The Transaction Costs of Tokenizing Everything
elaineou.com
elaineou.com
> As it turns out, bandwidth — and most computational resources — are simply too cheap to meter.
This is patently false, as bandwidth and all other computational resources are metered on a huge scale today, by centralized cloud computing and ISP companies.
It's even false for BitTorrent. The article describes BitTorrent with
> After Mojo Nation’s demise, a former employee stripped the token incentives out of the protocol and created a simple tit-for-tat filesharing system.
However, most serious BitTorrent users are active on trackers which require a certain seed:leech ratio, thereby metering the user's contribution. The fact that no money is involved has more to do with the fact that most of them are used to share files in violation of copyright, not because of some intrinsic law of computational resources being "too cheap to meter".
It also references some hare-brained scheme cooked up by Enron shortly before their collapse to claim that bandwidth cannot be traded, and makes the false assertion that all peering and internet transit today is free.
It's funny, but I happened to have a conversation with Bram Cohen about this very topic. He thought seed:leech ratios were a dumb idea, creating an artificial scarcity where none was needed. You can't save bandwidth for later.
And I write this comment from my home Sonic gigabit fiber connection, for which I'm paying exactly the same price as I paid for my ADSL connection. My bandwidth is unmetered. Other home ISPs like Comcast do meter. But is that because they need to? Or just because it's a convenient way to figure out which of their customers are willing to pay more?
The idea is to get users to seed, rather than just leach and then shut off their client. Where does saving bandwidth come into the picture?
But this isn't actually the most usrful result! In this model distributing 100MB of GoT is as valuable as distributing 100MB of some file with only 2 or 3 seeders. But those Megs are not equivalent if the objective is to maximize availability of files.
Being the seeder of last resort on a rarely (but still downloaded!) file is way more valuable than being the 100k'th seeder on some new TV show.
This isn't necessarily what the GP was getting at but is a good example of seed ratios not having the best incentives.
A couple examples:
"Required ratio" based on percentage of "snatched" (i.e. downloaded) torrents you are seeded. For example, if you're seeding all torrents you have ever downloaded, your required can be 0 (instead of initially common values of 1 or 0.9).
Ratioless: no ratio requirements, but you must instead seed all torrents for a specified time.
Among people involved in private torrent communities it's fairly well-known that a purely ratio-based system does not provide the best incitements (which would be a library of content that is as diverse and well-seeded as possible).
Anyway, the main reason many prefer private trackers to public is not only because of enforcement of contributing back, but because of rules that ensure that the available content has high quality (i.e. curation).
1. You get one point for seeding a torrent per hour, up to 10 total. You can exchange 1,000 pts for 10GB of upload credit (e.g. improves your ratio). The torrents don't need to actually be downloaded by anyone to count. This seems to work well as torrents that are weeks and weeks old still have seeds.
2. Popular torrents are listed as 'FREE', which means that downloads don't count against your ratio, but upload is still counted. So anything that gets swarmed gets lots of activity.
This in turns means that these other people don't increase their ratios and end up in the same situation. You have an artificial 0-sum game for absolutely no good reason. Then you need freeleech periods or bonuses to make up for the ratio credit "deflation".
I think it would make more sense to punish people who never seed (seeding if nobody is downloading is fine, you can't do anything about it) and incite people to seed torrents with a low seed count.
Private trackers are often topical, either focusing on movies, video games, music, ebooks etc... So if you want an invite to these you just need to hang out with people who share these interests and then ask around. IRC is a good place to start in my experience.
Some semi-private trackers also have periods where registration is open to all.
Otherwise, you have to get an invite by an existing user; if you don't know any, I think the best bet is to lurk forums and IRC channels and beg for one. I never actually went that route, though.
Most private trackers requires an invite (from someone who is already a member and has invite privileges) though.
People that brought you on were supposedly responsible for any problem you caused..
So I am wondering are you reading this as a critique of bitcoin and cryptocurrency or the so-called "storage" tokens?
Without quantifying - "most serious", this is an actual straw man:
> However, most serious BitTorrent users are active on trackers which require a certain seed:leech ratio, thereby metering the user's contribution.
The point is majority of the BitTorrent works like that, it doesn't matter if there is a minority of "serious BitTorrent users" which require certain seed:leech ratio.
That's like going up to Eisenhower after he proposed the interstate system and saying, "Wait, the cost of paving over that much land and building that many overpasses might largely offset any gains of this supposed more efficient transportation network."
All new technologies introduce costs, but ideally they also act as multipliers that bring far more benefits.
The multiplier effect might not be enough, but then again, it might be. You're not really saying anything.
Better to talk about under what circumstances the benefits-multiplier might not be enough to make up for the costs. For example, someone elsewhere in the thread said that yes, if humans were bidding on such tokenization, it might create too many barriers. But look at all the ad networks we've built where billions of tiny auctions happen instantaneously -- that's all by machines. So if the system is built for machines, the multiplier effect could be potentially huge.
While there may be problems with the original article I think that you are far wider of the mark than the author. Several times in your comment you have taken the behavior and practices of large-scale participants and tried to extrapolate these down to the small-scale players who make up the bulk of the users in these various systems. This is the sort of mistaken assumption that just earned someone a Nobel prize in economics ( * ) and it is probably one of the problems we had when building Mojo Nation. There are some things that are metered in bulk but which make no sense to do so at the smaller scale at which the consumer encounters them, and the nature and scale of these bulk goods can change quite quickly.
When we started work on Mojo Nation many were still on dial-up and even those with broadband connections had large asymmetry between the upstream and downstream bandwidth; trying to take advantage of this asymmetry was the genesis of our peer-swarming idea and what we had hoped would distinguish us from systems like Napster that had problems with large media files (aka pirated movies) when you were no longer in a college LAN environment. When you are considering something like bandwidth or local storage capacity from the perspective of cloud computing providers or ISPs then it is most certainly a resource that has a cost and which is closely metered, but for individual users their point in time bandwidth is effectively unmetered. No one is checking their current monthly usage statement before firing up Netflix, nor are they worried too much about the storage costs of holding on to a download for another few days so that they can improve their seed:leech ratio.
For most Americans water is effectively too cheap to meter. Electricity and fuel for heating are close to this level. Yes, before you point it out I am talking about the fat middle of the usage graph and not the extremes of either usage at one end or poverty at the other; for the vast majority there is very little thought given to cost when deciding to turn on a light or to take a shower. At various points in time people have had to pay close attention to their bandwidth usage or local storage capacity, but currently most people can ignore usage for daily tasks even when considering mobile bandwidth.
Clay Shirky was quite correct in pointing out that the transaction cost, both in clearing the transaction within the system as well as the mental cost to the user in just needing to think about the cost, was going to be a problem for us. There were a whole host of other issues related to general complexity of the system, too many knobs for users to tweak and/or use to game the system, and our desire to build a persistent storage system rather than an ephemeral file sharing tool, but this transaction cost was a non-trivial problem that we put off for too long. In the end the closest we came to trying to eliminate the mental burden and lower systemic clearing costs was to use Paris Metro pricing (e.g. you paid to move to the front of the queue, but if you were willing to wait for your bits the cost was 0.) This model has obvious problems when dealing with persistent storage that we were never able to work around, but it is easy to see the leap from this system to the tit-for-tat that Bram eventually landed on for handling ephemeral file sharing.
While it is possible to look at seed:leech ratios on major trackers as metering, this is a generous definition of the role of these ratios and they are much closer the the reputation-backed personal promises/tokens that Mojo Nation started with than to any actual currency. The goal of such ratio systems is incentive engineering, not strict accounting.
And to end this on a minor diversion that ties directly to your offhand dismissal of Enron in all this, I will point out that at one point Enron’s bandwidth trading group had enough interest in Mojo Nation to fly me out to Houston several times for meetings. A plush corporate palace with a pimped out Harley-Davidson in the upper-floor lobby of a group supposedly trading bandwidth should have been a sign of their upcoming fall, but at the time I was young and easily impressed…
( * ) Yes, I know that the economics prize is not, strictly speaking, a Nobel prize...
I've never heard of that, and whilst i've only been on the Paris metro twice, i didn't think that was how it worked. What is the origin of this term?
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I am a but naive with crypto coins for every use. Maybe I am stuck up on my love for P2P but cannot understand why we need the complexity and the ever increasing cost of blockchain to allocate disk resources. I believe the combination of ICO craze with the hype of crypto as a gambling for this generation created a golden hammer.
Whether or not we need a cryptotoken for that is debatable, but I don't know of any other alternative that would keep the system entirely decentralized.
What value is there in decentralized hosting across lots of commodity nodes of your private encrypted data? As opposed to ”centralized" hosting with a few different providers.
Whether you will end up with a small number of megahosters or a more p2p like topology seems like a question for the market to decide.
Considering the hardware cost, it's probably obvious why everyone just pays a 3rd party.
If both AgentME and I install Resilio and act as bittorrent nodes, I still have no incentive download his encrypted backups onto my harddrives.
A company like Mercedes-Benz[1] and its affiliate dealers can use Resilio to synchronize and get/share the latest car software. They all want those software files. In contrast, I do not want AgentME's (potentially multi-terabyte) encrypted backups.
But when I search Filecoin's website for "revenue" and "profit", I only see references to the participants in the system, and not the token holders.
https://www.google.ca/search?q=site%3Afilecoin.io+revenue
https://www.google.ca/search?q=site%3Afilecoin.io+profit
I did a quick search of the top 5 tokens on https://coinmarketcap.com/tokens/ and I'm not immediately finding any clear statements on how profit is made and distributed.
A question for people who are better informed, is there any kind of list or tracking on tokens payouts? Something like this (https://arxiv.org/abs/1703.03779# ), but for non-ponzis?
The best analogy is if Chuck-E-Cheese pre-sold their tokens before they built their franchise location, and then people started Forex trading in anticipation of using their tokens in the future arcade. Chuck-E-Cheese uses the sale to finance the building of said franchise. Of course, this is if everything worked correctly and the owners didn't bounce to Spain with all your money, leaving you with some useless tokens.
[erc20]: https://theethereum.wiki/w/index.php/ERC20_Token_Standard
Tether is a token tied to fiat currency
NEO Gas is used for compute time in their smart contracts. NEO also has a currency that is used to mine gas. It can be a little confusing, but one of them is a token and one is a coin. This is different than Ethereum, where the currency is also the token used to pay for compute time.
I can dig deeper and give examples of how some of the other tokens work, but unfortunately I'm not super familiar with the other tokens in the top 5.
And, yes, ICOs can be tied to some number of shares in a company. In these cases, the token is redeemable for a share of the company.
Are you aware of any tokens that don't rely on some kind of managing external organization's voluntary continued support? Or at least anything run like an ETF, where someone can deliver a basket of assets and get them tokenized? Or the inverse?
Here's a list of fees associated with the token: http://docs.neo.org/en-us/sc/systemfees.html
and the comments. Sorry I am not sure how to pull the comments to my post in the link.
Sure ICOs are platform for raising money but only in the riskiest sense. In some cases people are paying only for the R&D to be done by "core" team on some unproven but maybe tenable idea.
As for the profit mechanism, most of the cryptocurrency rely on finite and deflationary nature of coins to provide value. If say filecoin is proven to be valuable, finite nature ensures the price increases in short term all the while block rewards (coins given to miners) tapers off to ensure the coins are always limited.
IIRC there was some discussion about "tokens that do something" versus "tokens that may do something eventually" potentially being different with regards to SEC regulation, but I'm spacing on the details.
Maybe private trackers would be a good use case for blockchain storage tokens. Certainly the hypothetical seeding ratio I could have on a certain private tracker for art film would be actually valuable to me.
To me, the brightest possible future of money is generosity combined with raw dimensional analysis, as in people having education about how to count physical resources and a willingness to work together and share in creating more abundant lives for themselves and others.
To the extent that tokens help do that, cool. But if they just become another tax/rent pyramid then to put it frankly, fuck that i don't want it.
Disappointed!