This week in crypto. July 5 - 11: Decentralize the Internet, NFT sales and more...
Decentralize the Internet
The Internet started as a dream of a world wide web, where information is accessible to everyone, and everyone has a voice. Over time, however, it became increasingly clear that the Internet is a centralized space, where a handful of companies yield a colossal power over the world. The key elements of the Internet, such as domains, data distribution, data storage and user identity all have their unique points of failure linked to their centralization: any bug, or hack, or censorship directed at them can have serious consequences. The answer to that? Decentralization of course.
Domains
The Domain Name System, or DNS, is the backbone of the Internet that translates domain names into IP addresses, and its 13 root servers are manager by 12 organizations (9 of which are American). Imagine these organizations fail – and the Internet comes crumbling down. Or on a smaller scale a website owner gets locked out of their site.
Decentralized solution lies with the projects like Unstoppable Domains that allow to buy and sell blockchain-registered domains.
How the data is transferred
Last month a massive Internet outage affected thousands of websites around the world, bringing down the websites of the UK government, Amazon, The New York Times… and many more. The reason was a bug in the server configuration of Fastly – a service that mirrors the websites of its clients in geographically disparate locations. Such service allows website visitors from different parts of the globe to surf without lags, while avoiding crashes due to increased traffic. Fastly and alike are responsible for a huge share of the world Internet traffic, and they are too subjects to all centralized entities’ flaws.
Decentralized solution may come from the projects like DataHop, aiming at creating user-operated content distribution network, or Deeper that seek to move information transfer points to distributed ledgers, building Decentralized Private Networks (DPNs).
How the data is stored
Amazon Web Services (AWS), Google Cloud and Microsoft Azure account for 61% of the world cloud services –this fact alone should sound the alarm. The consequences of a compromised datacenter could be catastrophic, whether it’s due to a bug, a hack or a natural disaster. We at D.Center already had a taste of what that could be like (the fire at OVH Strasbourg datacenter sent us down for many days), but of course it could be much worse.
Possible solutions may lie with the projects like Filecoin – a decentralized storage network powered by the blockchain.
User Digital Identity
Nowadays we rarely own our digital identities: our login credentials are tied to an email address operated by a centralized company, the all-mighty social media can delete your account in a split second if the censors don’t share your opinion… There’s always someone who has the power to lock you out of what you consider your own.
Luckily the blockchain can fix this with Decentralized Identity (DID) concept and the projects like ION that aim at creating an independent identity tool where a user is the only one to own their credentials. It could be used, among other things, to login into websites or even to store your social media data on a separate cloud, meaning that if Facebook or others decide to delete your account, you’ll still be owning your content.
There are many facets to the Internet, and they all become increasingly centralized, i.e. more vulnerable to attacks, one company bugs, censorships… you name it. Decentralized Internet, also called the Web3, develops fast, but it is still in its beginnings, and the general public has most certainly never heard of it yet.
Well, now YOU do, and you know that there’s hope for an independent Internet where users own what’s theirs 😊
Art and NFT
We all saw it coming: this week an NFT of a CryptoPunk landed in Miami’s Institute of Contemporary Art, definitely inscribing NFTs and crypto culture in the history of art. One of the first NFT collectibles, CryptoPunks is a limited collection of 10’000 unique pixelated characters, some of which are being sold for over $1M.
Collectibles like CryptoPunks together with sports-themed NFTs like those from NBA Top Shot series represent the majority of NFT trades in the first half of the year, art coming in the third place. However, with the incredible diversification of NFTs into media, gaming, music and other sectors, the situation can shift. And it already does: according to DappRadar, the biggest volume of NFT trades per collection for this period is generated by Axies – unique characters of a play-to-win game Axie Infinity (we spoke about it in one of our past newsletters).
Overall there has been an impressive $2.5 billion in NFT tokens sales in the first six months of this year.
Markets
Bitcoin
Bitcoin traded sideways this week and ended at the same level it started, i.e. around $34k.
While the price consolidates, the most common topic now is whether Bitcoin will resume its bullish trend in the second half of the 2021. Many analysts believe so, backing their forecasts by on-chain analysis like Puell Multiple or traditional financial charts indicating that the price might have reached a local bottom. Bears of course say the opposite.
The data that we at D.Center concentrate on is crypto adoption, and the latest data from Glassnode indicating over 50’000 new entities coming on-chain every day is a good news.
Ethereum
Nothing extraordinary happened to the Ethereum price neither this week, and it continues to consolidate around $2150.
Ethers continue to be drained from the exchanges, reaching the lowest point in 2021 (19.8 M ETH). Such outflow is usually a bullish sign, meaning that users pull out their ETH to store, use in the DeFi or stake in ETH 2.0 – the parallel Ethereum chain with PoS consensus, to which the main Ethereum will be switched later.
The effective balance of ETH2.0 indeed continues to grow, reaching 6.11 M ETH.
Quote of the week
“Bitcoin is the most amazing mathematical miracle”,
Steve Wozniak, Apple cofounder