The Impact of Net Neutrality on the Blockchain.

ABL Nick
4 min readNov 29, 2017

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It doesn’t take an expert to see the huge power play that continues for governance of the Internet, and while it’s currently isolated to certain regions, it would be foolish to think we will avoid this conflict down the road.

I’m talking, of course, about the fight for Net Neutrality. Simply put, back in 2015 legislation was passed that prevented large corporations and Internet Service Providers (ISPs) from gaining a monopoly on the flow of information online. Currently, Canada and the US retain Net Neutrality, meaning these ISPs can’t give preferential treatment to certain websites or platforms so your bandwidth is yours to consume as you wish. Without it we’d be looking at a similar experience to cable television. You want to watch videos on youtube — gotta buy the video package. Oh, you want to watch videos and game? — yeah that’ll be extra. Use email for work? Gotta pay premium for that one. You see where I’m going with this.

Aside from the annoying impact on your pocket book, these ISPs would control the distribution of knowledge, and could prevent people from accessing apps, news or any content that isn’t featured in their “packages.” Admittedly, it’s a little Orwellian, another step towards a Black-Mirror-esque world.

In May of 2017 the FCC (Federal Communications Commission) announced its intention to repeal its 2015 Net Neutrality rules. The debate is a hot one across North America, but if this is a new subject for you, I’d suggest starting with this article published by Tech Crunch.

So what does this mean for the Blockchain? How could the loss of Net Neutrality impact the thousands of startups in a technology that’s still in its infancy? Like Cryptocurrencies, the answers are highly speculative, but I’ll summarize a couple of the dominant positions.

Throttling the Market

The power to choose which companies get bandwidth priority could be leveraged to control the ICO market. Dominant players can force out competition by raising the cost to entry and prevent competition, putting even greater power in the hands of already overly powerful platforms.

The other byproduct of throttling blockchain based organization is an increase in transaction fees. Back in 2014, first amendment lawyer Marvin Ammori was cited by coindesk saying:

“If you need to pay AT&T, Comcast, etc. for quality of service (the ‘fast lane’), you might end paying per transaction or a percentage of revenue and you have to pass on those costs.

That means that paying AT&T etc. adds transaction fees where the bitcoin network and cryptocurrency would have otherwise eliminated it.”

But that’s not the worst of it. Based on research done by ETH Zurich, about 30% of the Bitcoin Network is hosted by only 13 ISPs (0.026% of the total ISPs out there), which means a single ISP could effectively destroy the blockchain with a “partition attack,” which causes a separation from the network, or a “delay attack,” which would delay the blockchain transaction. Being able to do this would allow ISPs to cripple markets.

Business as Usual

While some fall into hysteria over the potential of what “might” happen, the truth is often less bleak. Many countries already operate without Net Neutrality legislation. Places like Portugal, where the Internet is already broken down into packages, still plays host to a number of large technology conferences and has a growing blockchain community.

China is another country that retains its non neutrality. While censorship is a common occurrence within the Chinese web, up until the recently implemented bans, China was one of the largest consumers of Cryptocurrency and was active in the blockchain space.

South Korea is another example of a country that has seen widespread adoption of blockchain technology despite not retaining Net Neutrality.

Scouring Reddit suggests that for many net neutrality is a non issue and is potentially beneficial to a free market. While 30% of the bitcoin network may be hosted on 13 ISPs, the larger body of blockchains are much more diversified and decentralized, meaning that it would be incredibly difficult for ISPs to impact the entire blockchain industry.

The Long March Forward

Regardless of your opinion on net neutrality, one thing is for certain: consumers will feel it. If companies have to pay for priority bandwidth, you can bet that the additional cost will be reflected in the many services we subscribe to. While some argue that this will bring better competition to the market, some fear that this is the beginning of a great era of information suppression.

For now, the future of blockchain still holds great promise. Since its inception, it has been on a constant bull run of disruption, and while nothing is certain it will be interesting to see if an end to Net Neutrality stifles its potential for innovation.

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