Why Crypto is Just Starting — Decentralized Data Storage
By Ananya Agarwal on ALTCOIN MAGAZINE
In 2017 Crypto-currencies experienced a huge speculative boom, followed by a sobering crash. After all that, serious technologists are still not clear on why crypto-currencies have an inevitably bright future. I’ll tell you why.
The idea of crypto-currencies from 20,000 feet is private, independent control of your own wealth, without reliance on any single third-party individual, bank, company, or government.
Anonymity and Decentralization: Two legs of the Same Trouser
The first step towards independent control of your wealth is privacy (provided by the anonymity of crypto) — The reason you need privacy is simple: because
outsiders can’t mess with your stuff if they don’t know anything about it. The
second step towards independent control of your wealth is decentralization.
The idea is that if there is a single organization that has control over some
part of a business, then they have the power to corrupt that business at your
expense.
Lots of people don’t seem to care about any of this. They’re happy to use Paypal, or American Express, or to write checks from their bank — even
though those transactions are completely traceable; they don’t care if Facebook or Google track their interests; or if Amazon employees listen to their private conversations; or if the government gets a hold of their purchase histories or bank balance — and this is true even after well publicized abuses of power from those same organizations, including censoring of social media accounts and politically-motivated freezing of bank accounts.
But there are others who do care. I’ll call them the “super-paranoid individualists”. This strange group, of which I happen to belong, doesn’t trust any organization to be an honest broker. And we want all our transactions to be private. I remember the wave of inspiration I felt when I first heard about Bitcoin — finally a chance to conduct my affairs without any prying eyes, and a currency that couldn’t be confiscated by any bank or government.
The problem is that a mostly anonymous, or even an untraceable currency is only a small part of the privacy and decentralized-control puzzle. The other pieces are built on a foundational technology called Decentralized Data Storage. The good news is that the technology is here — and applications are being built to fill-in some of the missing pieces.
Decentralized Storage, IPFS and Swarm
IPFS (the Inter-Planetary File System) and Swarm are two competing technologies that implement decentralized data storage. In both technologies data is identified by hash (eg: ce23197b455dbccbcbea05a97cb95ff2…) and split into chunks, which are distributed across nodes all around the world. The differences between the two technologies are technical, but basically IPFS is more general purpose, whereas Swarm is more closely integrated with the Ethereum ecosystem.
Decentralized storage is a key puzzle piece for decentralized organizations and for private communications. Aside from the obvious benefit of censorship resistance (because yes, governments do take down websites), decentralized storage makes it possible to build decentralized applications and organizations. Here are two examples.
Decentralized News Network
Decentralized News Network (DNN) is a community-run news ecosystem. It’s a distributed system in which independent individuals create, review, and fact-check news stories. The system is built on Ethereum contracts that reward all parties involved in publishing factual articles. No one person or group can censor an article, and biased activity is discouraged through an
egalitarian review process. Obviously, in a decentralized, automated, peer-controlled organization like this, the news articles can’t be stored on AWS (whose credit card would be billed?) …. So, you guessed it, articles are stored on IPFS. You can find out more about DNN here.
Turms Anonymous Message Transport
Turms AMT is a messaging platform for sending encrypted messages between Ethereum addresses — a capability that will be critical for any privacy-enhancing commerce system. Note that you already reveal your Ethereum address when you transfer ETH to pay for something. The beauty of sending messages to an Ethereum address is that will enable communications between a buyer and seller without revealing anything else. Turms AMT is implemented as an Ethereum smart contract, but the actual encrypted messages are stored on Swarm. One unique feature of Turms AMT is that when you send someone a message you need to pay them a small fee, usually
the equivalent of a few cents — this is to discourage spam. Turms AMT is fully functional, and if you’ve used DApps with Metamask before, then you’ll find it straightforward. You can try it out right now here. (Feel free to send me a message about how much you enjoyed this article… my ethereum address is ananyalasagna.eth, and I set my message fee to zero.)
In Summary
With Decentralized storage paving the way, the missing pieces of the decentralization/privacy puzzle are coming together. And when the puzzle is complete, the true goal of crypto-currency will be acheivable. The hype of 2017 jumped the gun, the crypto vision is just beginning to come into view.
Ananya Agarwal
