What decentralization is good for (part 1): Resilience

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:

  1. Why BitTorrent Mattered — Bittorrent Lessons for Crypto
  2. If you’re not Breaking Rules you’re Doing it Wrong
  3. Intent, Complexity and the Governance Paradox 
  4. Decentralized Disruption — Who Dares Wins?

There are decades’ worth of experience here, which are absolutely relevant for anyone and everyone working in the area of cryptocurrencies, cryptonetworks, and decentralized computing today.

In the second post in the series, Simon makes the argument that the killer feature of decentralized systems is rule-breaking:

“While a decentralized architecture can be effective at routing around a variety of different failures in a network, the type of decentralization that was achieved by Bittorrent (and by Bitcoin for that matter) has enabled routing around rules.”

While there is undoubtedly a strong dose of truth here, I think it is a dangerous place to stop.  There is already a narrative that cryptocurrencies and decentralized systems are for pirates and criminals, but if we focus on that alone, we risk missing the more important characteristics and properties of decentralized systems.  It’s a little bit like saying the original internet is only good for porn and copyright infringement, and stopping there.

For today, let’s focus on one key aspect of decentralized systems — a characteristic that was fundamental to the creation of the original internet protocols: resilience.

I like this definition of resilience: “an ability to recover from or adjust easily to misfortune or change”.

For example: decentralized mesh networking is resilient to centralized telecommunications going offline in the case of a disaster (as happened in NYC during Superstorm Sandy).  USV portfolio company goTenna was founded out of the Sandy experience, and now serves a wide customer base of first responders, law enforcement and military who desperately need communications that are resilient to traditional network failure.

Or, decentralized HTTP/DNS (e.g., IPFS) which is resilient to infrastructure failure and censorship, as demonstrated by IPFS’s republishing of wikipedia in Turkey during internet censorship there.  IPFS, generally, is a major improvement to content addressing on the web, adding substantial resilience by detaching physical location from the logical address of content.

Or, a simple example that Joel typically uses: the Bitcoin network has had 100% uptime for 10 years.

These are real, important properties.  Remember, the original internet protocols were designed so that the network could withstand nuclear and other major attacks.  Many centralized systems trade convenience for fragility, and resilience is a real, valuable property.

Coming up, I’ll look at other important properties of decentralized systems: platform risk, security, and innovation.

   

  • thanks for this post. i’m a little unclear on the inner workings of IPFS, and was hoping you or a reader could clarify. is the URL still a choke point for IPFS? so in the turkey wikipedia link you shared, if some backbone host were to block that URL, that would be a way to attempt to censor?

    • That is exactly what IPFS removes

      Instead of a static URL/IP address tied to a server, you get a unique content hash and the content can be served from anywhere

  • jason wright

    “The ‘winners’ created in the wake of Bittorrent disruption (Spotify and Netflix) shed any semblance of decentralization — it simply wasn’t necessary any more, and actually made things harder. But their success was the result of a paradigm shift where files were abstracted away. In the wake of disruption brought by Bitcoin or other cryptocurrency systems, what will be abstracted away? What will be the paradigm shift? And will a decentralized architecture become irrelevant once the ‘new’ way is identified?” I’m going to save this and print it out and tape it to my forehead. If i come up with the answer i will distribute it as the product of my new startup.

  • Simon Morris

    First many thanks Nick for promoting my posts – I’m truly honored.
    I have a couple of comments – first is that I don’t necessarily think we should shy away too much from rule-breaking. I completely agree it’s sad that some people try to deposition cryptocurrencies as only about Silk-Road-type stuff, but many rules make literally no sense for anyone except some very narrow group of stakeholders. Truly decentralized systems perhaps offer us the best way yet to rebel against those rules. (Of course stating that as an intent can be a problem as I discuss…)
    Secondly I agree completely that there are qualities of some decentralized tech that are simply more resilient for some use-cases. But I’m classifying these outside of the crypto investment thesis. They might be valuable but I’m not sure they’re anything new.

    • jason wright

      …many rules make literally no sense for anyone except some very narrow group of stakeholders. Do you have a list of such rules you could share here?

    • Thanks Simon

      I agree that a big part of innovation, generally, is rethinking the rules — call it experimentation, disruption, innovation, etc. Sometimes we just need to try new things and see what happens, and sometimes a new technology (especially this kind) makes existing rules obviously incompatible, irrelevant, obsolete, etc

      I am mostly hoping to avoid just getting stuck in the silk road narrative, because while I agree there is a “route around the failure” capability that can be used to skirt some rules and regulations, I don’t think that is the whole story, and if we look at other decentralized architectures, over a long period of time, these other properties are really important

      I personally do see them as part of the crypto thesis, but I also undersrand that it will take a while for them to become clear

  • Simon’s posts are great. I hadn’t seen them before.
    The way I characterize decentralization is – “It’s a Defense Mechanism”.
    —> http://startupmanagement.org/2019/01/14/unpacking-decentralized-governance-in-the-blockchain-era/

  • jason wright

    I was thinking about the idea that the crypto ICO is a rule breaking behaviour. It is breaking an established rule, but it is not establishing a legitimate new rule and paradigm of fund raising if it simply enables mass fraud. At present it is (in my view) discredited as a funding model in the crypto space. How will it come to be viewed as credible? How can the space be cleaned up? With so many ICOs now seen to be outright scams (the passing of time does that) i’m not sure what will save the model from permanent disrepute. Rules are not always there to be broken. Some exist for very good historical reasons, and usually in response to observed weaknesses of human nature, which do not change as time passes.

    • I think we will come to identify a way of launching crypto networks including with tokens that don’t violate securities laws

      I think many of the icos from 2017 and 2018 actually did not violate those laws and some of that will need to be tested in court

      But I am confident that issuing and distributing tokens will continue to be a thing, and the right way to do it will become clear