Is Blockchain-Driven Bandwidth the New Super Currency?

financedude85's picture

It may not be talked about as much anymore but bandwidth continues to be a prime commodity that powers the internet. The rise of cloud computing may have created the notion that scaling up capacity is easy whenever an app or service demands more. However, the ability to scale up doesn’t mean that computing resources are limitless.

Resource and hosting providers may also claim that they can provide “unmetered” and “unlimited” services but the fine print would actually say otherwise. These service packages still have limits. It’s not like one can subscribe to a $5-a-month hosting package and run YouTube on it. Bandwidth also comes with a price.

Being finite and useful makes bandwidth valuable. The idea of bandwidth being “currency” has been floated around even a decade ago, back when peer-to-peer and streaming video were only emerging. Demand for bandwidth was rising and the global infrastructure was far from the size and complexity that it has today.

The challenge then was to make the economics work. However, it’s only recently that such a concept could effectively be explored thanks to the emergence of the blockchain. Now that new blockchain platforms allow just about anything of value to be tokenized and traded like bitcoin, blockchain-driven bandwidth could just become the new super currency.

Decentralized computing resources

Decentralized computing resource provision through blockchain is now gaining traction. Blockchain can be used to effectively pool together computing resources and make these available to other users.

Sia, and Filecoin, for instance, provide a decentralized file storage solution, by “renting” hard disk space to create a “decentralized Dropbox”. Golem allows users around the globe to rent their CPU processing power to other users seeking to enhance their computational capabilities, thus creating a worldwide supercomputer for hire.

Aside from hard disk storage and computing resources, there’s bandwidth.

Gladius.io provides a platform for users to rent out spare and underutilized bandwidth to be used for content delivery and distributed denial-of-service (DDoS) mitigation to create a “decentralized Cloudflare”. The company’s vision is to use bandwidth to build a marketplace which lets people all across the world buy and sell bandwidth to help safeguard (DDoS protection) and accelerate participate in a global CDN) websites. Distribution also eliminates the single point of failure, which in this case equals to better protection. When centralized SaaS solutions are being used a cyber attack on a resource provider could disrupt operations of all services that depend on it.

All these services allow users to tap distributed resources in order to better the internet and make it cheaper and more effective. Unlike traditional cloud storage where files and data can essentially be accessed by providers, a decentralized approach encrypts files and information and distributes data across the network. Only the owner could gain access to the information.

Clearly, among the advantages of a decentralized approach to resources are cost and security.

Lastly, decentralized resources are often cheaper since the cost of running the infrastructure is distributed among peers.

Tokenizing through blockchain

Other ventures are already attempting to tokenize a variety of real-world assets. Blockchain ventures are tokenizing real estate, gold, and even art in order for these to be traded faster and easier than traditional means.

As tokens, even fractional ownership will be possible thus lowering the barriers to ownership and access. While token and cryptocurrency trading has yet to mature, blockchain’s ability to tokenize just about anything creates exciting opportunities on how trading digital commodities.

Blockchain tokens can now be created to represent bandwidth and other resources. These tokens can then be traded for other services within the platform or even for other cryptocurrencies and fiat currencies through exchanges.

Blockchain transactions are fast and transparent. As such, there is potential for the creation of a fair marketplace where prices of computing resources are actually determined by supply and demand rather than be dictated by the dominant players.

In addition, the rise of bitcoin is proof that the market could already place value on virtual currency. What more if the currency represents something that has inherent value in computing such as bandwidth?

Rising demand

There is an ever-rising demand for such computing resources. Developments in other domains such as big data, analytics, machine learning, and the Internet-of-Things (IoT) push greater demand for bandwidth, storage, and processing time.

According to Gartner, adoption of cloud computing and security is expected to grow year-on-year for 2017. Public cloud services market is expected to grow by 18 percent. Spending on cybersecurity is also estimated to rise 7 percent.

In cybersecurity, for example, companies are struggling to keep pace putting up defenses against rampant cyberattacks. Due to the abundance of compromised devices that are hijacked to create botnets, DDoS attacks can be executed by malicious actors easily. Downtime caused by such attacks are costly and devastating so more organizations seek to adopt security solutions. However, the cost of such services remains prohibitive, especially for smaller businesses.

Security providers leverage their access to bandwidth and computing resources for their services. In turn, their top service tiers also command premium pricing. A blockchain-driven service like Gladius.io uses decentralized resources thus enabling packages to be customized and priced more accessibly.

A super currency?

So how could blockchain-driven bandwidth become a “super currency”? First, is the utility of bandwidth. The internet relies on bandwidth to function and this makes bandwidth inherently valuable. Second, there is an increasing demand for bandwidth and computing resources. Scarcity drives up prices of commodities. Lastly, blockchain can tokenize bandwidth making it tradable for other services or other stores of value. These make it quite the promising asset especially in a world that is shifting most of its activities to the online and digital space.

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jago's picture

forget btc prices..

soon both bandwidth and the brangelina genome will be avail on the dark web

using the Bchain. thats where this is going.

. . . _ _ _ . . .'s picture

How much bandwidth is used to update everybody's ledger when a one dollar (equivalent) transaction is made? What is the cost of that update?

Surely there will be those who speculate on this difference. The author simply found a way to monetize that.

Is this not giving the utility companies ultimate control over the crypto-space? 'Move to a place with hydro-power' seems to be a good idea. (lol at Quebec overtaking Alberta in energy resources.)

So how is a market de-centralized when it depends upon a centralized power structure? How will a place like Vanuatu compete with the likes of Quebec, Ontario, or Iceland that all get their energy almost for free?

Cabreado's picture

That's no way to run a Currency.

And those who don't get it (or don't care) -- you're part of the greater problem... much greater...

missilefish's picture

All these conceptual ICO's are horse shit. Every single ICO talks about changing the world, but none of them actually have an implemenation plan. All ideas, no actual solution. So you tokenize the internet? And everyone runs a wallet to automatically do what? And everyone is going to run that wallet and version on every platform for......paid internet access? 

At least ETH has contract code, that is innovative and works. That truly is badass to know that you can write a function that is on the bloackchain and referenced by any distributed application knowing the code has not been altered or hacked. Small critical functions have a place in that environment, like voting or accouting functions.  

Dun_Dulind's picture

The moment the World goes full blockchain, we're done when the next Carrington Event hits.

We've been lucky to avoid similar events over the decades, but a significant portion of the World's networks still run over copper.

DarthVader101's picture

Just think of BTC as MySpace, Yahoo, Infoseek, etc., back in their glory days. Eventually, the Google, Facebook, Twitter, Instagram, etc., of the "blockchain ledger" and "cryptocurrency" technology world will emerge and BTC will be nothing more than a footnote in history. That day will come much sooner than we may want to believe.

gdpetti's picture

Funny article.... I don't suppose this guy has any interest in the matter, right? Does anyone with a brain seriouslly think this whole project isn't NWO intended? Who do you think is testing this platform to begin with? It's so crazy to think this is some free and independent project with good wishes for the masses.... get real, most people won't even survive the crap to come.... this is central bank type delusions... enjoy the insanity while it lasts.

King of Ruperts Land's picture

This is a story about telecom. Buying and selling telecom via e-money does not make bandwidth money. It does level the paying field and allow new things to happen that could inch in on traditional telco. I can see the rise of "free" cell phone service with no telco subscription. Just put up a fixed service point on your old TV tower and presto free service. Your service point would join the network and the "service" it provides would earn enough credits for your own mobile network accesses plus some coins to bank.

A peer to peer network standard protocol would eliminate the traditional telco monopoly or multopoly). e-mony being used in the protocol to make it market "fair".

users - would pay
user / operators - break even
service operators - make revenue

Global Douche's picture

The question has been posed in a different matter on these humble Fight Club forums before; that of HFT'ing. I'll continue reading through it to see what matches the parallels, otherwise this will be a Huge "Meh!" at least for me.

Synoia's picture

Complete bullshit. It's not backbone bandwidth which is the bottlenect, but local loop - the last mile, and that's subject to capex limits.

Broadcomm has a chip set which runs at something 500 GBytes/sec with repeaters evey 500 Miles, over installed monomode filbre optic cable.

The constraint here is money for people who do the work - budgets and capex limits on the local loop, replacing copper with fibre optic.

 

King of Ruperts Land's picture

Article is pure BS for too many reasons to mention. Fiber in the last mile is not even required. Just need the right silicon chips at each end of the last mile of copper. Way cheaper than re-stringing and re-digging the last mile.

Silicon chips are are very very cheap, and the coding/modem patents should be expiring soon.

Like you allude to, the fiber is already installed. Technology keeps increasing the capacity of that same fiber.

Bandwidth is finite, yet there is a HUGE amount and demands that push up against that are probably best described as waste and inefficiency rather than utility.

You mention 500GB/s on a single strand of fibre. Interesting, I recall not too long ago the entire backbone capacity of the USA ATT phone network, which would have dwarfed or include the infantile Internet as being 5 or 7 G/s (bytes or bits I do not recall).

Synoia's picture

Copper is limited. Plastic Optical Fiber is the replacement.

 

AT&T are rolling it out.

Downtoolong's picture

 

I’m pretty sure Microsoft, Facebook, Google, Amazon, Quicken, Chase Bank, the NSA, and numerous other orgs already have 24/7 access to my computer, and I never get paid shit for it.

 

 

  

fbazzrea's picture

Lastly, decentralized resources are often cheaper since the cost of running the infrastructure is distributed among peers.

an admission of subsidy requirement. cheaper to whom? the individual, perhaps... but what about to the collective? 

next generation blockchain technologies in energy efficiency, redundancy, security and user interface are required before any chance of crossing Moore's chasm can be accomplished.

meanwhile, early adapters would be wise to reap benefits in prototypical investments before there are no more buyers of obsolescence. 

HRClinton's picture

This article is the most important and useful article to ZH readers with brains and some technical sophistication in some time.

For the rest, it's "Witchcaft! Burn them"!

Best not to engage the latter in a conversation. That would be like mud wrestling with a pig. After a while, you'll notice that the pig is enjoying himself.

tmosley's picture

>but what about to the collective? 

Hahaha, oldbugs turning to communism to save them from competition by cryptos.

fbazzrea's picture

lol concern for the many does not equate to communism. i'm not advocating for forced redistribution. i'm concerned for the mega-energy drain on global resources.

let me get this straight... we now should purchase bandwidth cryptos to facilitate more blockchain apps that require more bandwidth. does anyone else see the folly?

HRClinton's picture

They have the Elmer Gantry writers on ZH, to sell them Golden Hopium. Which they gladly consume.

Alas, TPTB can keep commoditizing PM longer than they can stay solvent.

It is proof positive that any ZH-proclaimed "price surge" in gold or silver is just pure Clickbait, because...

The price of PM keeps skimming 10-15% above the Marginal Production Cost of that PM. This is the dirty little secret that ZH just won't discuss, lest it scare of peeps who are Marks for several ZH advertisers: PM sellers, whose biz model depends on peeps "stacking".

Until TPTB use PM to back currency, PM will continue to be treated as and behave as an expensive commodity.

I've come to that bitter realization some time ago, because Truth is more important to me than Hope. Especially Hope with the price tag of a profit margin from a middleman (PM buyer/seller).

I'd rather use my brain with Price Discovery in areas where that is the goal. E.g. disruptive companies and technologies. Who does not wish they had bought a boat-load of shares of Apple, Microsoft, Amazon or BTC years ago?

PM?  No more than 5% of personal wealth in combo of Unallocated Pool of bullion (Kitco), and a few dozen in the safe at home. Next to a different currency: "specialty brass & Pb".

Perhaps others have come to this realization also.

Jay's picture

"...Clearly, among the advantages of a decentralized approach to resources are cost and security..."

 

A blockchain, especially proof-of-work, is the most expensive and inefficient database structure man has ever devised. That's why one should be sure the data stored absolutely needs all the specialized features of a blockchain i.e. transparency and security. That's why most of the alt-coins are garbage coins. The dumb money has not yet figured out how incredibly inefficient blockchains are compared to a centralized solution.

jimbos world's picture

lookie here: JSE coin (javascript browser based mining - I have cranked up the settings to max and it still only consumes about 15% of my CPU power.)

tmosley's picture

Correct. You use Ft. Knox level security to hide a giant hoard of gold, not your bug collection.

BallAndChained's picture

Putting a piece of NOTHINGNESS like cryptos in a highly secure Fort Knox won't make that piece of NOTHINGNESS any more valuable.

You can quantum encrypt that piece of NOTHINGNESS as secure as you want, but at the end of the day, it is still a piece of NOTHING.

Aireannpure's picture

Why transact in property(BTC) that has a capital gains tax amazes me. 

jimbos world's picture

Spoken like a true and patriotic American... kudos!

disagreeableness's picture

If you use a decentralized exchange, it won't. These are not on the horizon, they're already here. Granted, the big boys are still centralized (Bittrex etc), but fast on their heels is bitshares 'dex'. It never made any sense to me to trade decentralized commodities on a centralized platform. In recent months they've begun instituting new policies about used identification etc in an effort to be in compliance with the wishes of THE MAN. If you want true anonymity, and absolute security, use a decentralized exchange. 

Cutter's picture

Thought provoking article. Blockchain is definitely th future. Blockchain and private cryptos are two different things, though, so the success of one does not necessarily mean the success of the other.

tmosley's picture

You are half way to enlightenment.

Blockchain can't be seperated from (blockchain-based) cryptos. Without the coins, there is no incentive to maintain a network. Trustless public ledgers are an extremely valuable commodity. They simply did not exist before Bitcoin was created.

Cutter's picture

I've never been opposed to blockchain.  Its amazing, transformative technology, and have recognized that since I first started reading up on it five years ago.

Where we differ is in whose hands blockchain currencies will reside: private or government.

As we see with the Russian news today, the future isn't private cryptos, its government cryptos, and government takeover of the currency blockchain.

I know you think government cannot control private crytpos, but I'm afraid they will make a believer out of you.  Wish it weren't so, I agree with a lot of you guys libertarian values, but as Mao said, "sovereignty comes at the point of a gun."  And government has the guns to do what they want.

Russia is first, all the major governments to follow: create their own cryptos/blockchain, ban private cryptos. Enforce the banning with people carrying guns. At that point you comply, or you fight, and you die.

Thems the facts, sorry, and thats the future.

hound dog vigilante's picture

Russia's cryptoRuble or any other gov't. crypto are no different than any other private crypto.

They can't force people to use 'their' crypto, and they can't stop people from using other (private, non-gov) cryptos...

 

You have FAR too much belief in a gov't's ability to ban/control cryptos... the dark web is & will remain LIGHT YEARS ahead of governments technically, i.e. it is literally IMPOSSIBLE for gov'ts to stop/control cryptocurrencies... they can TRY to ban/regulate/etc., but they will fail miserably.  There is exactly zero evidence or rationale for gov'ts ability to stop/regulate cryptos. 

Your belief in the power of gov't is faith-based, not fact-based.  Sorry.

Greenspazm's picture

I wanted to pay a $1000 hotel bill with buttcon. They told me to fuck off. I paid with Visa.

HRClinton's picture

If you were a genuine "PM Believer", you'd have offered to pay the hotel with PM coins.

How many brand name hotel chains take PM?

(Sarc)

Greenspazm's picture

I have never mentioned PMs in any comment about buttcon or craptos.

tmosley's picture

Your bitcoin Visa?

You do know that those are freely available now, right?

I mean, you are actually a well informed person who keeps up with the ever changing and evolving thing that you irrationally hate, right?

disagreeableness's picture

I have a Shift card (visa) and am patiently tapping my toes waiting for TenX to issue their second card sometime in Nov. Nothing is so key to mass adoption as being able to actually spend crypto as easily as fiat. When that happens on a large enough scale, Benjamin Franklin will become as obsolete as lightning fishing with a kite.... along with Auntie Yellen. 

Global Douche's picture

Bonus Points when the Fleezah and BastardCards can be bypassed where TenX itself can stand. I see that possibility, BTW.

BallAndChained's picture

> Clearly, among the advantages of a decentralized approach to resources are cost and security.

That is a Big LIE.

How is there an advantage to cost when it requires Terrawatts of expensive electricity? Contrived wasted work digging a hole and filling it back up again repeatedly. When a simple database is so much cheaper and more efficient.

No advantage to security when the one with the most hashing power control it, the centralized Chinese miners. And the centralized few developers that control it. Distributed is a lie.

Greenspazm's picture

...people once said there was no use or future to TV...

They were damn right.

financedude85's picture

Whether we like to admit it or not, more and more business, innovation, information, and jobs are moving into the online space.

Are gold and silver good investments-yes

Does that mean bandwidth and online investments are irrelevant-no

We can't dismiss the fact that the future is leaning to the digital side, and with it new investment opportunities.

After all, people once said there was no use or future to TV...

HRClinton's picture

You get "follow the money" in a digital world, that just keeps expanding and evolving it's ecosystem. 

Flat Earthers, and 18th and 19th century romantics do not, alas.

(Which is the less polite and more pointed way of saying what you did: Get with the times, or get left behind.)

BallAndChained's picture

Digital yes, but do you pay $6000 to use your TV?

Do you pay $6000 to use the internet?

Do you pay $6000 to use email?

tmosley's picture

You are confusing bitcoin with tokenized services.

The coins representing these other services are very cheap. So cheap, I have a hard time believing such services would work. Siacoin is less than a half a penny right now.

BallAndChained's picture

The alt "coins" are based on the same FREE open source code as Bitcon.

When tmosley bashes alt coins, he bashes Bitcon, Ethereum, and all other cryptos that use FREE open source code.

hound dog vigilante's picture

 

B&C - open source code (free or otherwise) is UTTERLY IRRELEVANT to the bitcoin=money discussion.

Your lack of comprehension of even the simplest/common technologies (code) pretty much unmasks your POV as uninformed/irrational.

tmosley's picture

>The alt "coins" are based on the same FREE open source code as Bitcon.

You are extraordinarily ignorant. Altcoins are completely different from ICO tokens, and not all altcoins are based on bitcoin.

The only question is, are you saying these stupid things KNOWING they are stupid? Seems like your agenda here is to invoke magic to destroy crypto. Not really a great plan, if you ask me.

BallAndChained's picture

You are extraordinarily ignorant tmosley.

Etherium is FREE open source

https://github.com/ethereum/

Bitcon is FREE open source

https://github.com/bitcoin

Monero is FREE open source

https://github.com/monero-project/monero

Litecon is FREE open source

https://github.com/litecoin-project

Ripple is FREE open source

https://github.com/ripple

Repeat with all your scam coins.

 

tmosley you extraordinarily ignorant fool, your cons need to be open source otherwise people don't know what malicious code could be in there and they won't buy the con.

tmosley's picture

You posted a bunch of alt coins, but none of the ICOs I was talking about.

Your mind is gone. Only the reptile brain is left. SAD!

BallAndChained's picture

The only other con you mentioned here was Siacoin which is open source as says on their website and was an ICO according to

https://www.reddit.com/r/siacoin/comments/513e72/a_second_ico/

and can be downloaded for free here

http://sia.tech/apps/

I'm not going to waste all my time searching for all your obscure cons. Waste your own time.

Who cares if the con was funded by ICO or not. That is irrelevant to the point that the most popular cons can easily be recreated.

I already listed the most popular, largest market cap cons that are all downloadable for FREE.

The point stands: There is hardly any barrier to create an UNLIMITED number of cons.

> Your mind is gone. Only the reptile brain is left. SAD!

That must be happening to you, that is why you said it.

When you run out of good arguments, you need to resort to personal insults. For a self-aggrandizing person like you, that is very SAD!

GOSPLAN HERO's picture

It works well in Puerto Rico?

Global Douche's picture

If you're talking about cryptos, you must also include the question of any Credit Cards and other potential digital cash or other transfers of value over digital, such as what the War on Ca$h wants to give the Sheep. When the SHTF, you'll absolutely need at least some fiat cash for such reasons.