October 17, 2024
Everything Old is New Again
Highlights
- Old technologies can be great targets for DePin projects. Storage protocols have demonstrated this in the past.
- While other DePin projects have struggled (like Helium), this has largely been a demand issue, while the networks have been built out very successfully.
- Multicasting and Radio waves are now an overlooked technology whose potential demand has shifted meaningfully.
- These can be repurposed into an alternative data transfer protocol that is beneficial to Content Distribution Networks.
DePin
Blockchain networks are good at a few things, but perhaps most important was the unlocking of trustless coordination. In the earlier days, people got excited about the variety of things this could unlock. The most exciting ideas back then were those that tied together resources into networks that would be difficult - maybe impossible - to coordinate otherwise.
Perhaps the most successful from back then is Filecoin, whose premise was extremely ambitious, and has later spawned an entire vertical of important variations on the idea of using latent storage. At their core, many of these make old things new again - repurposing them into something relevant for today’s day and age. Old/overlooked technologies are often the best candidates for this because of 3 key points:
- Distribution - As an older technology, they are typically well distributed through society;
- Costs - They are likely to be very cheap to produce or use;
- Compatibility - Newer technologies have laid the groundwork to use it in a different, relevant way.
In the case of Decentralized Storage Protocols, we had a bunch of isolated underutilized storage capacity, now it is cloud storage. The coordination layer of the internet and blockchains can repurpose all these isolated storage into a product deemed valuable by the market.
Lately, this broader category has been called Decentralized Physical Infrastructure Networks or DePIN for short. The category has had a bad experience in a lot of ways, with many criticizing the way in which these networks are bootstrapped with incentives far greater than actual revenues - leading to unsustainability. It is a question as old as crypto about whether these forms of bootstrapping make sense.
Helium’s first product is likely one of the highest-profile examples of this. Whilst they managed to create a robust network of IoT nodes, they failed to find the demand side for the network, ultimately leading to hundreds of millions in incentive payouts with almost zero revenue on the other side. They have since moved towards a more proven market in cellular 5G networks, and I am optimistic to see how the mobile carrier plan unfolds.
Early modern civilization was a lot like a giant DePin project. Societal coordination facilitated the tying together of all the latent (physical) human potential in a given area towards the common goal of increased overall prosperity and stability. Prior to this, coordination was functionally much smaller - effectively familial units. Eventually, this broader coordination led to the world you and I know today. The foundational element here was tying together something incredibly core to human life at the time - the physical potential of a given human being and unlocking new use cases.
First DePin Network Circa 15,000 B.C.
Shifting focus back towards the modern age, the best candidates for these types of networks to have impactful changes on society are those which are extremely foundational to things we do in daily life - electricity, data transmission, monetary coordination.
So what other opportunities exist in technologies that are currently overlooked, but could be repurposed for how the world has shifted since their introduction?
Whilst we have been seeing more attention on the electrical side, with teams like React Network attempting to tackle distributed energy grids, we have also seen this numerous times in the past with projects like Energy Web and Grid+. At the same time, alternative data transmission is an interesting area of focus currently overlooked.
Sending and receiving signals happens via many mediums – either physical like fibre or wireless like 5G. Historically, most data transmission was happening wirelessly through radiowaves, broadcasting top-down content for Radio and TV to billions of households around the world. With the availability of more performant solutions like 5G and fibre and the launch of the interactive web, most of the load, following the demands of the market, has shifted towards bidirectional mediums as bespoke online experiences drive.
Once regarded as a public good, as fundamental as the right to self-expression, the internet has left multicasting (and radio waves) in the past, with limited content and fading usage. However, they offer capacity for data transmission that is currently underutilized. Herein lies an opportunity to make something new again.
Can we find a way to leverage this latent resource (more efficient data transmission throughput) into something useful in the context of today’s more modern solutions (unicasting and cable and fibre)?
Blockcast
Blockcast is seeking to build a DePin network of broadcasters that can distribute content (data) using multicasting through a variety of mediums.
Why do we even need this kind of data transmission if we have more performant solutions? Global data usage is a truly up-only chart. This is also not expected to decrease. Users increasingly are putting out bigger data needs as we move towards more 4k video content and beyond. And whilst fibre and 5G are extremely performant, they too have limitations. At a certain point, we will end up maxing out these as well.
A better way to imagine this is to think about the topology of all the data that needs to be transmitted in a given timeframe – it is a giant traffic jam. Sorting these traffic jams out is more or less what Content Distribution Networks (CDNs) do all day. Some cars need to get there instantaneously, but when you take a look at the individual needs of all the participants, we might find that some of them are okay taking a bus/mass transit (they all need the same content).
I guess this meme is real
Blockcast is trying to build that mass transit system. Scaling the Internet. A complimentary tool for grid balancing the data transmission needs of content providers and consumers. The best tangible example of this working would be a big Netflix release of the next season of Love is Blind or some other hyped-up show.
If there is a huge spike in demand at the same time (release time, or a live sporting event, etc) prices for delivering that content can surge because the delivery pipes are under strain. There are basically two ways to lower this cost (both in terms of the nominal amount of data and the $ cost) - Leveraging timing or finding ways to reduce the usage of the pipes. Today, all of the internet is more or less unicasting. Unicasting is basically data transfer that is addressed to a single address. This one-to-one server and client delivery model means each user requesting media must get their own copy, regardless if someone else nearby is too.
The solution here is actually something that was tried in the very earliest days of the internet - Multicasting. As you might guess, multicasting is a form of transmission where you can address an entire group instead of a single address. This was originally a core part of the internet, and Mbone (multicast backbone) in the 1990s was the only method to be able to stream movies and concerts to huge numbers of fans. This early form of internet broadcasting was discontinued due to concerns about tracking and, thus, difficulty with billing.
Scaling internet traffic today is a permissioned feat that is at the mercy of 6 major CDNs. The internet’s infrastructure and value accrual on it is increasingly centralized. Large traffic generators can’t foot the bill to bring fibre everywhere, and neither can the ISPs whose margins are thinned as they are reduced to “dumb pipes.” Instead, Blockcast creates a permissionless network to scale internet traffic and breathe life into the underutilized broadcast capabilities in networks today. By getting a network of relay node operators (regular internet users) to participate in a hybrid over-the-air and lightweight VPN network, that can pass multicast traffic along using traditional rails to users if its not enabled at their ISP or available wirelessly. Broadcaster (cast) nodes transmit multicast traffic via unused frequencies, and the peer-run relay network to serve users directly or from a nearby node to lessen the load on traditional core and last-mile access networks.
As mentioned previously, an additional example would be delivering Pay Per View (PPV) content via Blockcast. For big live events like UFC or Boxing, or other major sporting events, much of it is now distributed digitally via fibre, but huge simultaneous loads like these can clog the system pretty quickly. Delivering this same content via Blockcast can result in huge cost savings for the CDNs and free up capacity on fibre/broadband.
Blockcast is fundamentally the kind of distribution system where you can deliver the same set of data to a really high number of devices cheaply. This is what the PPV example above was alluding to. When the data desired is uniformly and synchronously needed, Blockcast is likely to be the optimal solution.
Node runners are incentivized to keep broadcasting and earn tokens for doing so, while the protocol earns fiat from its contracts with content providers, which could be used to buy and burn network tokens and create a self-sustaining system.
Conclusion
Despite challenges in the past, DePin has demonstrated why, as an abstract idea, it can quickly build out powerful networks. The demand side has been tough, but this is something that good execution and useful products solve in a meaningful way. Leveraging the unique characteristics of crypto to repurpose old ideas into new use cases and new behaviours is something we love to get behind.