Wikileaks’ Lesson: Decentralize!

If there is one thing we should learn from what is happening to WikiLeaks, it is that large and centralized services cannot be trusted to stand up to political pressure. Whether it be cloud servers, mainstream payment systems or something as simple as a pointer to your domain that suddenly Just doesn’t work any more, we need better alternatives. Just as WikiLeaks was forced to diversify and retreat, so could a number of other websites. Perhaps they are less high profile today but who can guarantee that tomorrow the won’t come to someone’s attention and find themselves a target.

Are we going to learn that lesson? That’s the question Glyn Moody asks in “Lessons from WikiLeaks: decentralize, decentralize, decentralize”

One idea the article promotes is to make hosting blind. The program is called “unhosted” and it puts a layer of encryption between the provider of hosting space and the creator of a website (a blog for example) as well as the users who fill the site with pages, posts, comments and so on.

“We need to break the one-to-one link between the software publisher who writes a web site (e.g. Google, Inc) and the ‘hostage provider’ who hosts that web site (e.g. also Google, Inc). If we create a simple grease layer in the form of an open standard between the hosted software and the servers that host it, then this is decoupled.”

“As a first step, I’m working on a prototype that I hope to launch in time for Christmas, so that web devs can play with it over the holidays. A web site’s code will need to be very Ajaxy first, so that all the servers do is store and serve json data. No server-side processing. Next, we need to switch from transport-layer encryption to client-side payload encryption, because we no longer necessarily trust the server we’re talking to. Then we need a bit of code-signing, to know we can trust everything that is running in our browser, and we’re done. The user will have the same experience (except for a one-off plug-in-prompt), but the web site is unhosted in the sense that the servers you talk to only see encrypted data and don’t even know which application you are running.”

The article also touches upon search, where google dominates today. There is an upstart p2p search engine called YaCy that is available for programmers and administrators to incorporate into their sites. It is missing a large user-base to be really effective, but then that is the problem with all software in the p2p area, the catch-22. It isn’t very useful unless it has many users and it can’t get many users unless it’s useful… Time to lend a hand here.

The payment solution which is mentioned – Bitcoin – is an interesting development. It basically allows generation of coins by using your computer’s computing muscle. Generating coins is a slow affair, and it is destined to get more and more difficult with time. According to the Bitcoin FAQ:

“New coins are generated by a network node each time it finds the solution to a certain mathematical problem (i.e. creates a new block), which is difficult to perform and can demonstrate a proof of work. The reward for solving a block is automatically adjusted so that in the first 4 years of the Bitcoin network, 10,500,000 coins will be created. The amount is halved each 4 years, so it will be 5,250,000 in years 4-8, 2,625,000 in years 8-12 and so on. Thus the total number of coins will approach 21,000,000 over time.”

Unfortunately the developer of bitcoin has set a maximum of bitcoins to ever be created, which will make this currency highly deflationary. The more users that will want to use bitcoin, the more they will have to compete for the use of a limited amount of coins. Coins will become worth more and more, meaning less bitcoins will buy more product. Those who will profit from this deflation are going to be the “first come” users, those who created bitcoins when it was still relatively easy.

I believe bitcoin is an interesting proof-of-principle for a user-generated currency, yet it is not a currency that can guarantee price stability. Because of the fixed total amount of coins to be created, the currency cannot be adapted to a growing market.

In any case, there’s more in the article. Here’s the link again:

“Lessons from WikiLeaks: decentralize, decentralize, decentralize”

5 Comments Wikileaks’ Lesson: Decentralize!

  1. Pingback: Lesenswerte Artikel 14. Januar 2011

  2. AvatarCreighto

    That 21 million coin limit will not be hit until roughly the year 2113. Yet, the system is designed to be deflationary over the long term. That will not prevent it’s widespread use, as a ‘coin’ as it is known today can be divided and spent seperately to eight decimal places. Assuming that we would still want two points of precision, that leaves 21,000,000,000,000 to trade with in the future, half of which will exist by 2013. It could be a problem, but if it is, it will not happen until my grandchildren die of old age. If I live to see the singularity, I will be impressed if we are still using Bitcoin in 2113 and havn’t replaced it with something even more advanced.

  3. AvatarSepp Hasslberger

    Who would want to constantly change prices just because the money we use gets relatively more scarce each year?

    Let’s say we now have a thousand users of bitcoin (just an arbitrary figure – I don’t know how many there actually are) so bitcoin’s extant coins serve a thousand users. Up that to a million users. What does it do to your prices, if you sell in bitcoin denomination? Then again up that to a hundred million users. There are tremendous changes in the value of each coin.

    That may be good for those having produced the first coins, they can now buy a luxury mansion for what ten years ago just bought a good meal, but it is hell on a market place. A currency – even one as smart as bitcoin – should allow reasonable price stability.

    Of course you can sub-divide the coin Creighto, but why should we have to?

  4. AvatarCreighto

    “That may be good for those having produced the first coins, they can now buy a luxury mansion for what ten years ago just bought a good meal, but it is hell on a market place. A currency – even one as smart as bitcoin – should allow reasonable price stability.”

    Bitcoin will be inflating the monetary base at about 6.25% APR around January of 2013, and continuing to fall at a very predictable rate. It’s not fluctuations that are hell on an economy, but unpredictability. The values of fiat currencies around the world float compared to one another constantly, and no harm is done. I expect the value of a bitcoin to rise considerablely over the next year or two, but that is due to expectations of a growing user base. Once the ‘bitcoin economy’ begins to level off, something that I would expect before 2013, the fluctuations of the relative value of a bitcoin will settle down.

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