Episode 8 – My So-Called Decentralized Life
“My alarm. That must be my alarm. It’s 5am and I’m awake. FML. Birdsong. Why are they up so early? What have they got to do that’s so pressing and why do they have to make so much [beep] noise. I reach for my phone to… wait. There’s something about today. There’s something I have to do today. Oh no… today is d-day. Decentralized day. Which means. I can’t touch my phone, mustn’t touch my phone. Or can I touch my phone? I don’t even know. Damn birds, wait are birds decentralized? Am I allowed to listen to them? Or is there a central authority that governs birds that can be shut down at any moment. Actually, that might not be such a bad thing. I’m typing this on a… wait… this computer… is it decentralized? I’m connected to the internet, maybe I shouldn’t be, do I know who my ISP is? Birds. So many birds. Why won’t they shut up? And where do I even start?
If you think too long about decentralization it can start to overwhelm you the same way it can if you try to follow a new diet plan or trying to live a completely carbon neutral lifestyle. And it’s not as simple as just flicking a switch. Decentralization is a sliding scale and there are many nuances to its application. In 2021 the world is a long way from being ready to go fully decentralized but we can learn a great deal from trying. And that’s the purpose of today’s film. To see just how feasible it is, right now, to live a completely decentralized life. So, if the question of how on earth we could possibly live without centralized services is one that keeps you up at night, then you’ve come to the right place because this is School of Block, demystifying decentralization one block at a time and today it’s time for a Decentralization De-Tox. I’m ready. Are you?
So let’s start with this. A mobile phone. The gateway drug to all the connected entertainment that streams through our daily lives. If you’ve ever done a digital detox you’ll realise just how embedded these devices have become. But going decentralized doesn’t mean ditching your phone. It means saying no to giving your data and your identity to centralized organisations. It might surprise you to learn that there are already crypto friendly phones out there like the Samsung S10 which featured a blockchain wallet or the HTC Exodus which not only featured a wallet but allows users to run a full Bitcoin node by storing the full ledger on a 400gb SD card. One of those will run you about 50 euros these days. But given the chain is growing in size all the time you’re probably going to need a new card within 18 months or so. There’s also a handsome phone from Sirin Labs called the Finney which runs on its own SirinOS, a modified version of Android and all transactions are powered by its native token SRN. The phone features its own cold wallet and promises to allow you to use decentralized applications as easily as the centralized versions you’re accustomed to. But you can go even further here by building your own BOB. You heard me… BOB.
Bob stands for Block on Block and its makers are calling it the world’s first true blockchain phone enabling you to take full control of your data and privacy. Let’s take a closer look.
You see there’s a long history of niche hardware electronics failing to gain traction. Hardware is well… hard, the upfront costs alone are usually enough to sink a company before it even gets off the ground. I highly recommend watching the documentary on General Magic to understand why this happens. And this is why nearly all of the blockchain innovation we see currently is purely at the software level.
Taking a moment to think while writing this film you realise just how much of what we do relies on electricity. And how much we depend on a reliable supply of juice to power… everything. But can we decentralize energy? Well, as it happens. Yes. I live in the Netherlands and here the government has pledged to quintuple renewable power generation by 2030. Thanks to recent developments in renewable energy technologies such as batteries, heat pumps and solar panels, it is now possible to produce, convert and store energy locally. And what’s emerging here is a promising new concept has emerged in which energy flows can be balanced at the distribution system level in microgrids. The European Union is actively looking to help facilitate the creation of local energy communities bringing citizens together in local energy cooperatives. To the extent that it’s estimated almost half of all EU households will be producing renewable energy by 2050,, of which more than a third is participating in a local energy community.The most familiar example of this would be installing solar panels but beyond this we’re starting to see the creation of peer-to-peer energy trading platforms, powered by blockchain, like this one from Bax & Company. If you live in the town of Eemnes which is about 35 km from Amsterdam then you can already buy and sell energy peer to peer. It’s an early pilot but it’s a sign of where the renewable energy mission is headed, at least in this modestly sized european country.
So, when I’m thinking about how I get to work, where my energy comes from, yes there are options. It’s early but if you drive a Tesla you could fuel that Tesla with sustainable, carbon neutral energy from a decentralized energy network.
Entertainment & Social
Facebook generated $86 billion of revenue in 2020 ($29 billion net), up from $71 billion in 2019 ($18 billion net), and $56 billion ($22 billion) in 2018 (Facebook)
Facebook was estimated to have won 23.5% of US digital ad revenue over 2020 (eMarketer)
And what of the services we use, like Facebook, Whatsapp, Youtube? Can we decentralize those? Should we decentralize those? We already know Facebook has been spying on us and selling on our data. That famous saying: if you’re not paying for the product, you are the product has never been truer than now. For entertainment you can turn to Theta or dLive for livestreams, or Lbry for a decentralized version of YouTube. There are alternatives to Twitter and Facebook like Diaspora and Bitclout and you can support musicians with fairer streaming models through a platform like Audius. The godfather of the internet Tim Berners Lee is also building a new platform called Solid that allows users to ringfence their data and the access to that data in pods.
The problem with all of these platforms is…
We’ve grown so accustomed to just having whatever we want whenever we want that the motivation to move to a different platform, even in the face of overwhelming evidence that the organisations running the apps we use are not our friends, we still don’t want to change. Bringing us back to the age old question facing any technology startup: does it scale?
The truth is, these legacy platforms just aren’t ready to be disrupted yet. But there is one that is and it’s happening faster and faster. Yes. Money.
Money and Payments
Payments was the first big usecase for Bitcoin and the transfer of value between individuals remains its most successful. There are Bitcoin ATMs dotted around the world, many stores accept Bitcoin and you can even buy a Tesla with it now. And we’re witnessing the birth of a open, fully decentralized financial system with DeFi that will allow anyone around the world to the same privileged financial services as everyone else no matter who they are, no matter where they are. There are crypto debit cards allowing you to pay for goods and services with your crypto. I have one right here from Crypto.com. Now normally Crypto.com has to sell cryptocurrencies to cover its obligations to Visa in cash. The payments giant also recently announced a pilot program allowing banks “to allow their customers to buy and sell digital assets such as bitcoin as an investment within their existing consumer experiences”. So, let’s give it a go!
VO as I walk off: So I’m being dramatic here but it does illustrate the point that there’s still a ton of friction in payments both on the crypto side and on the banking side and there’s one thing that banks do that we’re going to have to get used to doing ourselves. Custody.
A phrase you might hear when learning about blockchain is ‘be your own bank’. And this means self-custodying your assets. Instead of giving your money to a bank to keep safe that obligation is all your own. Which means you’re in control but that also means you are also entirely responsible for what happens to your private keys, how you store your passwords and how you manage your assets. If something goes wrong there’s no customer service helpline on the Ethereum blockchain to help you out. So, it’s vitally important to create a failsafe mechanism for yourself, whether by storing private keys in a vault, using VPNs, storing assets on hardware wallets or even in the soft tissue between your ears. But we’ll cover that in more detail in a future video because it’s one piece of this puzzle that you definitely don’t want to get wrong.
But we’re going to end this film but doing something pretty sobering. If we take a look back at the success stories of the dotcom era there’s one company that stands head and shoulders above all the others. Not Google, not Facebook, not Alibaba but Amazon. Forget the shopping and distribution network, Amazon’s greatest party trick is AWS, the cloud-computing infrastructure that powers a mind-boggling share of the internet we use every day. Amazon is of course highly centralized so obviously blockchain is the answer. But the reality is this – .blockchains are secured by nodes running protocol software. The vast majority of those nodes are running on… yep, you guessed it. AWS. So we’re going to do an experiment. We’re going to run the internet without AWS.”