Web 3.0 – A New Hope

The previous article of the series was very gloomy about the current state of the Web, but we promised that we were going to be much more optimistic about the future in this issue of the Blockchain for Books series.
In fact, a new generation of distributed P2P and blockchain-based technologies for file sharing and storage, called IPFS and Filecoin, have the potential to shake up the status quo, correct the pitfalls of Web 2.0 and let us enter into the “Web 3.0” era.
A comprehensive analysis by Stefano Tombolini, blockchain analyst and WordPress implementer at Tombolini & Ascciati.

Looking beyond rewarding creators with crypto

Firstly, we must confess that, in our view, financing the production of online content is a secondary issue when the decentralized architecture of the World Wide Web is threatened by the same market concentration of online services that has created the Facebook-Google duopoly in the advertising industry.

Nevertheless, for sake of completeness, we will first briefly address this question from a blockchain point of view. We will then go on to deal with nothing less than potential blockchain-based alternatives for the HTTP protocol and cloud storage themselves.

The End of Digital Advertising as We Know It, published almost two years ago in the online business analysis journal of the Wharton School of the University of Pennsylvania, clearly states that free content coupled with advertising revenues is an obsolete monetization model, a legacy of an old world where ads were the only way to pay for media.

Facebook executives themselves have recognized that the “ad load”, i.e. the relative volume of advertising vs. content, is no longer able to drive the growth of advertising revenues.

Furthermore, the use of ad-blocking solutions (browser extensions, proxy servers, etc.) by end users is on the rise, and it is technically challenging and legally difficult for the advertising industry to counteract against a free choice of their own intended audience.

In such a scenario, how can blockchain technology help to reward content creators? Let us concentrate on existing user-friendly solutions readily available for WordPress, the CMS that powers the greatest part of the independent online media industry (31% of all websites).

The most obvious answer is simple: cryptocurrency payments. The Author Payroll extension for the Bitcoin and Altcoin Wallets WordPress plugin allows website managers to automatically pay their article authors with cryptocurrencies based on Google Analytics metrics.

Unfortunately, this does not solve the fundamental conundrum of getting end users to pay for the content in the first place. Again, blockchain technology could come to rescue in the form of a peculiar cryptocurrency called Monero.

Monero is a cryptocurrency that, compared to Bitcoin, has a stronger focus on security, privacy and untraceability. For the purpose of this article, the most interesting feature of this cryptocurrency is CryptoNight, Monero’s mining algorithm.

The mining algorithm is an essential part of the cryptographic puzzle that miners try to solve in order to create and gain new coins in exchange for validating transactions for the network.

CryptoNight is one of the few mining algorithms that, unlike Bitcoin itself, have proven to be resistant to the development of specialized mining hardware equipment (ASICs). ASIC resistance is generally considered to be a desirable feature for a cryptocurrency since it levels the playing field in the mining landscape.

Therefore, Monero can be mined quite efficiently with standard consumer-level processors (CPUs and GPUs), and even with client-side JavaScript programs that a website can run on the user’s browser.

Initially, such a solution was exploited in the form of malicious code (malware) infecting browsers and websites in order to create Monero-mining botnets (groups of “zombie” computers infected by malware) without the user’s consent.

However, these same scripts can be used legally to monetize visits: a number of WordPress plugins already exist to mine Monero coins via the user’s browser.

The best of such plugins also use the very same mining technology for improved security (proof-of-work login form captchas) and allow users to start/stop mining, control mining speed, and much more.

Cryptocurrency mining as a form of payment without a direct disbursement of money by end users is as fascinating as it gets, yet there is a more pressing problem: is the effort of building independent websites still worthwhile in the platform era, dominated by ubiquitous cloud solutions, social networks and marketplaces that concentrate and aggregate services, content, products and users?

Stay positive: in Web 3.0 we trust. Keep on reading.

Replacing the HTTP protocol: IPFS

Partly due to selective mass media attention, when we talk about blockchain most people think of cryptocurrencies (primarily Bitcoin) and their exchange rate with respect to the fiat currencies (the US dollar, usually). Nevertheless, blockchain technology has much greater potential in a broader range of applications.

It has also the prestige of having revamped research interest in consensus protocols and distributed networks.

Since the early 2000s, distributed networks have always been associated with piracy: think of Napster, eMule and BitTorrent. Since then, many entrepreneurs have been struggling to find an economically viable and legally acceptable application of distributed technologies, without significant success.

The Internet itself was born as a decentralized system, with Internet service providers (ISPs) connected with each other and functioning as central hubs for their respective subnetworks.

With the advent of Web 2.0, something unexpected happened: the World Wide Web, the network of linked resources exchanged over the Internet, came to be more and more centralized in few giant cloud service providers.

So now people are digging again into distributed technologies to change the current situation: is the WWW ready to adopt a new architecture, a distributed Web 3.0?

That is precisely the dream of Juan Benet, founder of the IPFS project.

For many years, the HTTP protocol coupled with the web browser has represented a “good enough” distributed system of files. But nowadays, there is “lots of data, accessible everywhere”, subsequently generating new needs:

  • petabyte datasets;
  • large data computing across organizations;
  • high-volume, high-definition on-demand or real-time media streams;
  • versioning and linking datasets;
  • prevention of disappearance.

IPFS is an ingenious and creative implementation of a peer-to-peer distributed file system: imagine it as a network of untrusting BitTorrent peers (swarm) cooperating to distribute pieces of files.

The BitTorrent swarm contains objects whose changes are tracked by the Git version control system. A fundamental advantage with respect to HTTP URLs (Uniform Resource Locators) is that every object (files, directories, changes and links) is versioned and content-addressed, not location-addressed.

In order to link an IPFS resource, one does not refer to a specific server supposed to own that resource, instead the link points to a unique identifier tied to the exact required content, whose retrieval is automatically optimized based on the peers owning that same resource and the state of the IPFS network.

The Web 3.0 as envisioned by the IPFS team is a global, low-latency permanent distributed network that prevents addressed-based censorship, helps developing countries with limited or low access to the cloud and offers the possibility to clearly identify fake news and efficiently act upon it.

Reinventing cloud storage: Filecoin

In addition to IPFS, Protocol Labs, Juan Benet’s company, is launching another revolutionary project: Filecoin.

Filecoin is a blockchain-based decentralized storage network, aimed at reducing market concentration of cloud storage providers (Amazon Web Services, Google Cloud, etc.) and offering an incentive layer for people to participate in the IPFS network.

In 2017, Filecoin raised an astounding $257 million to launch its eponymous coin token, which will power an algorithmic, blockchain-based storage market.

Most cryptocurrencies are mined using computing power, which consumes considerable amounts of electricity due to the complexity of the cryptographic puzzles employed.

Filecoin miners, au contraire, mine blocks in proportion to active storage, a much more ecological solution. In fact, the physical replication and content encryption of data are guaranteed by two novel proofs-of-storage:

  • Proof-of-replication: which proves that, at a given moment, data has been physically replicated and is available for retrieval;
  • Proof-of-spacetime: which could be considered as a repeated proof-of-replication, proving continuous data replication and availability.

Eventual consensus protocols based on proof-of-spacetime can be considered examples of proof-of-useful-work: they do not “waste” resources just to build a consensus but “recycle” those same resources to provide useful services.

Thanks to these innovations, the Filecoin protocol creates a decentralized storage network composed of two verifiable algorithmic markets:

  • the storage market, for buying storage space;
  • the retrieval market, for retrieving previously stored content.

Large data centers with high-capacity disks will have a competitive advantage in the storage market, while the retrieval market will be populated by highly-connected hubs using disks with good input/output speed.