’s birth and evolution as a network architecture is just a minor part of this grand sea change, though it made some big promises when it hit the scene. Among them were mass decentralization of services that we enjoy today, such as banking and content consumption, as well as a new breed of tokenized internet utilities that offer a better deal to users than existing platforms.

However, looking at the biggest changes to hit the worldwide web since 2008, one will quickly notice that few of them have come courtesy of blockchain, or even in reaction to it. Wireless infrastructure is now universal, and social media’s dominance of content and advertising is a trend that happened in a purely centralized internet environment. Cloud services have also made a large impact in the last ten years, but they are merely an extension of a centralized architecture made more accessible. Blockchain has yet to deliver any killer apps, and Bitcoin has not taken over for fiat money yet.

The internet itself has not so much evolved or gotten any fairer as it has consolidated. This may be one of the reasons that blockchain has found it so hard to gain a foothold. Still, pioneers in the space are quietly working to deliver the renovations to our beloved internet that blockchain once hyped, and the progress they have made is considerable given challenges that were little anticipated.

Impenetrable Force, Meet Immovable Object

Blockchain and the internet are both immensely stubborn in their own ways. For example, despite the internet’s dynamic and flexible nature, companies that dominate internet services like Comcast still do not always use IPv6—the protocol that makes using the web most efficient for the largest group of people. In fact, according to Alexa only 30% of the world’s websites are reachable over IPv6, which is staggering considering that the protocol was invented in 1998. Additionally, the same decade-long debate over how to guarantee defined, static quality of service is also troublesome.

Platforms on the modern internet are a product of this stagnant environment. The most popular websites like Facebook and Twitter operate as silos, with each corporation the absolute authority of their slice of the internet and therefore the owner of all data, content, and value generated there. Sharing content between platforms demonstrates the stratification of the web, with a user required to manage each ecosystem separately or rely on third-party apps to do it for them. Even the inventor of the internet, Tim Berners-Lee, stated that he feels sorry for web users who have never enjoyed the internet true potential: a trifecta of fun, reliability, and safety.

If the internet is not yet influenced by decentralized values, then one might think that blockchain would be, but if anything, blockchain has regressed in terms of its network structure. Even after 10 years of development, Bitcoin is struggling with true decentralized operation. It has evolved into a network with highly centralized mining operations that can sustain its lofty price, thereby abandoning decentralized tenets in favor of money. Over 80% of mining power is based in China and concentrated into pools that each have an undue influence on this would-be “safe haven” asset.

Blockchain does not have to be decentralized at all to work, and in fact functions even better under unilateral control, which Ripple illustrates handily. No algorithmic consensus mechanism, for the moment, is better at creating an efficient financial model using technology than one CEO is. However, both Bitcoin and Ripple are concerned with financial ideas. There are other aspects of the internet that will only meet their true potential with decentralized architecture.

Where Truly Decentralized Internet Works

One of the main reasons for a siloed social media network, for example, is that the company can control the value that users generate there. This is what Berners-Lee describes as “paying for access with privacy”. Privacy means that your identity is safe (Facebook does not need to know your email or phone number to know it is you), but also that the potential dollars your viral posts are generating is also yours. People simply do not know that their content is valuable because the modern internet has taught them it is not. The lesson is: “if you want the privilege of providing and consuming content with friends, that content and what it says about your preferences is now ours.”

TRON is one of the first decentralized projects to spearhead a new content model, and it comes from Justin Sun, one of the brightest stars in the blockchain space currently. Sun’s TRON is a distributed content hosting and storage system where users transact in TRX—the platform’s tokens. Using tokens means that content creators can earn money when they make a popular post or video, letting them better monetize their content and cater to their audiences. Consumers will also be able to tailor their selection better instead of going with the buffet-style subscription model—and control the sharing of their data and identity as well.

While TRON’s mainnet just launched, it is already making impressive progress acquiring traditional internet assets to help accomplish its larger goal. With the purchase of BitTorrent, TRON launched Project Atlas, now one of the largest decentralized networks in the world.

TRON isn’t alone in the blockchain content space, with peers such as Steem.io, DECENT, and DACC (Decentralized Accessible Content Chain) also in the running. Steem.io, for instance, is similar but runs a more community-focused decentralized social network where users can vote on the content that’s best. Steem is considered to be a big success, sporting a community of more than 20 million users.

Though it has taken a while to arrive at this point, blockchain innovators are just now beginning to gather momentum. Leaders like TRON are at the forefront of a revolution that may take another decade to fulfill the expectations of the last but will do so resoundingly. It just takes time to defrost the icy grip that internet mainstays have developed on the status quo.

Jim Hoffer is founder and managing director at Hoffer Financial Consulting. Follow him on Twitter.

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Though it has taken a while to arrive at this point, blockchain innovators are just now beginning to gather momentum.
decade, blockchain, decentralized
Tuesday, 02 October 2018 09:42 AM
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