Crypto and Blockchain Could Be the Internet’s Fifth Protocol
While the internet only started out as a military research project in the 1960s, it has since become the single largest computer network in the world, disseminating information, news, and entertainment at an unprecedented scale. Although skeptics called the internet a fad a mere 20 years ago, several governments, banks, and businesses would be crippled without it today.
Dissecting the internet
Although the internet has become relatively ubiquitous in the past few decades, not much about it has changed. For the most part, the technology has matured in terms of accessibility and quality but hasn’t seen any fundamental shifts in ideology. Nevertheless, that began to change in 2009 when the creator of bitcoin, Satoshi Nakamoto, introduced the world to the idea of decentralized wealth and value.
Cryptocurrencies represent a natural extension of the internet and could revolutionize not only the aspects of trade and commerce but also be able to guarantee data ownership and digital democracies. To understand how a digital currency can do that, observers first need to take a step back and understand how the internet works today.
Two popular models explain the construction of mainstream computer networks. The first is the Open Systems Interconnection (OSI) model that was created by the International Organization for Standardization (ISO) in the 1980s. It was an attempt to standardize the creation of new communication systems and provided a framework for how different “layers” in a network would each be responsible for the transmission of data. The OSI model consists of seven layers.
While the OSI model has been somewhat influential in the design of communication networks, it is not used to describe how the internet works as it is rather abstract. In its place, we have the TCP/IP model, also known as the “internet protocol suite.” In this context, TCP refers to the Transmission Control Protocol, while IP stands for Internet Protocol. The model consists of four layers, which are much more nuanced and easy to segregate.
Data on the internet is continuously transmitted through each layer in the form of packets. The “Link Layer” allows these packets to go from the client computer to a networking device, like a router. Common examples of links include Ethernet and WiFi. This allows packets to progress to the next stage, namely the “Network Layer.”
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This layer allows packets to be delivered to their destination safely. Regarding the internet, it is frequently referred to plainly as the “Internet Layer” instead. The Link and Network Layers quite clearly work in cohesion to deliver packets but have no bearing over how each works.
The “Transport Layer” makes sure that packets are reliably sent from the host to the destination. In the case of a TCP-based networking system, it will also ensure that packets are sent sequentially, in order, and guarantee their delivery. On the other hand, a system that continually transmits unimportant data will use the User Datagram Protocol (UDP) instead, which will still send data to the Network/Internet Layer, but not require guaranteed delivery.
Finally, we have the “Application Layer,” which is responsible for handing off databases, spreadsheets, movies and other files to the Transport Layer. The layer consists of a few standardized protocols, which are selected by the application depending on the use-case. Websites, for example, use the Hypertext Transfer Protocol (HTTP), while email transmission uses the Simple Mail Transfer Protocol (SMTP).
These four layers essentially make up the backbone of the entire internet and have been sufficient for decades. However, with the rampant rise of security breaches, phishing attacks, and general spam on the internet, perhaps it is time for a fifth layer, one that can autonomously and independently guarantee security and identity.
The Cryptocurrency Revolution
Cryptocurrencies, such as bitcoin, are built on top of blockchain technology and have been designed to be trustless, neutral, and global entities. While they were initially only an alternative to central bank-issued fiat currencies, they have since evolved to become a system of value in and of themselves. This means that digital tokens can now be used for a myriad of purposes, such as weeding out voter fraud and paying content creators instead of advertisements.
If the same principles were to be ported over to the entire internet instead, it is possible that a number of its problems would disappear for good. Network resources are precious as servers and clients only have so much storage and bandwidth they can afford. Malicious actors easily abuse this with no ramifications whatsoever. Such attacks are disappointingly common and can result in considerable losses to users of the internet.
By bringing the exchange of “value” to the internet, computers can communicate with each other to establish legitimacy. Some parts of the Transport Layer, for instance, can require a cryptocurrency-based transaction at each hop to make sure that the packets are from a reliable source and aren’t needlessly consuming network resources.
“Suppose we had a QuickCoin, which cleared transactions nearly instantly, anonymously, and for infinitesimal mining fees. It could use the Bitcoin blockchain for security or for easy trading in and out. SMTP would demand QuickCoin to weed out spam. Routers would exchange QuickCoin to shut down DDoS attacks. Tor Gateways would demand Quickcoin to anonymously route traffic. Machines would bypass centralized DNS and OAuth servers, using Coins to establish ownership.”
Ravikant also argued that the use of digital currencies for resources in other precious networks. A fast and cheap cryptocurrency could be used for negotiating right of way in a grid of driverless cars or allow a group of pedestrians to take priority over a traffic light. Decentralized consensus of this form can be achieved without a trusted third-party presiding over the entire process.
Decentralized platforms will also allow the internet to develop censorship resistance and guarantee freedom of speech. The current iteration of the internet is monopolized by a few large companies that each have their agenda and can skew user sentiment for private gain.
Steemit, for example, leverages its crypto-based foundation to guarantee that every user has a voice and is even rewarded for it. The platform is nearly immune to public scandals, as it is entirely open source and user-driven. A handful of other crypto iterations exist, some legitimate and many others far from solving the internet’s greatest worries. In either case, a founding in how the world wide web operates should point commentators and investors alike towards a better understanding of the digital world’s fifth protocol.