The Monetary Authority of Singapore (MAS) today released a consultation paper on proposed guidelines for a “regulatory sandbox” that will enable financial institutions (FIs) as well as non-financial players to experiment with financial technology (FinTech) solutions…

mas-sandbox

Source: http://www.mas.gov.sg/News-and-Publications/Media-Releases/2016/MAS-Proposes-a-Regulatory-Sandbox-for-FinTech-Experiments.aspx

Upon the completion of the ‚Series A’ round, Coinsecure plans to enter the enterprise blockchain solutions space.

Delhi-headquartered Bitcoin trading platform Coinsecure announced today that it raised over $1.2 million as part of its ongoing ‘Series A’ investment round. The fund-raising round started in January this year and the exchange expects to close the round soon. The raised funds will be used to introduce Ethereum trading and upon the completion of the round, Coinsecure plans to enter the enterprise blockchain solutions space.

Founded in July 2014 by Mohit Kalra and Benson Samuel, Coinsecure launched its Bitcoin exchange on January 1, 2015. It offers algorithmic trading, a Blockchain explorer, a demo platform for users to try trading without real money, On-Chain and Off-Chain wallet services and also has a number of integrations with global partners. The company boasts that it now consistently handles over 3000 BTCs a month in terms of volume and has shown increasing volumes every month since starting operations….

Quelle: Indian Bitcoin Exchange and Wallet Coinsecure Raised Over $1.2m | Finance Magnates

Der Bitcoin war das Nonplusultra, wenn es um digitales Geld ging. Der Konkurrent Ether könnte das aber nun ändern – auch weil er mehr kann als Bitcoin. Ether übersprang jetzt eine magische Hürde.

Quelle: Das ist der neue große Rivale des Bitcoin

Ethereum is a contract validating and enforcing system based on a distributed public ledger (or blockchain) such as the one implemented by the Bitcoin cryptocurrency. Yet, Ethereum also features an internal Turing-complete scripting language that can be used to encode advanced transaction types directly into the blockchain. This allows for the deployment of self-enforcing smart contracts (such as joint savings accounts, financial exchange markets, or even trust funds) as well as distributed autonomous organizations (DAOs) that subsist independently of any moral or legal entity. These algorithmical entities are both autonomous and self-sufficient: they charge users from the services they provide so as to pay others for the resources they need (e.g. bandwidth, cpu). Thus, once they have been created and deployed onto the blockchain, they no longer need (nor heed) their creators.

But if DAOs are independently operated — neither owned nor controlled by any given entity — who is actually in charge, responsible for, or accountable for their operations? And if their resources cannot be seized (because DAOs have full sovereignty over them), how can they be required to pay damages for their torts? This talk will analyse the interplay between distributed autonomous organizations and the law, with a view to explore the dangers and opportunities of Ethereum: could this new platform promote the establishment of an entirely decentralized society, or will its disruptive potential eventually be absorbed by the established system?

About Primavera

Primavera De Filippi is a postdoctoral researcher at the CERSA / CNRS / Université Paris II (Panthéon-Assas). She is currently a research fellow at the Berkman Center for Internet & Society at Harvard Law School, where she is analyzing the challenges raised by distributed architectures and multimedia applications in the context of cloud computing and peer-to-peer networks.

Links

Location:
Berkman Center for Internet & Society
Copyright License:
Creative Commons 3.0 Attribution Unported

Source: https://cyber.law.harvard.edu/events/luncheon/2014/04/difilippi

Ethereum Prepares for Take Off

Ethereum, the decentralized application and smart contracting platform prepares to shoot the starting gun, as their Frontier release reaches 99% 98% completion. Miners, who have been waiting a year since the crowdfund, have begun sharpening their GPU pick axes.
[Update: Another bug seems to have been added over night, bringing it back to 98%]

Imagine a day when you want to go meet some friends for a drink. You pull out your iPhone 13, open the decentralized uber app, and using your preferred cryptocurrency, you pay for a smart cab.

The vehicle has no steering wheel. It does not need one. Artificially intelligent driving software issues an offer to pick you up, competing with 50 other smart cabs in the area. The best deal locks in on the blockchain exchange and a few seconds later the cab arrives, ready to facilitate and enhance the rest of your night out.

The door closes behind you as you walk onto your front lawn. The door can only be opened by those with a specific crypto token, which like Bitcoin, can be transferred to your family or friends, as you see fit.

From the inside, it looks more like a club lounge than a taxi, very much like high-end limousines look and feel today, except in the size of a 4-door sedan. Since smart cars virtually never crash, you don’t really need a seat belt, and all chairs are facing the center of the vehicle. You are served a cocktail to get you started as you journey to the restaurant.

Everything in your home, from your toaster to your washing machine, can be controlled digitally and from anywhere in the world. You remember, as you drive to the gathering, that you forgot to start the dryer. No problem, there’s an app for that too. Just approve the right micro transaction on the blockchain with a voice command to your smartwatch.

This future is not hard to imagine. This is only a small glimpse of everything being made possible by technologists today, and the blockchain promises to deliver an essential piece of security and simplicity to the rising Internet of Things.

Utopia or Dystopia?

To some this might seem like a dream land, a place where agreements are completely peer to peer, enforced by mathematics, not by law, nor corruptible human bureaucracies and our biases.

To others, the knowledge that is hard-earned through the daunting insecurities of technology systems and through ubiquitous and scandalous hacks could spell disaster for such a world, especially should control of all human tools be hijacked by malicious actors. The security of our information systems is, therefore, of utmost importance, since this future is near. The Internet of Things at this scale is a reality waiting to happen. The question is, will it be secure?

Well, as far as security in the Age of Information goes, blockchains are very promising. Bitcoin has proven that decentralized networks can hold massive amounts of value. While individual parties may be hackable, such as the graveyard of centralized Bitcoin exchanges and wallets, still the protocol remains whole, and the economy vibrant and growing.

Ethereum is among such blockchain technologies, and it is believed by many to be one of the most promising and anticipated decentralized smart contracting protocols in development today.

Its vision, brought to us by distributed consensus engineer and visionary, Vitalik Buterin, is about to take its first step out of a two-year development cycle that has up until now been confined to test networks.

It will go down in history as having been one of the most successful crowdfunded projects hands down, having raised over US$18 million in September 2014. As of today, it sits in third place as having raised the most money among crowdfunded projects, ever.

Ethereum, of course, is not only being developed by Buterin. The Ethereum community is as international and decentralized as its protocol, composed of hundreds of volunteers and a large operations and development team. It includes Gavin Woods, Stephen Tual, Jeffrey Wilcke and many more. And they are building on the work of many before them, as we all are.

In fact, the term ‚smart contract‚ dates back to 1993, credited to pioneer Nick Szabo.

Are We There Yet?

“Frontier” is the name of the first release of the Ethereum main chain, and it is called that for a reason, as illustrated by a documentation on the release, which states:

“The Frontier is the first live release of the Ethereum network. As such you are entering uncharted territory and you are invited to test the grounds and explore. There is a lot of danger, there may still be undiscovered traps, there may be ravaging bands of pirates waiting to attack you, but there also is vast room for opportunities.”

The document goes on to warn that Frontier is a command-line-heavy release. Those hoping for an easy-to-use interface are advised to “step back, watch from a distance for a while and wait until more user friendly tools are made available,” although there are some user interfaces in development, such as Mist and AlethZero.

This, however, should not discourage miners and tech-savvy entrepreneurs looking for the next gold rush. If there was ever a hot coin to mine, it might be this one.

While there is no official launch date yet — and I would not hold my breath for a “Heads up, we are launching Thursday” — there has been recent speculation that Frontier will launch within the next two weeks or so.

One obvious reason is the milestone barometer that follows the progress of the Frontier release. It was at 98% earlier this July. Now it sits at 99% 98%.

Stephen Tual also made a post on July 15 in which he suggests that the release is very close. Here are two clues he left:

“We’re very happy with the way Olympic [the Frontier testnet pre-release] took shape, so much so that many of the Frontier gotchas (chain reset at Homestead, 10% mining rewards, checkpointing) were deemed unnecessary.”

“Eight days ago we entered feature freeze. Meaning we are focusing exclusively on fixing bugs in the Geth codebase right now, we’re not adding new features anymore.”

Fairlay’s prediction market is also betting on whether “Ethereum frontier goes live before August,” with 113 votes and a roughly a 20% weight towards yes. Participants also seem very confident Frontier will launch before September. [Update: Prediction markets seem to also have shifted over night, this is an updated image]

Ethereum will use a mixed approach to their security protocol, starting off with a miming phase to distribute the ether units of account and then shift towards a proof of stake algorithm. Though details as to exactly when also seem to be scarce and in development.

Tual points out that there is still a “lot of admin processes to deal with: [ensuring] we have a strategy to recover from forks, a well rounded helpdesk, etc.” He adds that, “Once we are happy that Frontier is ‚done‘ and that the aforementioned processes are in place, we’ll publish a blog post explaining the next steps. We still won’t give a date, but at that point miners will want to be sure to be ready.”

Which brings us to mining.

Mine Me Some Ether!

RC2 mining rig, “‘Olympic' edition,” named after the last proof-of-concept Ethereum test release

— RC2 mining rig, “‘Olympic‘ edition,” named after the last proof-of-concept Ethereum test release

Tual has published a very detailed “How to Mine Ether” guide and FAQ, where he also describes a GUI for miners called EthMiner. It uses its own algorithm called “EtHash” a “Hashimoto / Dagger hybrid.”

I asked on r/ethereum, “What are my chances of actually mining any Ether on Frontier release, and how would I do it?” I received one particularly insightful response from redditor “playingethereum,” who said:

“The chances are incredibly good if you own a GPU with greater than 1 GB of video memory. You’ll need to set up your miner in advance. Ethereum has a very fast block time (12 seconds), so lots of people will find a couple blocks. The trade off is that the value of the blocks is significantly less than you would expect with bitcoin. For example, a current bitcoin block is worth ($300 * 25 bitcoin) = $7500, while an Ethereum block might be worth about ($3 * 5 ether) = $15.00.”

Keep an eye out for updates on those numbers.

Waiting for the Starting Gun

Some of the popular and anticipated projects waiting for Ethereum to launch include:

  • Augur: Decentralized prediction market.
  • EtherEx: “Fully Decentralized crypto currency exchange”
  • EtherParty: An easy-to-use interface for designing smart contracts, including visual design

Though there are plenty of projects being developed on the sidelines of Ethereum and there’s likely some buried, undiscovered gems, most of them preparing and waiting for the starting gun. Boom.

Source: http://cointelegraph.com/news/114898/ethereum-prepares-for-take-off

Als die ersten Personal Computer eine breitere Nutzerbasis erreichten, gingen viele davon aus, dass der Nutzen für uns Menschen im Laufe der folgenden Jahre/Jahrzehnte groß sein werde. Der Mensch sollte in diesem Zusammenhang im Mittelpunkt stehen und Computer sollten das Leben der Menschen vereinfachen und verschönen. So war seinerzeit die utopische Erwartung.

Inzwischen hat sich das Ganze so entwickelt, „…dass wir Produkt der Konzerne sind, die Software anbieten, die uns vermeintlich unterstützen. Wir geben bereitwillig intime Daten preis, über deren Verbleib wir anschließend die Hoheit verlieren. Wir sind auf dem besten Weg zur Totalüberwachung und Ausbeutung der Massen. Und daran verdienen ausschließlich die großen Firmen, die diese Produkte hervorbringen…“ (Jared Lanier – Wem die Zukunft gehört – 2014)

Ähnlich auch beim Crowdfunding: Hier ist der Ansatz prinzipiell ein guter, allerdings die Umsetzung nicht immer konsequent Mensch-zentriert.
Beispiel Kickstarter: Hier unterstützt man Projekte und bekommt dafür im Gegenzug irgendwelche Gimmicks. Man wird im Abspann des unterstützten Filmes erwähnt, man bekommt ein Mittagessen mit den Gründern, oder man erhält die allererste Ausgabe des gefundeten Buches. Oculus Rift hat so 2012 von Unterstützern bei Kickstarter 2,4 Mio US$ eingesammelt, die dafür T-Shirts, Poster oder anders gesagt, einen feuchten Händedruck bekamen. Zwei Jahre später wurde Oculus Rift dann von Facebook für schlappe 2 Mrd. US$ übernommen und die ursprünglichen Unterstützer standen außen vor. Oculus Rift ist hier sicher kein Vorwurf zu machen, allerdings zeigt es die Problematik sehr gut. Hätten die Unterstützer paritätisch (also gleichberechtigt je nach Höhe ihrer Unterstützung) am Unternehmen partizipiert, so hätten auch alle derer am Verkauf des Unternehmens teil gehabt.
So blieb ihnen nichts weiter als das T-Shirt, das ihnen die Teilhabe an Oculus Rift bestätigte. Wew…

Dem entgegen wachsen – langsam aber sicher – verschiedene gute Ansätze, Crowdfunding in Verbindung mit Blockchain Währungen zu verschmelzen.
So kaufen Unterstützer die jeweilige Firmen-Cryptocoins und partizipieren direkt am Unternehmen. Durch diese Bindung werden sie nicht nur zu monitären Unterstützern, auch ihre persönliche Integration in das Unternehmen wird gefördert. SWARM ist hier im Moment der mir bekannte Vorreiter.

Die Zukunft sollte also sein, dass nicht einzelne Großkonzerne das große Geld abgreifen und zudem nicht einmal ehrlich am fiskalen System teilnehmen, sondern jeder Einzelne am Erfolg einer Idee teilhaben kann. Monitär wie auch real.

shareable hat hierzu einen super Artikel:

Owning Together Is the New Sharing

Companies and startups are aspiring toward an economy, and an Internet, that is more fully ours with the use of cooperatives, „commons-based peer production,“ and cryptocurrencies.
VC-backed sharing economy companies like Airbnb and Uber have caused trouble for legacy industries, but gone is the illusion that they are doing it with actual sharing. Their main contribution to society has been facilitating new kinds of transactions — for a fee, of course, to pay back to their investors. “The sharing economy has become the on-demand economy,” laments Antonin Léonard, co-founder of the Paris-based network OuiShare, which connects sharing-economy entrepreneurs around the world.
Source: http://www.shareable.net/blog/owning-is-the-new-sharing
,
Ehemaliger FBI Agent beschreibt, wie er über 3.500 BitCoin Transaktionen verfolgen konnte

Alles lässt sich irgendwie hacken: Fingerabdruck Scanner, Autos, oder auch BitCoins.

Deren vermeintlicher Vorteil – die Anonymität durch Blockchain – lässt sich aushebeln, sofern man die BitCoin Adresse des jeweiligen Nutzers kennt. Aber das genau ist aus meiner Sicht der Punkt.
Natürlich kennen die beteiligten Parteien bei Transaktionen die Adresse des jeweils anderen, aber für Außenstehende ist das in der Regel nicht der Fall. Andererseits ist das bei der gemeinhin gebräuchlichen Kombination IBAN/ BIC auch nicht anders. Die kennen auch nur die Beteiligten.

Nur, dass bei BTC-Transaktionen diese öffentlich unter blockchain.info nachvollziehbar sind. Das ist genau das, was der große Vorteil blockchain-basierter FIAT-Währungen ist.
Man kann sich halt nur nicht heraussuchen, wer dann die Transaktion nachvollzieht.

Umso interessanter, was WIRED da so schreibt:

Prosecutors Trace $13.4M in Bitcoins From the Silk Road to Ulbricht’s Laptop

If anyone still believes that bitcoin is magically anonymous internet money, the US government just offered what may be the clearest demonstration yet that it’s not. A former federal agent has shown in a courtroom that he traced hundreds of thousands of bitcoins from the Silk Road anonymous marketplace for drugs directly to the personal computer of Ross Ulbricht, the 30-year-old accused of running that contraband bazaar.In Ulbricht’s trial Thursday, former FBI special agent Ilhwan Yum described how he traced 3,760 bitcoin transactions over 12 months ending in late August 2013 from servers seized in the Silk Road investigation to Ross Ulbricht’s Samsung 700z laptop, which the FBI seized at the time of his arrest in October of that year. In all, he followed more than 700,000 bitcoins along the public ledger of bitcoin transactions, known as the blockchain, from the marketplace to what seemed to be Ulbricht’s personal wallets. Based on exchange rates at the time of each transaction, Yum calculated that the transferred coins were worth a total of $13.4 million.

Vollständiger Artikel auf WIRED.com

 

Cryptocurrencies have now become commonplace in the online world. Although most of the media attention is focused on Bitcoin, Litecoin, Dogecoin, or other decentralised payment systems, the true revolution is happening at a much deeper level, one that does not involve only money. Bitcoin’s underlying technology – the “block chain” – has been adopted by many other applications with projects such as Maidsafe for distributed file storage, Twister or Bit-messaging for decentralised online communications, etc.

On 22 July 2014, a new cryptocurrency has become available on the market. After many months of preparation, Ethereum finally launched the pre-sale of its very own cryptocurrency – Ether – raising over 25.000 Bitcoin (approximatively $15.000.000) in less than two weeks. But what distinguishes Ethereum from other (more traditional) cryptocurrencies is that it provides a platform for the deployment of decentralised applications which have the potential to disrupt some of the most powerful organisations in advanced societies: those who instantiate financial and governmental institutions.

The role of institutions

An institution refers to any social structure in charge of governing the behaviour of individuals within a given community – such as law, money, religion, education, etc (Durkheim, 1985). This is generally achieved by means of formalised mechanisms of social order known as organisations – such as the government, the bank, the church, and so forth.

Institutions are needed to coordinate actions and stabilise expectations amongst a disparate set of individuals – two objectives that could, historically, only be achieved through hierarchical organisations and centralised forms of control.

The former (coordination) is achieved when there are efficient and effective interactions amongst a non-coordinated group of individuals – just like banks coordinate the savings and investments of multiple individuals and organisations.

The latter (trust) requires an organisation to be both accountable and sustainable over time. For instance, we expect banks to be responsible, and to operate with relatively predictable patterns over a long period of time.

The problem with institutions is not their function, but rather the centralised structure of the organisations that subtend them. Centralisation is costly because it relies on the aggregation of information for decision-making, which reduces the ability of such organisations to react promptly to their changing environment. Moreover, centralisation encourages the accumulation of resources and power in the hands of a few individuals, at the expense of less privileged groups.

Can the core functions of institutions – coordination and trust – be achieved by means of decentralised applications, thus avoiding the costs of centralised control?

Bitcoin – disrupting the financial institution

Let us take a look at how the financial system is affected by modern decentralised technologies. There has been a long history of pre-digital complementary currencies, such as the Bavarian “wära” and other Gesellian currencies, and multiple experiments were made during the 1990s and the early 2000s with new digital currencies, such as E-gold and the Liberty Dollar. Most of them failed because of scams, instability and scalability problems, some were even involved with massive money laundering regimes and eventually were shut down and/or seized.

Learning from previous failures, Bitcoin, as a decentralised cryptocurrency, represents a true discontinuity from the rest.

Created by the fictional character Satoshi Nakamoto, the Bitcoin network relies on basic cryptographic tools (such as public/private key encryption and digital signatures) to produce and maintain a decentralised public ledger (or “blockchain”) recording all transactions that have been made (and will be made) on the network. The validity and legitimacy of these transactions is verified through the process of “mining” – a process that relies on full transparency and peer-to-peer collaboration to overcome the coordination problems that are typical of decentralised networks (Nakamoto, 2008).

Contrarily to other virtual currencies, Bitcoin overcame several scams and attacks. In spite of the various incidents of theft due to the so-called transaction malleability (allowing for the unique ID of a Bitcoin transaction to be modified before it is confirmed on the Bitcoin network) and the recent BGP hack (exploiting the Internet Border Gateway Protocol to redirect mining traffic to a malicious server), Bitcoin is still strong and alive. Indeed, most of these attacks are due not to a flaw in the Bitcoin protocol, but rather to a lack of understanding and poor security measures taken by Bitcoin users or exchanges.

Facing dramatic price swings and hostile regulatory environments (De Filippi, 2014a), the Bitcoin network coordinates today over tens of thousands of transactions per day, in a relatively efficient manner. The network reflects within its own system the qualities of coordination and trust: two features which are key to the success of many financial organisations and monetary systems.

Yet, Bitcoin constitutes a major change in comparison with previous payment systems to the extent that it enables true independence from centralised forms of control. By creating a trustless system (where strangers can interact without having to trust each other), Bitcoin shifted the focus of trust away from the financial institution, towards the technology underlying the network. In this way, Bitcoin has proven that it is possible to implement a working decentralised currency system that remains independent from governments and corporations.

But Bitcoin’s real innovation is not the currency itself. The Bitcoin blockchain can extend beyond the monetary realm, to support all forms of social, legal and political transactions (De Filippi, 2014b).

Ethereum – disrupting social and political institutions

Thus far the most powerful example of blockchain-based application is Ethereum, an innovative platform that implements a turing complete scripting language (i.e., one that can solve any possible computational problem) on top of a decentralised cryptocurrency.

Ethereum builds upon the technology of Bitcoin to manage and coordinate different kinds of transactions in a trustless and distributed fashion (Buterin, 2014). While Bitcoin is limited to financial transactions, Ethereum can cover different types of transactions, provided that these can be ‘encoded’ into the blockchain. Financial instruments – such as insurance contracts or derivatives – can be translated into code so as to be understood and automatically enforced by the platform. Physical assets – such as smart phones or smart cars – can be linked to one or more cryptographic tokens that will determine both who owns them and who is entitled to use them. More generally, and perhaps most importantly, Ethereum can be used to regulate social interactions between individuals – such as an employer and its employees, or a licensor and its licensees – through a series of electronic agreements (i.e., smart-contracts) whose provisions can be automatically enforced by the underlying code of the platform; the mechanism by which the contract is defined (i.e., the code) is the same mechanism through which the contract is enforced.

As a result, Ethereum eliminates the need for trust between parties as well as the need for a centralised entity coordinating these parties. People can thus coordinate themselves, in a trustless (since the trust has been shifted onto the technology) and decentralised manner, without having to rely on the services of any third party institution – be it a corporate body or public institution.

Hence, what Bitcoin did to the financial system, Ethereum could do to the political system as a whole. In other words, if Bitcoin was designed as a decentralised alternative to counteract the corruption and inefficiency of the monetary system, Ethereum constitutes a decentralised alternative to the notion of the organisation per se.

Through its decentralised application platform, Ethereum eliminates the need for people to rely on centralised authorities and traditional, top-down governance models, to experiment instead with novel forms of distributed governance where decision-making occurs at the edges of the network. In this sense, Ethereum could contribute to supplanting centralised and hierarchical organisations with more decentralised (autonomous) organisations relying on contract-based coordination.

Today, Ethereum already appears to be a promising technology, at least considering the hype that has built up around it. Following the first two weeks of pre-sale, over 54.000.000 Ether have already been sold (worth almost $16.000.000 as of 1 August 2014). But the most interesting part has yet to come, as Ethereum’s official release will only happen during the last quarter of 2014. We are just witnessing today the emergence of new opportunities for individual emancipation and self-coordination.

Ethereum facilitates a new form of distributed private ordering between a decentralised network of peers, which significantly differs from the traditional regulatory mechanisms employed by centralised organisations and public authorities. In the future, we might be able to build decentralised organisations with distributed models of governance, independent legal systems, or perhaps even autonomously governed communities that would compete with both governments and corporations.

References

Buterin, V. (2014). White Paper: A Next-Generation Smart Contract and Decentralized Application Platform. (Self-published). Available online at https://github.com/ethereum/wiki/wiki/%5BEnglish%5D-White-Paper

De Filippi, P. (2014). Bitcoin: a regulatory nightmare to a libertarian dream. Internet Policy Review, 3(2). DOI: 10.14763/2014.2.286

De Filippi, P. (2014b). Tomorrow’s Apps Will Come From Brilliant (And Risky) Bitcoin Code. Wired, at http://www.wired.com/2014/03/decentralized-applications-built-bitcoin-great-except-whos-responsible-outcomes/

Durkheim, E. (1895). The Rules of Sociological Method. Durkheim: The Rules of Sociological Method and Selected Texts on Sociology and Its Method, 31-163. (1982).

Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. (Self-published). Available online at http://nakamotoinstitute.org/static/docs/bitcoin.pdf

 

Quelle: policyreview.info

how ethereum could shard the web

Given the state of our 25-year old web and all the problems inherited from legacy 1970′s systems design, we should pause and take inventory of those components which are fundamentally broken and would offer a substantial return on development investment. Intersecting this concern with security, privacy, and censorship resistance, it should be painfully obvious that an all-out attack on Internet infrastructure is already underway. As netizens, a shared duty falls on us to explore, exploit, and implement new technologies that benefits creators, not oppressors.

And while cryptography first allowed us to secure our messages from prying eyes, it is increasingly being used in more abstract ways like the secure movement of digital value via cryptocurrencies. If PGP was the first major iteration of applied crypto and Bitcoin the second, then I anticipate that the interaction and integration of crypto into the very fabric of a decentralized web will be the refined third implementation, taking root and blossoming in popularity.

 

the explosion of web services

Taking a look back at the brief history of the web, most would agree that Web 1.0 was epitomized by CGI scripts generating templated content on a server and delivering it to the client in a final form. This was a clear model of monolithic centralization, however, this basic form of interactivity was a huge improvement over the basic post-and-read format that comprised much of internet content at that time. Imagine having to reload the entire front page of Digg every time you wanted to click something:

Digg homepage 2006

As browser technology advanced, experimentation with AJAX calls began, allowing us to asynchronously perform actions without having to reload the whole page. Finally, you could upvote without submitting an HTML form and reloading everything. This movement to separate content from presentation—aided by CSS—pushed the web forward.

Today we have technologies like AngularJS and EmberJS which ask the designer to generate a client template with specific data holes to be filled in by some backend. Although these frameworks facilitate some of the programming glue for seamless and live updates, they also nudge the developer to work in a specific way. But this is only a moderate step towards Web 2.5.

amuse-bouche

The real Web 3.0 has yet to begin, but it could obliterate the notion of separating content from presentation by removing the need to have servers at all. Let’s take a look at some of the underlying technologies the Ethereum Project aims to deliver:

  • Contracts: decentralized logic
  • Swarm: decentralized storage
  • Whisper: decentralized messaging

Ethereum protocols - decentralized web

Technologies like Swarm could serve as the underlying static hosting infrastructure, removing the need to highly distribute and cache specific content. Because “decentralized dropbox” has been discussed with such frequency, expect HTTP-like bindings or services to be built atop this type of blob storage, making integration with the decentralized web 3.0 even simpler. This effort will also allow replacement of typical content delivery networks (CDN) with a distributed hash table (DHT) pointing to file blobs, much how BitTorrent works. Because of the flexibility offered by ethereum contracts, the model of content access could be creator pays, reader pays, or some hybrid system.

So we’ve just replaced the need to have caches, reverse proxies, CDNs, load balancers, and the like to serve static content to users. Another way in which Etheruem could impact this traditional infrastructure is by replacing business logic application tiers with on-blockchain contracts. Traditionally developed in a variety of web-friendly languages like Perl, PHP, Python, ASP, C#, and Ruby, ethereum contracts run in a fully-inspectable virtual machine that encourage simplicity and reuse. Business analysts and project managers might find this code transparency refreshing, especially since the same code can be written in Serpent (a Python-like language), LLL (a Lisp-like language), XML (a nightmare), or even in visual block form!

Ethereum blocks editor

How could all this be possible? Taking a look at the latest ethereum proof-of-concept 6 JavaScript bindings, we see that a sprinkling of JavaScript is all that’s required to monitor an account balance on the decentralized web:

<div>You have <span id="ether">?</span>.</div> <script> eth.watch({altered: eth.secretToAddress(eth.key)}).changed(function() { document.getElementById("ether").innerText = eth.toDecimal(eth.balanceAt(eth.secretToAddress(eth.key))) }); </script>

Because the ethereum protocol also acts as a large distributed key-store (a happy note for fans of NoSQL), eventually user accounts, credentials, and reputation can be migrated on-blockchain with the help of the Whisper communication protocol. In this way, ethereum sets the stage for an total sharding of traditional infrastructure as we know it. No more complex high-availability infrastructure diagrams. In the ethereum ecosystem, even decentralized DNS is free.

a decentralized future



Evaluating this context in a larger diagram of any systems infrastructure, it’s obvious that our current web isn’t as privacy secure or censorship resistant as we desire. Economies of scale have allowed single institutions to offer a vast amount of processing power and storage on the internet for very low prices, thereby increasing their market share to a point where they individually control large segments of internet activity, often under the supervision of less-than-savvy governments. In a post-borders era where the Internet knows no bounds, such jurisdiction has little or no meaning.

As economics of the ethereum ecosystem mature such that open contracts for lowest-rate storage develop, a free market of content hosting could evolve. Given the nature and dynamics of P2P applications, popular content will readily scale as the swarm shares, rather than suffering from the buckling load of siloed servers. The net result is that popular content is delivered faster, not slower.

We’ve spent decades optimizing the protocols that the internet was first founded on, but it’s time to recognize opportunities lost by continually patching the old system instead of curating a new, optimized one. The future will likely bring with it a transition period between traditional and decentralized technologies, where applications live in a hybrid universe and users are unaware of the turbulent undercurrent. But they should be.

This metamorphosis will offer developers an opportunity to build the next-generation of decentralized, private, secure, censorship-resistant platforms that return control to creators and consumers of the next best idea. Anyone with a dream is free to build on this new class of next-generation decentralized web services without owning a credit card or signing up for any accounts.

Although we are not told to or expected to, we have an imperative to cherish and improve the very shared resources that some wish to disturb, manipulate, and control. Just as no single person fully understands the emerging internet collective intelligence, we should not expect any single entity to fully understand or maintain perfectly aligned motives. Rather, we should rely on the internet to solve the problems of the internet.

Because of this, blockchain technologies like Ethereum will allow for simplification and lowering of cost not seen since the introduction of infrastructure-as-a-service (IaaS). Extending the idea to beyond a simple web project, Ethereum hopes to demonstrate how fully decentralized autonomous organizations (DAOs) can live wholly within cyberspace, negating not only the need for centralized servers, but also trusted third-parties, realizing the dreams of early internet pioneers that envisioned an independent new home of the mind.

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