For anyone remotely interested in internet history, BitTorrent, and cryptocurrency, I recommend reading this great 4-part essay by Simon Morris, BitTorrent’s former Chief Strategy Officer:
Part 1 – https://medium.com/@simonhmorris/why-bittorrent-mattered-bittorrent-lessons-for-crypto-1-of-4-fa3c6fcef488
Part 2 – https://medium.com/@simonhmorris/if-youre-not-breaking-rules-you-re-doing-it-wrong-bittorrent-lessons-for-crypto-2-of-4-72c68227fe69
Part 3 – https://medium.com/@simonhmorris/intent-complexity-and-the-governance-paradox-bittorrent-lessons-for-crypto-3-of-4-1d14ac390f3f
Part 4 – https://medium.com/@simonhmorris/decentralized-disruption-who-dares-wins-bittorrent-lessons-for-crypto-4-of-4-f022e8641c1a
Here are some of my favorite highlights in the series:
- The general purpose public blockchains out there might best be understood as platforms for rule-breaking apps.
- coordination is hard and costly especially with many paranoid participants whose interests are not necessarily obvious to you — in the world of Bittorrent this meant that changes to different parts of the Bittorrent protocol to introduce obvious win:win optimizations or attack mitigations took many months and sometimes were shelved completely.
- While the Bittorrent ecosystem was decentralized and extremely hard to censor, BitTorrent Inc — one of the few participants with real potential influence — was highly visible and felt exposed to legal repercussions of any of its actions
- But in practice the only way to make any large-scale governance viable is to re-centralize power in a smaller number of deciders with some number of rules around how you can become and remain a decider
- And this is the main conclusion — decentralization may be great for disruption, but if the experience of Bittorrent is anything to go by it is not at all clear that it has a role in whatever comes next. Blockchain architectures are great for unleashing unstoppable rule-breaking mobs, but we shouldn’t mistake the rule-breakers for the winners.
- Bittorrent could have been eradicated by state intervention, but most states chose a lighter touch approach. The same is mostly true so far for crypto-currencies, but the scope is so much greater and time will tell at what point a state actor will feel compelled to intervene
- 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.