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Splinternet: A Short Story | Finn Brunton – CoinDesk

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In 2030, at the interminable tail end of another hot, smoky summer in Mexico City, the power went out again and she went down into the basement where it was cooler. Other people from the apartment block were already sitting on the gritty concrete: snacking, vaping, talking, thumbing through their devices and killing time. People shared charging bricks in a neighborly way. She had three phones; most people she knew had anywhere from two to seven. 

Finn Brunton is an assistant professor in the Department of Media, Culture, and Communication at NYU and author of “Digital Cash: The Unknown History of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency.” This post is part of CoinDesk’s “Internet 2030” series.

The phone she needed for university was expensive: a German-made, handy model, code-compliant with what the phone called SBI, “Schengen Boundary Internet,” but everyone else called the “EUnternet.” The phone was locked down and tamperproof, the software highly regulated for privacy, security and accuracy, constantly cautioning you in stiff, formal language. It was built around the European Union’s blockchain watermarking and timestamping system: Every message, note, and post, every photo shared on social media, every video lecture from her professors in Italy, was verified authentic in an unfalsifiable chain of custody from key-signed origin to destination. When she looked at the EUnternet’s newsfeeds, the pages and documents came with a ghostly shimmer of controls for moving back through all edits and updates, stored in a permanent, public archive. 

you were exposed – all your actions cryptographically signed

Like the “World Wide Web” her history professors talked about, this technology had started in the sciences and then been adopted by the public, moving from narrow purpose to general. Built to improve data sharing for scientific collaboration, it had grown into a system of digital dams and dikes raised against propaganda, fakes, disinformation and bot-army swarms pumping a media feed of self-reinforcing and self-amplifying psychopathology. EUnternet life was like a visit to a well-run hospital: you were exposed – all your actions cryptographically signed – but that exposure was made acceptable, more or less, by the heavyweight architecture of privacy regs and confidentiality doctrines that governed every interaction with your data. The design was uniformly accessible, clear, sober and bland. You felt safe, clean, looked after and intimately managed, doing the responsible thing in a completely regulated environment with a public ID tag always on your wrist. 

See also: Self-Sovereign Identity Explained

Her second phone was her job. It was how she paid for the first phone and its window into the EUnternet. It was her U.S. internet phone, so it couldn’t work with the protocols of the internets in Brazil, Russia, China or any of the others – but she couldn’t legally work in those networks anyway. It was in grippy hunter’s orange, injection-molded plastic, made in a factory in Vietnam and speckled with cryptic logos and DRM symbols. Like most people with an internet phone, she had partitioned it with the help of an aftermarket technician who had also installed a nice physical selector to switch between the partitions, since each was for a different set of apps and platforms that belonged to different corporations. Some apps would refuse to be installed on the same phone as others; some, on the same phone, tried to sabotage each other in the background by throttling internet traffic, running covert attacks and redirecting requests from one platform to another. So she kept them apart, each to their partition and thinking themselves in sole possession of the rectangle of glass: Amazon, Facebook, Wazhul, Tencent and Alphabet. For Amazon she remote-piloted delivery and logistics robots all over the world and wrote fake customer reviews; for Facebook she babysat and did senior citizen check-ins in VR, shared memes and wrote fake reactions for pay; for Wazhul she played the boring parts of games for people; for Tencent she played other boring parts of games for people and was a professional friend; for Alphabet she watched ads as 16 different demographics. 

Each partition had different money. Amazon paid in store credit; Facebook paid in libra; Wazhul paid in game resources; Tencent paid in marketplace coupons; Alphabet paid in a mix of high-speed data, content plays and miles in autonomous vehicles. Her various wallets packaged, bundled, bought and sold these and many other things second by second. Her savings, such as they were, were a constantly fluctuating set of food delivery coupons, cryptocurrencies, rare Pepes, Starbucks Rewards, hours of on-demand therapy, collectible cards, miles on airlines she would never fly, minutes of shelter in a chain of capsule hotels in a city she would never visit, and more. On the rare occasions when she needed to pay something in pesos or dollars, her wallets would make deals on marketplaces across the world and she would get a virtual debit card – always for a smaller amount than she was hoping. The marketplaces took a fee; the debit card took a fee; her wallets took a fee; the money took a fee to be traded for a different kind of money. This was the way it worked on the internet, a cross between a maquiladora and a mall with no exit. 

See also: What Happens if Big Tech Only Gets Bigger?

The internet phone was five clashing powers, five warring agendas and aesthetics, on one cheap box. Each platform constantly implored her attention and pinged her with sleazy come-ons that reflected their intimate surveillance of her data and activity; they had the sweaty, bad-boundaries energy of getting game from a pick-up artist at a bar. The content was largely machine generated, and mostly bizarre and inexplicable to her. It was driven by steadily refined engagement metrics that narrowed and escalated one subculture after another, where people lived in completely coherent, internally consistent, closed universes fed by a constant drip of confirmation, panic, porn and anger. Every day she was informed about healing by exposure to analog TV broadcast antennas, or the replacement of public figures by clones, or why to kill this or that group of people: following a pushy new hashtag felt like turning over a dead log in the forest. 

The last phone she had was the most personal. It was old, clunky, inefficient, patched up with tape and running a sideloaded operating system that booted up into strings of text in unreadably tiny type before the jittery icons appeared. It was slow: It connected to platforms that passed data from phone to phone, duplicating and sharing as they got copies, or to networks that anonymized and rerouted every request so that it appeared to come from Lagos, Montreal, or Djakarta, assembling the shards back in her hand in Mexico City. The networks, platforms and programs had names like Chia, Mastodon, Cicada3303, moTOR, Hak Nam, ZettelMünze, Urbit, Paquete. They hid inside other networks, living interstitially in the world’s internets like mice in the walls of a building, moving traffic through the Panama Canal of other people’s data. This loose agglomeration of disparate technologies was called the darknet/red oscura/réseau obscur – though many parts of it were not particularly dark, they were just owned by no country or megacorporation. 

Media came and went without warning here. People and bots kept informal lists of where different conversations and archives could be found as they moved; every time she unlocked the phone it was like coming back to town, asking around with the aid of nicknames, high signs, secret handshakes and allusive references to learn where to go and what was up. The phone was chronically low on memory, because most of it she had set aside as encrypted space, to which she had no key, for the data of strangers. Her life was likewise sharded across phones, media centers, hacked household appliances and computers around the world. 

The darknet was all corners, a shape made of nothing but corners, and you found the corners where you could live.

On the EUnternet she was a public citizen: standing up straight in sensible shoes, speaking respectfully at a never-ending town hall, with a stenographer taking her remarks for the record. On the U.S. internet she was a resource: scrutinized and hassled, her work time and attention auctioned off, paid in company scrip to buy goods at the company store, her activity bundled and packaged and sold to boost some unfathomable corporate synergy and squeeze out a little more value to the shareholders. But on the darknet she could breathe. She could get weird. She could be herself – under nicknames, pseudonyms or no name at all. She had other resources here: favors she was owed, gifts given and received, post-monetary mutual aid networks that threaded through the world right into her neighborhood, and her rights of access to specialized tools and conversations. The EUnternet and the U.S. internet were both utterly open and unobstructed spaces on which you were as exposed as an ant on a white tablecloth – the only difference was that in one you knew who was watching, and in the other you didn’t. The darknet was all corners, a shape made of nothing but corners, and you found the corners where you could live. Her corners of the darknet were patient, slow, quiet, and obsessive – as she was herself. Here they worked on projects together, wrote things, built things, that didn’t have to make money or make sense to anybody else. They didn’t make what they made to try to please a recommendation algorithm, to trend, to engage; there were no metrics beyond their own idiosyncratic standards.  

See also: Marc Hochstein – Money Reimagined: Let’s Be Privacy Scolds

In the apartment basement, the lights flickered back on; power was back. She grabbed her phones in a stack, like a deck of cards, and walked back upstairs with her three different selves and their worlds held in one hand.





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DeFi Still Needs a Silk Road Moment

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Mainstream criminal adoption would prove that decentralized finance (DeFi) is building tools with real utility, because if there’s any one group that is both underserved in its access to sophisticated financial products and willing to pay huge premiums to acquire them, it’s criminals. 

The Silk Road was launched in February of 2011 and quickly became the first example of Bitcoin’s product-market fit. While some proponents of cryptocurrencies argue that today criminal activities are a small percentage of all cryptocurrency transactions, censorship resistance is one of the key features of all decentralized technologies and criminals have played a part in crypto’s wider adoption. 

Boaz Sobrado works in tech, bringing the opportunities of the internet to those who need them most.

Bitcoin’s ability to make payments “the man” doesn’t want you to make is what makes the cumbersome tech worth it. This can include criminal activity such as ransomware and darknet markets (DNMs), but also funding Sci-Hub (a rogue academic publisher) and opposition leaders in oppressive regimes.

Adoption by criminal enterprises is evidence of the product/market fit of censorship-resistant technologies and an indicator of whether innovation will see usage in the non-criminal world. It would have not been possible to create the Silk Road without a truly effective censorship resistant payments method. The fact that Silk Road and other criminal enterprises are able to use bitcoin effectively is evidence cryptocurrencies are a useful and censorship resistant tool. As of now criminal activity online is mostly based on bitcoin, although other cryptocurrencies, such as monero, also play a part.

The 2017 initial coin offering bubble and “games” like FOMO3D have shown that Ethereum is useful for a different sort of criminal activity: unregistered security sales and other elaborate Ponzi schemes. In a way, this is evidence of its effectiveness as a permissionless smart contract platform. But just because Ethereum has proven itself to be useful for Ponzi schemes and scams does not mean it is useful for more than that. Criminal adoption is a necessary, but not a sufficient, condition for the success of censorship-resistant technologies.

The latest hot new trend on Ethereum is decentralized finance (DeFi). According to Associate Professor Jeremy Eng-Tuck Cheah, DeFi is the ability to create and use “financial services using smart contracts, which are automated enforceable agreements that don’t need intermediaries like a bank or lawyer and use online blockchain technology instead.” 

I’ll believe DeFi has a product-market fit when drug smugglers can buy trust-minimized insurance for their shipments and retail speculators can gamble on the price of cocaine in Australia the same way they do with the price of oil in Texas.

These contracts are programmable and can be built into decentralized applications (dapps). We now have automated market makers, decentralized autonomous organizations (DAOs) that play an important role in funding allocation, protocols such as UMA and SNX for building synthetic assets that mimic the price action of off-chain assets, decentralized price oracles such as Chainlink to bring off-chain data onto smart contracts, and all sorts of other infrastructure that were not available in 2017.

Some would argue this is not new infrastructure, but these are just fishy toys designed to take money away from fools. Is there real utility to this new financial infrastructure? Or are most of the problems DeFi is solving problems the same problems DeFi caused in the first place, as Nic Carter believes? 

There are a few hints that financial infrastructure of criminals is being built. One of the largest DNMs, Hydra, considered doing an ICO late last year but eventually desisted. Given the extensive history of DNM exit scams, it is highly risky that a DNM would be tempted to take the funds they raised and run. The largest and most trusted DNM, Empire Market, recently exit scammed, reportedly taking $30 million in BTC of user’s funds. Given that governance tokens are all the rage these days, why not set up a market that can be owned and managed by both the users and the vendors in a trust-minimized way? Think Uniswap meets the Silk Road.

Another product DNM vendors would gladly purchase are insurance products that protect against market exit scams and other sources of systemic risk, such as continued DDOS attacks against DNM sites. Current DeFi analogs include Nexus Mutual.

Disputes over insurance claims and even over drug shipments could also be handled in a decentralized way. Dispute resolution is one of the most resource-consuming problems of DNMs, and dispute resolving admins are proven to be security holes as a trusted third party. Why not outsource dispute resolution to a decentralized platform such as Kleros?

The price information on the DNMs themselves can be used to create financial products. A price index can easily be assembled for a variety of products ranging from high-purity cocaine in Florida to amphetamines in Australia. In the same way the West Texas Intermediate (WTI) oil price is a reference price for oil markets, the South Florida Cocaine index could be a reference point for cocaine markets. Synthetic assets such as perpetual swaps could be built upon the price index using the Perpetual Protocol or SNX. Producers and smugglers would then be able to hedge their positions, in the same way airlines hedge their fuel costs for the year using WTI futures.

History doesn’t repeat itself, but it rhymes. If these projects truly are censorship resistant and create value, we will inevitably see them adopted by those who need them most: criminals. I’ll believe DeFi has a product-market fit when drug smugglers can buy trust-minimized insurance for their shipments and retail speculators can gamble on the price of cocaine in Australia the same way they do with the price of oil in Texas.

For the DeFi enthusiasts reading this, it may be worth thinking: Will we be seeing this sort of adoption? If not, what is stopping it from happening? Those reasons are the true obstacles to the growth of DeFi adoption.





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Should We Care if the US Is Falling Behind on CBDCs?

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A reading of two recent op-eds on central bank digital currencies (CBDCs).



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Bitcoin Closes Above $13K for First Time Since January 2018 Driven by a Flurry of Good News

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Bitcoin had previously failed to close above $13,000 every day since Jan. 15, 2018.



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