The internet is about to enter a new phase where enthroned rulers will be dethroned, more power will be regained from individuals, and value will move as freely as cat GIFs.
To understand why we need a better internet in the first place, ask yourself this question: isn’t it strange that the internet isn’t good for money? Think about it. The applications we use every day to search, communicate, or even shop; The companies that dominate the web are very poor with money even if they are very good at it. There is a separate checkout process that involves repeatedly entering all of your information. Cards issued in some countries will not work on local websites in other countries. Sometimes you wait forever watching the tiny wheel spin for the transaction to fail.
Camila Russo is the founder of The Defiant, a content platform with a focus on decentralized finance, and the author of “The Infinite Machine” about the history of Ethereum. She was previously a reporter for Bloomberg News covering markets in Buenos Aires, Madrid and New York. She is a speaker at CoinDesks Invest: Ethereum Economy Event starting October 14th.
Connected: Will a Sharded Ethereum be flexible enough for decentralized finance?
More complex transactions are almost unthinkable. Influencers and creators should be able to monetize their likes, retweets, and views by streaming micropayments from followers without a platform making a cut. Lesser-known mortals should get paid if they choose to display ads or consent to their information being shared. Transferring ownership of valuable assets from art to real estate shouldn’t require multiple intermediaries and loads of paperwork.
There is the Internet’s TCP / IP protocol. Apps build on this. And separately there is the financial system, which relies largely on the infrastructure that was built before the invention of the Internet. SWIFT, IBAN, the rails that handle most international money transfers were not designed to handle real money. These are messaging systems where transfers can take up to five days and cost around $ 50. National money transfers do a little better, but the US still takes at least one working day to process (money appears to be dormant on weekends).
The story goes on
Attempts to update these systems – SEPA in Europe, the US’s faster payments initiatives, VisaNet for card payments – have created a chaotic patchwork that does not solve the core problem. Fintechs are trying to improve the situation but are building on the same old carcass.
At a time when we have global, cheap and fast communication, we should have an equally global, cheap and fast financial system.
My kingdom for your data
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The second big problem with the internet today is that we access it through a handful of “walled garden” companies. Kingdoms are a better analogy. You need a passport to enter. Once in feel free, but the price to be paid is for the king to watch your every step, collect your information, and then sell it to fill his coffers. You don’t get a cut, but you do get the incredible services that the web offers today.
These kingdoms – Google, Facebook, Amazon, Apple – don’t always know exactly what they are collecting. We also don’t know what our data is used for. Is it purely market research or is it used to influence the US presidential election, for example?
See also: Camila Russo – Five years later, Ethereum is really the “Minecraft of crypto-financing”.
Nor is anyone free to build in these areas. Developers must adhere to certain guidelines and go through an approval process that can take days. They need to know that rules can change without warning and that their app submission can be rejected. Live apps are also not off the hook because they can be blocked directly.
As with any for-profit business, the goal of the platforms is to extract as much value as possible from as many users as possible. They are encouraged to stomp or buy up anything that comes close to their influence and stifle innovation and competition in the most dynamic industry. The result? We get products and services that are probably not as good as they should be.
An internet of value
The internet is ruled by innovation-inhibiting monopolies that have kept us from having an internet of value. Organizations built on the current Internet network have almost no choice but to become for-profit companies whose code is proprietary and closed to the public. If the network itself is designed to transfer value, different business models can emerge.
At this new frontier, users remain in control of their money and personal information. You move freely without bowing to a king. Value – that is, money, assets, securities, property – is just as typical of internet apps as it is of cat videos. And it’s already happening.
This is not about “crypto”. It’s not about the next bitcoin or getting into the next hot token that pumps.
There is no question that the Internet of Value is rocking traditional finance and the current web for the simple reason that it is so many times better.
This is about a shift in the foundation of the web.
There is a layer of money added on top. A distributed network that conveys value without relying on banks, settlement and clearing houses. Money moves faster, cheaper, and globally – just like the rest of the internet.
And this network is not only good at conveying value. It can also process anything a computer can, so developers can build applications on it. The difference from the internet apps we are used to is that the value in these apps is not an afterthought. it’s at the core. The name of this new base layer for value is Ethereum.
Payments can be seamless, and that’s just the beginning. More complex financial services are now available to anyone with access to the network. Users can exchange tokens with just a few taps of the finger. Since the value can be programmed, this can range from the network’s native token ethers to synthetic representations of gold to Tesla stocks. It can even mark San Francisco’s “Poop Index,” which is where people can benefit from the city’s increasing number of poop sightings.
Venezuelans can buy tokens that are tied to the value of the dollar. And not only that, you can put them in loan logs and earn interest on those tokens. Speculators can borrow from these asset pools to trade. Others can have a computer program automatically execute a trading strategy, such as a steroid robo-advisor. There is a lossless lottery in which salaries are streamed almost to the second and limited T-shirts, which are delivered in their physical version and can also be worn in virtual reality worlds, are offered and traded as tokens.
For developers, financial applications are the low hanging fruit of a value network, but it’s just the beginning.
An open protocol
A key feature of this network and the applications that build on it is that the code is available for anyone to review, track, and grooved. This means that builders can settle anywhere without fear of unpredictable rulers. The base layer itself, the Ethereum blockchain, belongs to a community of millions that cannot unilaterally change rules or individuals, prohibit or censor apps.
The fact that the code is open makes it difficult for companies to build monopolies. Now, if users don’t like the rules, they have a choice to use the open code and make a copy of the application.
The ability of these open organizations to have their own token – a share-like digital coin – makes open source business models sustainable.
See also: Camila Russo – Sale of the Century: The Inside Story of Ethereum Premiere in 2014
It enables developers and entrepreneurs to develop high quality products and services outside the confines of traditional for-profit companies. The user and creator of the protocol own the native token, which gives them the owner of the protocol and rights to participate in governance. As the protocol gains traction and usage increases, token holders will benefit. This enables a world where the platforms we use don’t compete with their integrations, but work with them. It’s a way to change the paradigm from zero sum to win-win.
It’s all still very experimental. It’s risky and it breaks often. Funding requests for Ethereum currently stand at $ 11 billion, a tiny amount compared to global financial market standards. But it is not nothing, and it is growing and becoming safer and more resilient every day.
Ethereum itself, where much of this activity takes place, is only five years old. Maybe it’s the Ethereum platform that is bringing this new internet to the masses, or maybe it’s a different network like this one.
But there is no question that the Internet of Value is shaking up traditional finance and the current web for the simple reason that it is so many times better. Because of this, young, shaggy developers who work from their laptops and gather at hackathons around the world have kicked the old board and started over.