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Decentralization

Welcome to The New Internet, Decentralized and Free

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Last week we reported that, in a post on the official BitTorrent blog, CEO Eric Klinker announced a private alpha test for a P2P web browser called Project Maelstrom, based on BitTorrent technology. Project Maelstrom is one of the ongoing initiatives aimed at building a new Internet that works like BitTorrent.

That is, decentralized and free.

Also read: BitTorrent Moves to Decentralize the Web

When you download a torrent and open it with a torrent client, something magic happens: you start downloading file referenced by the torrent not from a central server, but from all the users who have downloaded the file. Each user sends you bits and snippets of the file, and before you know it, you have downloaded the whole file. The BitTorrent technology for distributed file storage and Peer to Peer (P2P) transfers was one of the biggest developments in Web technology since the Web itself, and opened the way to a distributed, fully decentralized Internet.

BitTorrent is an ideal technology for P2P file transfers – once a torrent is released and seeded by many users, there is no way to stop the wave. But the weak link is the Web: if the authorities don’t like a website, they can take over the central server and shut it down. Examples: The Pirate Bay, Silk Road, and WikiLeaks. But if there is no central server, the authorities can’t take down the central server.

As reported by Reason magazine, BitTorrent CEO Eric Klinker said about BitTorrent’s Micro Transport Protocol:

It’s the best example we have of technology being used to solve what is perceived to be a policy problem. It’s only through the technology that the Internet’s rules are written.

Before announcing the developed of Project Maelstrom, BitTorrent launched the P2P chat application Bleep, currently in open alpha testing, which works through a server-less architecture built around a distributed hash table (DHT). Bleep is fully encrypted, with messages and other data only stored locally on users’ devices. Users can entirely delete their message history if they want. That shows how a distributed, peer-to-peer architecture like BitTorrent uses is more secure than one built on a cloud-based architecture.

Websites Streamed by Thousands or Millions of Personal Devices Worldwide.

BitTorrentBleep and Project Maelstrom are two elements of a new Internet, decentralized and free, which we will start using in 2015 and, hopefully, will take over the Internet of old and its intrinsic vulnerability to hostile actions. Imagine: websites don’t live on central servers that can be blocked, switched off or seized by bankers and bureaucrats, but are streamed by thousands or millions of personal devices worldwide. It is easy to see that, by extending this approach to message boards, it will be possible to develop free and anonymous communication platforms. Once that happens, there is not much that the enemies of Internet freedom can so, besides licking their wounds and denouncing those filthy free people.

I signed up to be a Project Maelstrom alpha tester, but I haven’t been invited yet. Not much is known at the moment beside the initial announcement, which doesn’t have many technical and implementation details. Fortunately, PC World has an article with more information about Project Maelstrom and BitTorrent’s vision for a P2P web, based on exchanges with BitTorrent’s communications chief Christian Averill and product manager Rob Velasquez. Some highlights below:

Maelstrom is based on Chromium, the same open-source project found underneath both Chrome and Opera. In order for publishers and developers to take advantage of Project Maelstrom, they have to publish their content as a torrent. Project Maelstrom will support normal web browsing via HTTP/S, so that users will be able to browse normal websites as well. The Maelstrom browser adds the additional support of being able to browse websites distributed via torrents.

The project is focused static on HTML and Javascript apps at the moment, but the developers plan to add support for web applications such as storefronts and productivity apps like Google Docs. HTTP requests can be made inside of a torrent and BitTorrent requests can be made inside of normal HTTP/S websites, which will permit mixing the two types of content. For example, an HTTP/S served blog could serve images or videos via a torrent and display them inline, or a torrent website could embed live tweets via an HTTP/S API.

Developers will be able to embed anything in a torrent website that can be embedded in an HTTP-served website, like Google Adsense, Facebook like buttons and video streams.

Not much more is known at the moment, but make no mistakes:  this is the beginning of a new and better Internet, decentralized and free.

Images from BitTorrent and Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Giulio Prisco is a freelance writer specialized in science, technology, business and future studies.




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Decentralization

Three Warnings of Warnings for the Buzzwordy Allure of “Decentralization”

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What value does decentralization serve anymore?

With blockchain venture capital and angel investment targets searching for more refined, user-focused, functional projects, it’s important to go over the concept of decentralization and what role it plays in attracting users.

A simple fact that many investors lost track of in the madness of ICO investing in 2017 was how important it is to have a reasonable userbase target and growth strategy. Equally important is the demographic of the users these projects are seeking to attract.

This article will highlight the types of traps many projects are blindly rushing into, and bringing potential investors with them:

1. Attempting to target a user base that will likely never be interested in using their platforms long-term.

There are too many projects in the blockchain space attempting to “steal fire from the gods” and go after the user bases of the likes of Facebook, Google, and Amazon. As if this goal isn’t ambitious enough, hinging the majority of the value proposition on the fact that their platforms are “decentralized” could be a big mistake.

In order to attract users from platforms that have pioneered and ruthlessly refined spectacular user interfaces and powerful network effects, blockchain projects must offer something magnitudes better. A back-end feature such as decentralization isn’t enough to get massive amounts of users to jump the Facebook/Google ship unless it is paired with a user experience that blows the alternatives out of the water.

This is one of the major challenges that even a more advanced blockchain-based platform such as BAT have to face. Any competitors are competing for a piece of pie that may be too far out of reach – so savvy investors will fully understand the difference between a project’s listed “total addressable” and the size of the actual opportunity itself.

2. Neglecting the true demographics in dire need of decentralization.

For the majority of Americans and Westerners, decentralization isn’t a primary concern when it comes to sending payments. Try explaining to the average college student why they should navigate the twists and turns of sending Bitcoin to each other instead of pulling up an app like Venmo and clearing the payment in two seconds.

Think of users that could really make use of decentralization. Users in developing countries such as Ghana or those with crumbling economies like Venezuela need decentralized payment and banking solutions. Many projects are working on solutions that would be perfect for developing economies, but are anchoring their business development models to attracting users in countries like the United States that simply don’t have an urgent need or desire to use.

Additionally, many of these demographics may not generate less revenue, but also be more expensive to target. Savvy investors will pay attention to what demographic a project is targeting, and whether that demographic is as lucrative as the project assumes.

3. Understand which middle-men can actually be “cut out”

So many projects in the space aim to cut out the third party intermediaries between transactions without paying attention to the actual costs. This is not only a very tough endeavor, but also a gross misunderstanding about how to run a functional business. Successful businesses tend to gravitate towards being centralized because it makes management, growth, and customer success way more efficient.

Your project wants to cut out Uber and create a blockchain-based network that connects drivers and riders at a fraction of the cost. Great. But how will users find out about it? Where’s your marketing budget? What happens if users want customer support? How will you retain users? The assumption that these can be done with network fees or praying to Satoshi that the token appreciates enough to keep everybody happy (for now) will pave the trail of tears for investors. Decentralization comes with its own costs, too.

For all the negative press, centralized intermediaries like AirBnB and Uber tend to do an above average job (all things considered). Even getting to “average” requires extensive investments in user happiness and marketing for user-heavy business models.

Think of a landscape where centralized third-party intermediaries actually kind of suck at what they do. For example, the betting landscape seems to be a decentralized glob of poorly-run centralized betting platforms. A project such as BX.Bet, one of many projects aiming to facilitate and legitimize the betting space, could potentially have a chance to offer a value proposition that beats that of the reigning centralized platforms.

Savvy investors will understand the role intermediaries play in their landscapes, will note how and why they spend tens to hundreds of millions of dollars a year just to exist.

Final Thoughts

Next time you find yourself reading a whitepaper of another project building something its target users won’t use, or targeting users that simply aren’t valuable enough to merit the development of a full decentralized business, or claiming that it will level the playing field by cutting out third party intermediaries, run (or at least do very, very diligant research to prove this argument wrong).

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 18 rated postsAlex Moskov is a writer and entrepreneur with a passion for building and creating awesome things. Alex has experience in music tech startups, digital marketing, and cryptocurrency investing.




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Decentralization

Cache Me If You Can: Crypto Trading, Decentralized

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Spot exchanges, over-the-counter/OTC trading desks, and futures contracts would likely rank amongst the most popular methods for trading cryptocurrencies between two or more parties.

Despite their popularity though, most of these trading venues utilise centralised infrastructure in at least one area of their operations.

When combined with the endemic security threats which crypto trading services regularly face: centralized fundamental functions are a considerable threat to users who value the privacy of their transactions.

“A Peer-to-Peer Electronic Cash System”

Cryptocurrency is still a burgeoning industry, with the number of ICOs and market investment having increased by several multiples even just over the past eight months when compared to the whole of 2017.

Despite this: concerning conventions have already established themselves that challenge the original vision prescribed by Satoshi Nakamoto for Bitcoin.

The enigmatic Satoshi Nakamoto became a legend upon publication of his seminal cryptocurrency white-paper entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ (and if you haven’t read it, you really should!).

Since then, the document has served as an conceptual blueprint which has been referenced by a great number of subsequent altcoins: evident by the widespread implementation of Bitcoin’s core mechanics. An example of this is has come to be known as cryptocurrency mining, or the ‘Proof of Work’ consensus algorithm.

P2P vs  P2intermediary2P?

Peer-to-peer (P2P) denotes transactions that are made between two parties without the need for an intermediary to facilitate or authorise the trade.

Mike Orcutt, associate editor at the MIT Technology Review wrote in April 2018 that:

“The whole point of using a blockchain is to let people—in particular, people who don’t trust one another—share valuable data in a secure, tamperproof way…

“One supposed security guarantee of a blockchain system is ‘decentralization.’ If copies of the blockchain are kept on a large and widely distributed network of nodes, there’s no one weak point to attack, and it’s hard for anyone to build up enough computing power to subvert the network”

Whilst this is true for many blockchains and their associated blocks for decentralized cryptocurrencies: most middle-man’ who process trades and transaction utilise a centralised system known as an ‘order book’ upon which future transaction and trade values are calculated.

In June 2009, mere months after Nakamoto’s Bitcoin paper was released to the world, a cross-departmental team from Stanford University published a related and highly recommended investigation into the contemporary status of the order-book.

The authors state that:

“most markets are order-driven, where any market participant is free to provide liquidity by submitting a buy or sell order. Submitted orders are amalgamated by price to create a limit order book. The[re is a] rule driven execution of orders in these limit order books and [also] extensive data that is available for order driven markets.”

With  a centralised order-boook; all the data pertaining to transactions: such as receiver and sender addresses, value of tokens, and dates could be all-but-publicly accessible in the case of a hack or successful unwanted intrusion.

Peer-to-Peer Trading: What Can Be Done?

One solution which we have seen numerous examples of are organisations which claim to be ‘decentralized exchanges’.

On the 9th of August 2018, for example, well-known yet controversial ex-China based cryptocurrency exchange Binance launched a pre-alpha build of their highly anticipated decentralized exchange which they call ‘DEX’.

Conversely, Binance has been subject to more than their fair share of negative press and public feedback as of late and earning trust for their future projects will be no easy feat. They have to contend with hackers, pundits, and a 5.9/10 ranking on Trustpilot.

Another notable release comes from blockchain development platform Stratis, a competitor to Ethereum’s ‘platform for platforms’ and ranked in 50th place on CoinMarketCap as of writing.

The ‘Breeze Wallet with Breeze Privacy Protocol’ launched on the 1st August 2018, and it is a means of facilitating pure peer-to-peer, user-to-user, fully decentralized transactions. As a result, Breeze hopes to introduce centralized intermediaries to the realm of obsolescence, by way of a token-tumbling protocol called ‘TumbleBit’.

If you know of any more projects which have been making recent progress – please let us know in the comments section!

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Blockchain

Justin Sun Plans To Buy BitTorrent

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Justin Sun, the CEO of TRON, is finalizing an agreement to buy BitTorrent, inc. Most people know BitTorrent as the creator of the popular torrenting client, uTorrent, which at its peak had over 100 million users.

According to Torrentfreak.com, BitTorrent has been in a steady decline to some poor decisions and potentially illegal missteps by their management.

In an interview with BitTorrent founder Bram Cohen, the management was painted by Cohen as incompetent narcissists who had no business plan and no idea what they were doing besides chasing some nebulous idea of celebrity endorsement.

This can be seen in Cohen’s statement, “They were just incompetent fuckups. I mean they’re losers. Basically, Accel took their share in BitTorrent and pretty much just gave it away to these total strangers who they didn’t know. And not only gave away their stock but gave away control of the company.

Human beings are a bunch of starfuckers, right? The United States has become this celebrity-obsessed culture, and everyone’s all about, oh, we’ll gain access. That’ll be great, and we’ll make money off of it, everybody thinks this.”

It is against this backdrop that Sun’s alleged acquisition is taking place. The TRON projects alleged goal is to “decentralize the web.” Owning one of the most recognizable brands aligned with these goals would be a major coup for the ambitious CEO.

This is due to the fact that the most likely use case of uTorrent by TRON would be to simply parlay its user base into usage of the TRON blockchain.

Since a huge part of TRON’s model relies on advanced content search for media files, simply making use of the uTorrent brand but integrating it with Tron’s decentralized search would instantly transform TRON into one of the most actively utilized blockchains on earth.

The information stems from the fact that BitTorrent changed their company name recently to Rainberry according to their chief product officer. “Rainberry Inc is the official name of the company; it was changed right around the start of 2017.” He stressed that it was a purely corporate decision and that none of the existing product brands would change.

Despite this blanket denial, it seems like the acquisition was proceeding swiftly, and was even overcoming some initial hurdles. BitTorrent had already tried to find a better acquisition offer during the first round of negotiations, to the point that Justin Sun took them to court in an attempt to stop them from negotiating with other buyers.

However, it seems that these initial roadblocks have been overcome, as a new company called Rainberry Acquisition, (BitTorrent recently changed their official company name to Rainberry) was formed and registered directly to Justin Sun. How Sun plans to integrate the platform with Tron is an open question, but it is likely to result in some interesting synergies.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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