From Elaine's Idle Mind, October 14:
I wonder if Al Gore ever looks down at us peons, crawling around the internet like eight-legged leeches:
I invented that. I took the initiative in creating the Internet. Now all these freeloaders are using MY internet protocol to drive billions of dollars worth of value. For FREE.
Damn, I should have done an ICO.
Even though Al Gore neglected to tokenize his internet protocol*, someone else came along with the next-best thing.
In 1999, a clever company called Enron invented something called a bandwidth contract.
The internet is just a bunch of routers and cables, sending and receiving data all day long. Most internet providers have peering agreements,
where they carry each other’s traffic for free. Sharing is mutually
beneficial, and their customers pay a fixed monthly rate regardless of
use.
That’s all well and good when capacity is plentiful, but what happens
if half the country wants to stream Sunday Night Football while I’m
trying to sync my Bitcoin node? Whose data gets to go first?
Enron’s bandwidth contracts were designed to solve this potential
queueing problem. By forcing internet users to bid for bandwidth by the
minute, the free market would decide the optimal allocation of resources
[1].
Sadly, Enron imploded before it could fully realize its bandwidth
trading dream. Still, the idea of turning every network into a market
was pretty hot in the dot-com days [2]. To see how things might have
turned out, we can look at a company called Mojo Nation.
A MASSIVE AMOUNT OF STORAGE SITS UNUSED IN DATA CENTERS AND HARD DRIVES AROUND THE WORLD. Let your hard drive shit out money by fulfilling storage requests on the open market!
Such is the marketing pitch of services like Filecoin, Sia, Storj,
MaidSafe, and all those other decentralized file storage tokens.
Seventeen years ago, their founders were still in diapers when Mojo
Nation launched to address the problem of Pareto-inefficient data
storage.
Mojo Nation created a digital payment system to buy and sell computational resources. Participants could earn Mojo tokens
by contributing things like disk space, bandwidth, CPU cycles. Those
who wanted resources offered bids in outgoing requests. Mojo tokens
relied on a centralized mint because blockchains weren’t around yet, but
centralization was the least of its problems: Tokens were a huge distraction from what users really wanted to do, which was share files [3].
A bidding market is an awfully complicated thing. Take Bitcoin, for
instance. Each block has a finite capacity, so participants submit
transaction fees to incentivize miners to include their transactions....MORE
