Tokens are always presented alongside speculative decentralized tech. How can we understand tokens if we don't get the product?
Let's talk about tokenizing a protocol you know: BitTorrent
Getting tokenization right could create an efficient market for content.
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So, we’ve tokenized BitTorrent behind the scenes. Now what? If we can convert the tokens to fiat, we have a profit motive to seed! We might see: 1. Strategic seeders speeding up downloads for all 2. Better long term file retention 3. Bounty markets for desired content


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Private torrent tracker users pay for servers (“seed boxes”) w/ fast upload speeds to improve their ratio Tokens for seeding would bring seed boxes to public trackers with the same goal of being first seeder on popular torrents. First seeder on GoT? Fast server? Easy money!
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In the early days of file sharing, members of "The Scene" raced to copy new music from one FTP server to another to improve their ratio. With a tokenized profit incentive to seed, people would race to mirror content to public trackers. Good for decentralization and redundancy
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If racing to seed new torrents in order to earn tokens is the equivalent of Wall Street’s high frequency trading, what is long term value investing? Look for content that is unpopular enough that no one else might be seeding in a year, but popular enough someone WILL want it!
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File storage is cheap Amazon Glacier charges $0.004/GB per month. Storing a standard def movie for 10 years would cost $0.336 Want to long term value invest by seeding in the tokenized BitTorrent market? Find unpopular files someone will want where it is worth storing for years
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In financial markets… • News is quickly priced into stocks • Firms buy undervalued stocks • Investors arbitrage between markets Tokenizing BitTorrent is similar: • Popular downloads becomes faster • Hoaders find undervalued content • Seeders arbitrage between trackers
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Imagine if you could place a bounty on a certain file you want. > I'll pay 1,000 TRNT for a leak of the new Star Wars Private torrent trackers have success with this using upload credit. A decentralized token bounty would take this to another level. Huge incentive to share!
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Private trackers enforce centralized upload ratios. Tokenized BitTorrent decentralizes and improves on this: • Tokens are portable between trackers • Token rates can be negotiated based on demand. Private trackers manually adjust requirements when current ratio is too hard
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Tokenizing BitTorrent introduces global and decentralized upload ratio-like incentives even if you can’t cash out to fiat Even without a profit motive, global upload incentive means you can benefit everywhere and you don’t lose big if OiNK or http://what.cd is shut down
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Fitting network payments to user incentives is hard! By using a token instead of ETH/BTC, the protocol designer can experiment in early phases and decentralize proportional to risk tolerance. A BitTorrent token fork is reasonable, BTC not. Big reason to consider tokens IMO
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Building decentralized protocols is hard. Historically, file sharing businesses are hard to profit from. I think the fat protocol paradigm is a strong argument for tokenizing BitTorrent, specifically. Launching a protocol isn’t just tech. Network effects require marketing.
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As mentioned, using a token instead of BTC lets you hedge risk while experimenting by keeping the possibility of a fork open You can also use a token to incrementally experiment w/ incentives. Start with a closed network token you can’t cash out then support fiat exchange later
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PayPal scaled past network effects by giving $5 to every invited user. Decentralization liberates, right? Tokens provide a low cost alternative that let you try things like tokenizing BitTorrent and overcoming network effects without $100M in VC funding
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Yeah, you can fork a tokenized protocol and add Ethereum or Bitcoin. Who is footing the marketing bill for bootstrapping your hostile yet philanthropic fork? It’s not about greed driving protocols, it just doesn’t cost $0 to get users.
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I intentionally didn’t cover a few topics: • Scaling blockchains • Decentralized identity and Sybil resistance • Fraud resistance These are what crypto companies will spend years building. I just wanted to share the vision for tokens I think others might be missing
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Is you enjoyed this thread, I also have a blog post on tokenizing BitTorrent.
The post goes into more detail while this thread clarifies and expands on some things I didn’t cover in the post.
Thanks for reading!https://medium.com/@jbackus/what-if-bittorrent-had-a-token-13d62a590aa7 …Show this thread
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