Can Decentralized, Blockchain-Based Internet Become a Reality?

With the Internet becoming a modern-day necessity, there's a growing push to free it from the control of regulatory authorities and monopolistic tech giants. Many netizens are becoming wary of the corporations that can track or sell their most sensitive private data.

These challenges have opened the doors for a new concept—a decentralized version of the Internet, based on open-source blockchain networks. Several projects are seeking to replace key elements of online infrastructure with distributed, peer-to-peer systems, that do not rely on a single intermediary or point of failure. This article looks at some of the potential offerings and the hurdles they are likely to face.

Key Takeaways

  • Traditional Internet infrastructure relies on centralized services, which can sometimes compromise user data and privacy.
  • A number of new projects are trying to establish a decentralized, blockchain-based Internet alternative that replaces centralized intermediaries with peer-to-peer service providers.
  • These projects face several hurdles, such as attracting enough users and service providers to make the network competitive with traditional services.

Decentralized Market Definition

Problems with the Centralized Internet

The Internet is constantly under surveillance, and user data is regularly tracked and collated by corporations, application developers, and governments. A blockchain-based alternative can address this problem by replacing Internet giants with a decentralized, peer-to-peer network of providers.

In such an alternative, members of the community would own and operate the infrastructure used for storage and computing. This would take away control from government or corporate bodies, and ensure net neutrality.

This form of the Internet is also hoped to ensure data security. On existing Internet platforms, user data and applications are typically hosted on central servers, allowing companies to create detailed profiles of their users. This data has been used to manipulate populations and election results, for example, during Facebook's Cambridge Analytica scandal.

Decentralized Internet Projects

There are several projects seeking to replace key Internet services with blockchain-based alternatives. For example, Filecoin is seeking to replace centralized cloud storage providers with a decentralized file storage network, allowing users to rent out their unused hard drive space in exchange for cryptocurrency. The files are encrypted, thereby protecting data while allowing users to rent external storage.

Another startup, called Blockstack, is seeking to create a new layer for the traditional Internet that can facilitate decentralized applications. Instead of exchanging text, images, and files through a centralized intermediary, users would be able to share data through locally-run apps and retain control over their data. "Through their platform design," according to a profile of the business in CoinDesk, "applications developers can't access user data, users can choose who stores their data, and permission rights to read or write to the data are decided by the user."

Other startups, such as Andrena, are seeking to replace centralized routing networks with peer-to-peer mesh networks. Such a decentralized Internet could also come with significant cost advantages, although this would be subject to market forces. Instead of relying on Internet Service Providers, anyone with an Internet connection would be able to provide basic cloud services.

Issues with Blockchain Internet

Though the concept of a blockchain-based Internet may seem feasible, there are several obvious challenges. As with other blockchain projects, one of the biggest hurdles will be attracting a critical mass of users so that the platform can benefit from network effects.

Second, misuse due to anonymity is a major issue in the blockchain world, which includes using cryptocurrencies for unlawful purposes like selling illegal drugs or weapons. Given that data privacy is a major goal of the decentralized Internet, it is unclear how—or if—such a system would prevent users from engaging in illegal activity.

Finally, blockchain networks rely on network participants to run the software that keeps the system running. If the monetary rewards for participation are not attractive enough to incentivize these contributions, participants may stop contributing their computational resources. A fine balance will be needed to make the decentralized blockchain-based Internet viable.

The Bottom Line

While the concept of a decentralized blockchain-based Internet is gaining traction, a realistic implementation will require a pragmatic and balanced approach within the whole ecosystem. Even from the most optimistic perspective, there are many hurdles to be solved before such a system could be accessible to the majority of Internet users. The concept is still evolving, and it may have a long and uncertain road to success.

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