Archive for the ‘Decentralization’ Category

Taking Back the Web with Decentralization: 2023 in Review – EFF

When a system becomes too tightly-controlled and centralized, the people being squeezed tend to push back to reclaim their lost autonomy. The internet is no exception. While the internet began as a loose affiliation of universities and government bodies, that emergent digital commons has been increasingly privatized and consolidated into a handful of walled gardens. Their names are too often made synonymous with the internet, as they fight for the data and eyeballs of their users.

In the past few years, there's been anaccelerating swing back toward decentralization. Users are fed up with the concentration of power, and the prevalence of privacy and free expression violations, and many users are fleeing to smaller, independently operated projects.

This momentum wasnt only seen in the growth of new social media projects. Other exciting projects have emerged this year, and public policy is adapting.

After Elon Musk acquired Twitter (now X) at the end of 2022, many people moved to various corners of the IndieWeb at an unprecedented rate. It turns out those were just the cracks before the dam burst this year. 2023 was defined as much by the ascent of federated microblogging as it was by the descent of X as a platform. These users didn't just want a drop-in replacement for twitter, they wanted to break the major social media platform model for good by forcing hosts to compete on service and respect.

The other major development in the fediverse came from a seemingly unlikely sourceMeta.

This momentum at the start of the year was principally seen in the fediverse, with Mastodon. This software project filled the microblogging niche for users leaving Twitter, while conveniently being one of the most mature projects using the ActivityPub protocol, the basic building block at the heart of interoperability in the many fediverse services.

Filling a similar niche, but built on the privately developed Authenticated Transfer (AT) Protocol, Bluesky also sawrapid growth despite remaining invite-only and not-yet being open to interoperating until next year. Projects like Bridgy Fed are already working to connect Bluesky to the broader federated ecosystem, and show some promise of a future where we dont have to choose between using the tools and sites we prefer and connecting to friends, family, and many others.

The other major development in the fediverse came from a seemingly unlikely sourceMeta. Meta owns Facebook and Instagram, which have gone to great lengths to control user dataeven invoking privacy-washing claims to maintain their walled gardens. So Metaslaunch of Threads in July, a new microblogging site using the fediverses ActivityPub protocol, was surprising. After an initial break-out success, thanks to bringing Instagram users into the new service, Threads is already many times larger than the fediverse and Bluesky combined. While such a large site could mean federated microblogging joins federated direct messages (email) in the mainstream, Threads has not yet interoperated, and may create a rift among hosts and users wary of Metas poor track record in protecting user privacy and content moderation.

We also saw the federation of social news aggregation. In June, Reddit outraged its moderators and third party developers by updating its API pricing policy to become less interoperable. This outrage manifested into a major platform-wide blackout protesting the changes and the unfair treatment of the unpaid and passionate volunteers who make the site worthwhile. Again, users turned to the maturing fediverse as adecentralized refuge, specifically the more reddit-like cousins of Mastodon, Lemmy and Kbin. Reddit, echoing Twitter once again, also came under fire for briefly banning users and subreddits related to these fediverse alternatives. While the protests continued well beyond their initial scope, and continued to remain in the public eye, order was eventually restored. However, the formerly fringe alternatives in the fediverse continue to be active and improving.

Some of our friends are hard at work figuring out what comes next.

Finally, while these projects made great strides in gaining adoption and improving usability, many remain generally small and under-resourced. For the decentralized social web to succeed, it must be sustainable and maintain high standards for how users are treated and safeguarded. These indie hosts face similar liability risks and governmental threats as the billion dollar companies. In a harrowing example we saw this year, an FBI raid on a Mastodon server admin for unrelated reasons resulted in the seizure of an unencrypted server database. Its asituationthat echoes EFFs founding case over 30 years ago, Steve Jackson Games v. Secret Service, and it underlines the need for small hosts to be prepared to guard against government overreach.

With so much momentum towards better tools and a wider adoption of better standards, we remain optimistic about the future of these federated projects.

This year has also seen continued work on components of the web that live further down the stack, in the form of protocols and libraries that most people never interact with but which enable the decentralized services that users rely on every day. The ActivityPub protocol, for example, describes how all the servers that make up the fediverse communicate with each other. ActivityPub opened up a world of federated decentralized social mediabut progressisn't stopping there.

Some of our friends are hard at work figuring out what comes next. The Veilid project was officially released in August, at DEFCON, and the Spritely project has been throwing out impressive news and releases all year long. Both projects promise to revolutionize how we can exchange data directly from person to person, securely and privately, and without needing intermediaries. As we wrote, were looking forward to seeing where they lead us in the coming year.

The European Unions Digital Markets Act went into effect in May of 2023, and one of its provisions requires that messaging platforms greater than a certain size must interoperate with other competitors. While each service with obligations under the DMA could offer its own bespoke API to satisfy the laws requirements, the better result for both competition and users would be the creation of a common protocol for cross-platform messaging that is open, relatively easy to implement, and, crucially, maintains end-to-end encryption for the protection of end users. Fortunately, the More Instant Messaging Interoperability (MIMI) working group at the Internet Engineering Task Force (IETF) has taken up that exact challenge. Weve been keeping tabs on the group and are optimistic about the possibility of open interoperability that promotes competition and decentralization while protecting privacy.

DWeb Camp 2023

The star-studded gala (such as it is) of the decentralized web, DWeb Camp, took place this year among the redwoods of Northern California over a weekend in late June. EFF participated in a number of panels focused on the policy implications of decentralization, how to influence policy makers, and the future direction of the decentralized web movement. The opportunity to connect with others working on both policy and engineeringwas invaluable, as were the contributions from those living outside the US and Europe.

Blockchain Testimony

Blockchains have been the focus of plenty of legislators and regulators in the past handful of years, but most of the focus has been on the financial uses and implications of the tool. EFF had a welcome opportunity to direct attention toward the less-often discussed other potential uses of blockchains when we were invited to testify before the United States House Energy and Commerce Committee Subcommittee on Innovation, Data, and Commerce. The hearing focused specifically on non-financial uses of blockchains, and our testimony attempted to cut through the hype to help members of Congress understand what it is and how and when it can be helpful while being clear about its potential downsides.

The overarching message of our testimony was that blockchain at the end of the day is just a tool and, just as with other tools, Congress should refrain from regulating it specifically because of what it is. The other important point we made was that the individuals that contribute open source code to blockchain projects should not, absent some other factor, be the ones held responsible for what others do with the code they write.

Adecentralized system means that individuals can shop for the moderation style that best suits their preferences.

Moderation in Decentralized Social Media

One of the major issues brought to light by the rise of decentralized social media such as Bluesky and the fediverse this year has been the promises and complications of content moderation in a decentralized space. On centralized social media, content moderation can seem more straightforward. The moderation team has broad insight into the whole network, and, for the major platforms most people are used to, these centralized services have more resources to maintain a team of moderators. Decentralized social media has its own benefits when it comes to moderation, however. For example, a decentralized system means that individuals can shop for the moderation style that best suits their preferences. This community-level moderation may scale better than centralized models, as moderators have more context and personal investment in the space

But decentralized moderation is certainly not a solved problem, which is why the Atlantic Council created the Task Force for a Trustworthy Future Web. The Task Force started out by compiling a comprehensive report on the state of trust and safety work in social media and the upcoming challenges in the space. They then conducted a series of public and private consultations focused on the challenges of content moderation in these new platforms. Experts from many related fields were invited to participate, including EFF, and we were excited to offer our thoughts and to hear from the other assembled groups. The Task Force is compiling a final report that will synthesize the feedback and which should be out early next year.

The past year has been a strong one for the decentralization movement. More and more people are realizing that the large centralized services are not all there is to the internet, and exploration of alternatives is happening at a level that we havent seen in at least a decade. New services, protocols, and governance models are also popping up all the time. Throughout the year we have tried to guide newcomers through the differences in decentralized services, inform public policies surrounding these technologies and tools, and help envision where the movement should grow next. Were looking forward to continuing to do so in 2024.

This blog is part of our Year in Review series.Read other articles about the fight for digital rights in 2023.

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Taking Back the Web with Decentralization: 2023 in Review - EFF

Vitalik Buterin Blames Rising Transaction Fees for Web3’s Drift from Decentralization – Cryptonews

Source: ShutterStock

In a recent blog post titled Make Ethereum Cypherpunk Again, Ethereum co-founder Vitalik Buterin expressed concerns about the veering trajectory of Web3 from its original vision.

Buterin contends that the foundational principles of Web3 have gradually receded as various projects within the cryptocurrency space shift focus away from the core idea of decentralization.

Buterin identifies a substantial ideological divide, where segments of the non-blockchain decentralization community view the crypto world as a distraction rather than a kindred spirit and potent ally.

Initially coined by Ethereum co-founder Gavin Wood, the term Web3 was conceived not merely as Bitcoin plus smart contracts but as part of a broader set of technologies forming the foundation of a more open internet stack.

However, Vitalik Buterin observes that the practical use of cryptocurrency for financial transactions in many countries often relies on centralized means, such as internal transfers on centralized exchange accounts or trading USDT on platforms like Tron.

Vitalik Buterin points to a significant culprit behind the observed shift the surge in transaction fees. When the cost of interacting with the blockchain was minimal, ranging from $0.001 to $0.1, developers envisioned diverse applications using blockchain technology in both financial and non-financial realms. However, with transaction fees surpassing $100, Buterin highlights the increasing prominence of degen gamblers high-risk traders as a dominant user group.

As degen gamblers become the primary users on a large scale, Buterin argues that this reshapes public perception and internal culture within the crypto space. He emphasizes that the rise in transaction fees has played a pivotal role in steering Web3 away from its decentralized ethos.

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Decentralization and Digital Power: HighKey CMO Jordan Lintz’s Take on the New Social Media Era – Grit Daily

Mainstream social media platforms have long been digital interaction and content-sharing pillars. Dominated by a few major players, these platforms have shaped how we connect, share, and consume information, providing unparalleled connectivity.

However, while this model is effective in building virtual communities, it has often raised concerns regarding privacy, content ownership, and the extent of corporate influence over user experiences. These increasing worries have recently caused an interesting shift, paving the way for a new player to emerge on the scene: decentralized social media built on a model that puts control back into the hands of the users.

As the CMO of HighKey Enterprises, LLC, Jordan Lintz is no stranger to social media. He and his brothers, Luke and Jackson, have made significant strides in digital marketing and e-commerce. Over the years, hes gotten acquainted with social media platforms down to the granular level, giving him a unique perspective on the current state of things and what might come next.

In Lintzs perspective, the current state of mainstream social media leaves much to be desired regarding content ownership. He argues that users rent space on these platforms and have little say in managing or monetizing their content. In the existing model, users create value, but platforms reap most of the benefits, he says.

Moreover, he expresses concerns about account control and privacy on mainstream platforms where users are practically at the mercy of a model tweaked against the users favor.Access can be restricted, data can be monetized, and even the visibility of your content can be altered without your consent, Lintz says.

On the other hand, he argues that decentralized social disrupts this dynamic and offers a solution to this imbalance. Here, content creators are at the helm. They have direct control over their creations, dictating how its managed, distributed, and, more importantly, monetized a sharp contrast to the conventional model.

Without a doubt, this fundamentally alters the creator-platform dynamic, transforming users from passive participants to active proprietors of their digital assets.

Moreover, decentralized social provide enhanced protection for personal data. By leveraging blockchain technology to distribute data across multiple nodes instead of storing it in a single location, decentralized social media allow individuals to own their content instead of surrendering it to the platform itself.

These models ensure data isnt concentrated in a single point of failure, and, in doing so, they greatly reduce the risk of data breaches, Lintz states. Its a one-of-a-kind shift to restoring virtual sovereignty and empowering people to regain control over their digital identities.

But, like with any revolutionary concept, decentralized social media platforms face unique challenges. For one, the unfamiliarity and complexity behind them can make non-tech-savvy users feel overwhelmed or intimidated, especially when comparing this structure to the simplicity of traditional platforms.

Furthermore, while the concept of complete user control is appealing, it raises questions about content moderation and accountability. Misuse must be prevented in a system where individuals have total control over their content. As Lintz highlights, there has to be a balance between freedom and responsibility.

Decentralization isnt a utopia, and it has its own set of challenges, some of which will be quite complex to tackle, but its not entirely impossible to do that, he says. If we manage to strike that balance, well be taking a gigantic step toward in the digital realm, turning people into stakeholders, in a way, instead of them just being consumers.

While the road ahead may be ridden with unique challenges, the advantages of decentralization simply cant be ignored. Aside from maintaining data control and privacy, which can dramatically reshape online interactions on an economic level, these platforms could change traditional business models by redistributing value in favor of users. Content creators who contribute to the platforms growth and popularity would be rewarded for their efforts, leading to a more equitable distribution of wealth.

Moreover, Jordan Lintz proposes that cryptocurrency use for transactions within these platforms could impact economies further. Decentralized social media could foster a singular kind of financial inclusion by providing access to digital assets and financial services to those lacking access to conventional banking services.

As Lintz highlights, Were on the brink of a major shift in online interaction and digital economies. We may look at a more equitable and user-centric future where value creation and distribution are better managed.

Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.

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Decentralization and Digital Power: HighKey CMO Jordan Lintz's Take on the New Social Media Era - Grit Daily

Bitcoin Mining Pool Ocean Successfully Mines Third Block in Ongoing Decentralization Quest – Cryptonews

Ocean succeeded in mining their third Bitcoin block, showing the decentralized mining pools capabilities. Image by Kerem Goktug Kaya, Adobe Stock.

The decentralized Bitcoin mining pool Ocean reached a new milestone this week by successfully mining its third block ever. According to data from Mempool.Space, Ocean mined block number 823,129 on Wednesday morning, earning a total block reward of 7.412 bitcoins. This achievement demonstrates the capabilities of Oceans decentralized system, which was launched in November 2022 to promote decentralization in Bitcoin mining.

Mononaut, a key figure at BitfeedLive, an open-source Bitcoin mempool visualizer, brought attention to Oceans distinctive mining approach after the milestone.

The block was constructed using their standard filtered template, only containing 1 inscription and 54 op_returns (mostly Runes), the analyst tweeted. The filtering cost them ~0.144 BTC in fees, which is an 11.03% reduction in fees or about a 2% reduction in total block reward.

Oceans current hash rate stands at 525 ph/s, making it a small but not insignificant player in the competitive Bitcoin mining sector.

The launch of Ocean mining was announced on November 28 by Bitcoin Core developer Luke Dashjr. The initiative, supported by a $6.2M round led by notable figure Block Head Jack Dorsey, seeks to challenge the current norms of Bitcoin mining pools and promote a more decentralized approach.

Dashjr, in a statement on October 31, emphasized the necessity of such an initiative. He expressed concerns over the centralization and overreach of other pool operators, which, according to him, has altered Bitcoin to the extent that its security model is at high risk. Dashjr pointed out the custodial nature of current mining pools and their control over who can use Bitcoin, suggesting a need for change.

Oceans latest achievement in mining block number 823,129 is more than just a numerical success. Its a clear indication of the potential and effectiveness of decentralized mining pools in the Bitcoin ecosystem. As the industry continues to evolve, Oceans role and impact will be closely watched, particularly in the context of decentralizing mining and maintaining the integrity of the blockchain network.

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Web3 needs to regress before we can progress in 2024 | Opinion – crypto.news

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news editorial.

On the surface, things now seem very different from a year ago, with Bitcoin (BTC) being more than double the $16,000-17,000 and the total market cap of crypto being comfortably above a trillion dollars.

While the prices do indeed reflect some form of recovery partly fuelled by speculation around the approval of Bitcoin ETFs, we havent progressed enough as an industry, as most of the barriers to crypto adoption still remain unresolved.

It may have been a grueling crypto winter, and the resurgence of bull-posting on X (former Twitter) is a welcome contrast, but the industry needs to regress and slow down to make meaningful progress in 2024. Otherwise, it will basically be going through a repeat of the previous market cycle, albeit with a few improvements or differences.

The industry is still nascent and only slightly over a decade old, and there are still solid use cases lacking as a resultbut this youth will not last forever, and neither should the status quo.

The fast-paced nature of the industry can be exhilarating and impressive at times, as a lot can change in the span of a day or week, like most technology-based industries. However, this can be a double-edged sword as it inclines us to focus on the new rather than the old and be stuck in an echo chamber of sorts.

While it may be counterintuitive, the industry needs to force itself to slow down instead of always looking to go faster. It also needs to look at what has been done outside of web3 that has already been tried, tested, and, more importantly, resilient and prosperous.

Sure, Metaverse-focused utilities such as NFTs, web3 gaming, and SocialFi may be refreshing ideas. Still, they are much too foreign to mainstream users to be effective pull factors for mainstream adoption. Such utilities serve as excellent, unique niches for the industry, generating curiosity and interestbut should not be misconstrued as drivers for mainstream adoption, at least not for the near future.

The reality is that blockchain technology is already complex enough as it is to understand for new users, and this hasnt changed much. Adding relatively foreign ideas to the mix as a focal point only exacerbates this further.

This is where battle-tested and more tangible utilities such as established payment systems and real-world assets (RWAs) come in as a more viable foundation for adoptionmost mainstream users already understand how most of these function, and the grounded nature of these utilities are much more appealing and suitable for institutional and mass adoption as compared to newer and riskier verticals. Unsurprisingly, the data and metrics also back this up; the total value locked (TVL) for RWAs is currently sitting at $5.7 billion in TVL, with projections for growth up to $10 trillion.

Estimated tokenization market sizing | Source: 21.co

As for payment systems, we are also seeing established legacy players such as Visa and Mastercard making moves to support crypto usage in 2023, and this trend will only continue to gain momentum in the coming year.

Accessibility has always been a problem hindering adoption for web3 and crypto, so having more convenient on and off-ramps for crypto will undoubtedly be necessary for user acquisition and retention. Coupled with regulatory compliance, these utilities will be the real backbone and foundation for adoption as they are stable and reliable enough to withstand the test of time.

While speculation undeniably fuels the web3 space, this creates a level of volatility and instability that intimidates and deters new entrantsthe web3 industry cannot rely on this if it is to scale beyond being treated simply as a decentralized casino.

Features such as memecoin trading also do not add much legitimacy to the industry for mainstream users to take web3 seriously, and this all needs to change.

As the industry matures, tokenomics, trendy narratives, and buzzwords will take a backseat to sustainable business models in 2024, as projects without actual value creation and revenue generation continue to be weeded out by increasingly discerning users. Weve already gotten important lessons from FTX, Luna, USTC, and most recently SafeMoon on the importance of decentralization, self-custody, and proper due diligence.

The crypto space does tend to have goldfish memory, and most users are happy as long as they are making money and forget about existing concernsbut this approach needs to change as ponzinomic projects do not bring any meaningful positives to the industry and do not last forever.

Frauds like FTX may have grown to a colossal size and lasted for a long time on empty promises and lies, but eventually collapsed and damaged the industrys credibility tremendously.

Conversely, projects like Pudgy Penguins and their move to introduce a real-world toy collection, in addition to typical NFT utilities, have done relatively well through the bear market, unlike most NFT projects. This isnt a mere coincidence and highlights the importance of having sustainable business models.

In 2024, we will see more and more positive examples as projects deliver on their product roadmap and drive actual utility triumph over competitors with empty promises and hype-based marketing. Both builders and users need to be practical and patient instead of hunting for moonshots or simply looking to make a quick buck to build and support projects with proper revenue sources.

Aside from projects requiring sustainable business models, another core issue is that web3 infrastructure cannot currently maximize the industrys full potential due to its nascency. As an example, decentralized exchanges (DEXes) provide an essential foundation for decentralized finance, which is a core vertical of web3but trading volume and liquidity for the top DEXes are still bested by the leading centralized exchanges due to the familiarity of the user experience, better slippage, depth of liquidity, and more.

While decentralization maximalists might not like the notion, many mainstream users are much too comfortable with custodial services to jump straight into self-custodyresulting in many centralized services acting as a bridge of sorts into web3.

We already see such a trend slowly growing, with Coinbase providing a gateway for its users into the Ethereum ecosystem with its L2 Base, Binance providing its users with an entry point into defi with its recently launched web3 wallet, and even Telegram-focused custodial wallet TON Space.

More and more of such web2.5 products and services, which are built on a hybrid mix of the decentralization from web3 and battle-tested efficiency from web2, will drive critical use cases and larger-scale adoption for the crypto industry.

The security aspect of the infrastructure also needs to be improved, as the web3 industry is still rife with scams and exploitswith $290 million being lost from just five hacks in November alone and legacy wallet providers like Ledger falling victim to an exploit which put many users at risk in December.

It is still far too early for decentralization alone to be the means to an end, as the web3 industry still requires more time to mature. User education also has a pivotal role, along with product UI and UX improvements. As it stands, decentralization and its autonomy should be an end state that the web3 industry strives to make accessible, safe, and easy to use even for mainstream users.

While this has not yet been achieved, the progression through regression for web3 in 2024 should be celebrated, as it will undoubtedly bring the industry closer to making significant breakthroughs and mainstream adoption possible.

Veronica Wong

Veronica Wong is the CEO and co-founder of SafePal, the comprehensive decentralized crypto wallet suite with over 10 million users across hardware, mobile, and browser extension wallet solutions. With a decade of experience in Fortune 500 companies like Tencent, Veronica took the leap of faith from Big Tech and e-commerce into web3 to set up SafePaland has been committed to solving security, UI, and UX issues for crypto users, in addition to cross-chain interoperability for 100+ blockchains (EVM and non-EVM) for the past five years.

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Web3 needs to regress before we can progress in 2024 | Opinion - crypto.news