Surviving Crypto Winter — Part Two: Blockstack and the Great Pendulum of History

Jordonk
Jordonk
Nov 4 · 10 min read

History is a pendulum.

It swings back and forth, from closed to open, complex to simple, centralized to decentralized, and then back again, an endless cycle.

Everything in the world exists in a never-ending state of radical transformation. Whether it’s the relentless quantum fluctuations of particles locked in a dance of infinite probabilities, or the surge of biological systems from single celled amoeba to intelligent life, or the swell of great civilizations as they rise and fall, life is always on the move.

The only constant is change.

If you can see that deeper pattern of coming together and falling apart, then you know where we are and where we are going. If you want to see the future, you only have to look to the past.

Pinpoint where we stand in the cycle and you have a map through the storm of chaos.

You won’t know the exact form the future will take but you’ll know its abstract characteristics.

Some short-sighted folks, like the ever-cranky Dr. Doom, think blockchains, dApp platforms and cryptocurrencies will fail but that’s only because they don’t see the eternal cycle. Those doomsayers will end up as footnotes in history, forgotten even though they shook their fists in furious rage while alive, all of them sound and fury, signifying nothing.

Many of the biggest companies of tomorrow will come from three spaces, artificial intelligence, 3D printing and cryptography driven platforms. Here we’ll focus only on the cryptography-centered future, where decentralized apps have replaced centralized ones and the cloud is pushed out to the fog.

Every industry endures winters, where hopes are dashed and the dreams of spring seem like delusions.

AI went through two winters and it took 50 years for anyone to reap rewards like self-driving cars. The Internet looked like a joke for the first twenty years. 3D printing is still in a winter, after early hopes of a printer in every house failed to materialize without the reason to have one yet.

And of course, the crypto market suffered a spectacular crash in 2018, as the markets lost 80% or more of their value over a long slow slide to despair. The winds of crypto winter are blowing furiously and the storm is taking many victims already.

In this series, I cover who stands the best chance of rising from the freezing cold and thriving when spring comes again.

Blockstack is one of those companies building a decentralized future and they’ve got a leg up on many of the other projects in the space. They’ve got the funding, the smarts, and most importantly working code, something many projects with millions of dollars in the bank still can’t say.

But maybe you’re wondering why anyone needs a decentralized application? Aren’t the centralized ones good enough?

To understand why you only need to look closely at where the Internet once was and where it is today.

The Internet and Back Again

The Internet started as a wild and open wonderland of unlimited possibilities.

Early adherents to the net saw so much potential, from working remotely, to buying everything from books to electronics online, to shared spaces of free communication.

All of that happened and more. From Twitter, to telecommuting, to Amazon, we got what we wanted from the net. It took longer than anyone expected but in only 25 years the Internet became something nobody could live without.

Today, it’s hard to imagine landing in a foreign country and not whipping out Google Maps or TripAdvisor instantly. You need to find your way to food fast. And when you find that perfect place to eat, you’re probably going to call Uber. As long as the local government hasn’t intervened to cripple it and rolled back the clock to the age of bad taxi service, you’ll have a ride experience that’s the same in that strange land as it is in Los Angeles.

But something happened on the way to paradise.

Twitter spawned the Arab Spring, but spring soon turned to winter.

We went from a wildly open, world-spanning network of freedom and possibilities, to an ad-driven cyberpunk wasteland controlled by a few companies.

I used to use a meta-search to pull results from dozens of search engines. Now I just use Google like everyone else because the other engines faded into oblivion.

Google may do search better, which is why they slayed the competition, but now they’re the only game in town. If they get it wrong we don’t really know what’s hidden from us. Google frames our view of the world and what we see and don’t see.

I used to spend hours roving the net looking for odd little sites. Now I spend my time on a dozen or so major sites like everyone else, usually on my closed-source phone, instead of my computer.

Mega-corporations vacuum up our data and build vast, private pools that predict what we want, when we want it, so they can sell us more stuff we don’t need. Our data is the new oil and the new gold.

Four of the top five companies in the world are tech and Internet companies, including Apple at number one and Google at number two. Facebook was laughed at after its stock crashed 50% almost as soon as it IPOed, and now it sits as number seven in the world. 2.27 billion people used the site in 2018, almost a quarter of the population of the entire planet, which stands at 7 billion.

It wasn’t always that way though. I’m old enough to remember the early days of the Internet when dotcoms were plucky little upstarts that most traditional companies thought were a joke, just like many people think cryptocurrencies and decentralized platforms are today.

In 1999, I was working at a dotcom called Uproar, a game company. They grew so fast one year that they went from one floor in the old New York City garment district to five. We couldn’t hire people fast enough or buy enough servers to meet demand.

As the dotcom era boomed, parties got more and more lavish and elaborate. I remember one where a giant ad company rented out a mega-club for a winter wonderland party in New York City and filled it with go-go girls and ice sculpture bars. They had people dressed as Oompa Loompas handing out candy as dry ice machines filled the club with ethereal mist.

And then it was all over.

The dotcom bubble burst and companies couldn’t fire people fast enough.

For months and months at Uproar, me and the rest of the tech support team came into work and did whatever we wanted because all my bosses were gone and there was nobody manning the rudderless ship.

When there was a fire sale for equipment a few months later, after everyone got laid off, the boxes of network cables were stacked to the ceiling.

Out came the naysayers. They’re a part of the eternal cycle too, there at every turn to laugh at the failed experiments and ridicule anyone who dared to dream of change. They laughed at the Internet and dotcoms and buying books online and telecommuting.

Nobody is laughing now.

Those giant tech companies swept aside the old economy and now they control the pipes that all our digital lives flow through.

Google sees roughly 40% of Internet traffic on any given day. They can silence voices or make them stars. They can cut us off and make it as if we never existed.

The Internet was designed as a decentralized, amorphous system, but it’s become something else entirely.

It’s primary protocol, TCP/IP, was created to survive nuclear strikes and disasters. If one big node went down, the traffic could still flow by routing to other nodes.

Today, all our traffic flows through mega-pipes. Two decades after the dot com crash the NSA has black boxes at major American Internet providers to vacuum up data because those big net providers act as centralized choke points that nearly every single bit on the net flows through.

But we didn’t need to governments of the world to turn the Internet into a surveillance state, because the companies we entrusted with our data happily did that for them. Stalin and other old world propaganda masters would be jealous of how easily people have willingly given over their private information to the machine.

There’s a great episode of Person of Interest, where the brilliant computer scientist working for the government was desperate to find a way to get everyone’s data secretly but he couldn’t do it. So he builds a thinly designed stand-in for Facebook and “everyone just gave it to me for free.”

They didn’t need to take our data with guns, we walked right up and handed it over happily.

The Internet today is a honey trap. All the services on it are free but we should have known nothing is free in this world. There is always a price. And the price is a few monster corporations that know everything about us.

Surveillance is the business model of the Internet.

It’s official. The turning is complete. The decentralized web is dead.

The King is Dead, Long Live the King

Decentralized is dead, but long live decentralization.

The move to centralization is complete and now the pendulum will swing back in the other direction. Everywhere the signs are evident of the coming change.

A slew of new startups is rising to re-decentralize the web and take us back to the wild and open early days of the net and its infinite possibilities.

The realization that the web has grown more and more centralized isn’t new, but it’s only in the last few years that we’ve seen a surge of money get behind the concept of re-working the web.

Sir Tim Berner’s Lee

Sir Tim Berners Lee, one of the godfathers of the net, spent the last few years working on a decentralization project at MIT called Solid, and now he has the funding to unleash it on the world. In 2016, he held the first decentralized Internet conference with the goal of “locking in open forever.

Blockstack is one of those companies looking to re-weave the web, but they were ahead of even the great luminaries like Lee. They launched in 2013, three years before Lee held his Decentralized Web conference. They’re helmed by distributed systems specialist, Doctor Muneeb Ali, who I just interviewed on my podcast. They raised early seed capital after graduating from the Y Combinator program and later from Union Square Ventures, along with investor and Twitter sage Naval Ravikant.

Out of this new crop of contender companies will come the Google of tomorrow.

And that brings us back to why does anyone need a decentralized application?

Why does grandma need a dApp? Aren’t Facebook and Google good enough? Do we really need a decentralized Instagram?

The answer may surprise you.

Centralization is not bad by itself. There’s nothing truly wrong with it. A balanced system has both centralized and decentralized components. A great tree has a powerful trunk and its branches are distributed. Each plays its part in the whole.

But we don’t have a balanced Internet now. What we have is an extremely centralized Internet.

And extreme centralization is bad.

The cycle of history is not here to root out centralization. It’s here to root out extremes.

There’s an old proverb in China:

“Things will develop in the opposite direction when they become extreme.”

Life seeks balance. Centralization and decentralization each have their strengths and weaknesses. And the antidote to one extreme system is a healthy dose of the system’s opposite.

An overly centralized system is a sick system. It’s stagnant. It crushes innovation and creativity. It’s inflexible and it can’t grow or change easily. Worst of all, it allows problems to fester, with no way of solving them.

The easiest way to illustrate why is Equifax.

Equifax is one of three mega-processors of our sensitive personal information. They managed to lose half of the data of the entire United States, leaking our social security numbers, and birthdays, and credit card numbers to hackers all over the world.

But did they suffer for their terrible security? Did they go out of business? Did they get replaced by a better company?

No.

In fact, they probably made money. They own companies that monitor credit data and people everywhere started paying for those services after the leak.

Even worse, they’re still trusted with processing and storing our information.

They’re so rooted in power that we can’t rip them out even when they fail us on an epic scale.

This is centralization to the max. We can see the errors and we can’t do a damn thing about them with the current system.

To fix it, we need to distribute the infrastructure, and the governance, and the very applications themselves so that no corrupted node can live on in the system, even though they’ve failed us all.

Jordonk

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Jordonk

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