What decentralization is good for (part 2): Platform Risk

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Continuing on the theme of what decentralization is good for, this week I would like to focus on one of the most powerful drivers in the near-term: Platform Risk.

Platform Risk is is the risk that the tech platform that you build your product/app/business/life on will become a critical dependency, will become unreliable, and/or worse, will screw you in the end. 

Here is a post from a few years back that details many different flavors of platform risk, many of which are benign, and some of which are malicious. And here are some examples, to make it more concrete:

This is not to say that any of these acts are necessarily illegal, or even immoral.  But if you are investing serious time and money — especially dropping everything to build a business on a platform — these kinds of risks are of grave concern.

So, what does decentralization have to do with platform risk?  When the platform is a protocol (i.e, decentralized) rather than a company (i.e., centralized), the rules of engagement are known up front and can’t change on a whim or because of a business decision.

If we think about the original internet protocols (TCP/IP, HTTP, SMTP, FTP, SSL, etc), they are a set of networking, communications and data exchange protocols that ultimate form the platform we know of as the web. While there are certain forms of platform risk on the web (e.g., stability, speed, security), the web on the whole has become a very stable and reliable platform, generally absent of the flavors of risks detailed above.  

Cryptonetworks (i.e., public blockchains and cryptocurrencies) combine the architecture of the original internet protocols with the functionality of today’s corporate applications platforms (data management & transactions).  While there are still major issues to solve before these systems collectively become a mainstream platform, they are gaining major adoption from developers in large part because developers are so keenly aware of platform risk, and see cryptonetworks as a type of platform they can trust.  

As an illustrative example, let’s compare downloads of the Truffle framework (a popular dev tool for Ethereum):

source: Truffle Dashboard

… with the price of ETH over the same time period:

source: Messari

Developers are the canary in the coal mine when it comes to platforms.  And at the moment, they are pointing to the desire for platforms with less inherent risk, more reliability and more trust.

Unlocking a new skill

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Over the long weekend, I spent a bunch of time with my kids doing outdoor cold weather activities. I love the winter, and I love winter sports — there is something about being outside on a cold, sunny day that gets my blood moving and makes me feel great. Those who have read this blog… Read more »

What decentralization is good for (part 1): Resilience

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Recently, Simon Morris, a long-time BitTorrent exec, wrote a provocative series of posts on the nature of decentralization, in the wake of BitTorrent Inc’s acquisition by TRON.  They are relatively short and a good read: Why BitTorrent Mattered — Bittorrent Lessons for CryptoIf you’re not Breaking Rules you’re Doing it WrongIntent, Complexity and the Governance Paradox Decentralized Disruption — Who… Read more »

The Octopus Card

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I am in Hong Kong this week for Blockstack‘s Decentralizing the World Tour (more on that in a forthcoming post).   I arrived yesterday and have been exploring the city a bit. The first observation is how awful the air quality is.  Holy cow.  This report from Plume Labs (snapshot from the time when I took this… Read more »

Managing digital addiction

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USV’s book club book for this month is Drug Dealer, MD, by Dr. Anna Lembke, Director of Addiction Medicine at Stanford Hospital – so we have spent a bunch of time recently talking about addiction. It is not a stretch to hypothesize that we, as a society, are at a moment of heightened addiction, generally… Read more »

Paying down debt (financial, technical, and otherwise)

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Debt is a complicated subject.  On the one hand, it is empowering — it lets you get a quick start on something, and lets you do things that would not be possible otherwise.  There are times when it is useful, necessary, and unavoidable. I think about “debt” in the broadest possible terms: times when you… Read more »

Google Pixel Slate: first impressions

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For the past week or so, I have been experimenting with the Pixel Slate, Google’s new hybrid tablet/laptop. Here is me typing this blog post right now, on the train to NYC.  For a longer,  more technical analysis, this review from The Verge is good. The Pixel Slate is an odd machine, and I am still… Read more »

A visual guide to the Howey Test

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Disclaimer: I am  not a lawyer, and I am not your lawyer.  I have been in an uncountable number of conversations over the past few years discussing the question of what defines a “security” in the context of cryptocurrencies, cryptonetworks, and token offerings.  Here is my current understanding, including a number of key questions I… Read more »

Crypto fundamentals

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Our good friend Chris Burniske was on Squawk Box this morning. I got up and watched it.  You can see the video here. Of course there is interest in the crypto market right now, as it is falling hard. I suspect there are many out there who are enjoying the drop, waiting for the bubble… Read more »

Getting hands-on

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One of my favorite things to do is get my hands into something and figure out how it works, whether that’s an app, or a gadget, or a house. For example, over the past few months I have been renovating our basement, turning an unfinished, dank storage area into a playroom for the kids.  Here… Read more »

The dangers of unstoppable code

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With real-time, interconnected, self-executing systems, sometimes when things wrong, they go really wrong.  I wrote about this general idea previously here. Yesterday, while I was writing my post on Trusted Brands, I was doing a little searching through my blog archives, so as to link back to all the posts categorized under “Trust”.  In the… Read more »

Trusted Brands

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Today is election day.  I’m on a plane today, so I voted early, a few days ago.  I cast my vote and it felt good. I marked my paper ballot with a marker (for optical scanning) glued it shut into a sealed envelope, and handed it to a volunteer who placed it in a secure… Read more »

Suffering, self, and service

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The massacre in Pittsburgh is heartbreaking and awful, and another example of the extent to which society seems to be fraying. The Pittsburgh attacker spent a lot of time on social media sites that stoked his fear, isolation and anger.  I think about the internet a lot, and while the internet has the ability to… Read more »

Building a meditation routine

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I wrote recently about the challenge of turning plans into routines.  One of the activities that is the most impactful for me is meditation.  I cannot say that I have a perfect meditation routine, but I can absolutely say that when I do do it, it makes me feel great, immediately. There are a bunch… Read more »

Trauma

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Just about two years ago, my wife’s parents were hit by a truck while crossing the street. The past two years have been both difficult and wonderful.  Wonderful in that two people who were on the brink of death following the accident are still with us (her mother in particular has had a miraculous if… Read more »

Plans vs. routines

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Sunday night over dinner, my son, parents and I were discussing the saving / investing system we set up for our kids in the spring. The idea was/is: set a monthly budget for purchases (in their case, mostly online movies, tv shows and games), and include a really healthy interest rate (20% monthly) to encourage… Read more »

The adjacent possible

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Dani and I have been spending a bunch of time recently thinking about the relationship between applications and infrastructure.  It’s a little bit of a chicken and egg situation.  You need infrastructure to build apps, but often times you don’t really know what kind of infrastructure is needed until you build some apps. For example, we… Read more »

Getting the chills

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One of the greatest things Frannie and I have in common is that we get the chills from music — typically at the exact same time, triggered by the same musical… something. For me it starts  at the back of my neck, and if it’s really good, it spreads all over my back, head, and… Read more »

The utility infielder

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My favorite baseball player is Brock Holt, and has been since his first season with the Red Sox back in 2013.  Here is me last month wearing my Holt jersey that I wear to every game (note the #26 that he started out with, before it was retired for Wade Boggs a few years ago… Read more »

Fear

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I have been helping my son, who is in 4th grade, with his math — specifically, multiplication.  He feels like he is a little bit behind, so we are working on it so he can get more comfortable.  It is going well now — we have gotten into a routine of spending 15 minutes per… Read more »