Decentralization for legal protection at the expense of UX: • Napster used p2p to avoid central hosting • Kazaa decentralized file search, hurting results and quality control • BitTorrent left search to others (The Pirate Bay). Terrible onboarding but better legal positioning
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Some look at the file sharing movement and say "BitTorrent didn't win, Netflix+Spotify did!" Decentralization exploits legal boundaries, exposing rent seeking in anti-competitive industries. BitTorrent created the conditions that allowed Netflix and Spotify to exist We all won!
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The political framing for decentralization is "censorship resistance." The market framing is "anti-competitive market resistance." P2P file sharing corrected anti-consumer markets for music and movies. Imagine what we can unlock with Bitcoin and Ethereum!
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The chronology of the "most popular file sharing app" is roughly: Napster Limewire Kazaa eDonkey BitTorrent Reflecting "minimum viable decentralization" over time. Limewire was early, Kazaa more usable. BitTorrent's UX was bad, but won legal long gamehttps://medium.com/@jbackus/minimum-viable-decentralization-d813dcf653fc …
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When decentralizing, half measures bite you in the ass:
Aimster obscured searches and user IPs from its protocol
BitTorrent disowned search and left IPs in the clear
Courts argued Aimster's conduct was "willful blindness." BitTorrent's choices made its position strongerpic.twitter.com/wAsLArkhWT
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Boiling down decentralization movements, we build technology to resist governments installing filters:
Copyright (BitTorrent)
Anti-money laundering (Bitcoin)
Content/communication (Tor)
Legal battles and tech evolution continues until its too hard to install a filterShow this thread -
Once legal pushback enters a decentralized product space, evolutionary pressures start filtering: • Weaker willed torrent search engines closed • BitTorrent's protocol evolved • The Pirate Bay doubles down Expect same when the US government takes on real crypto companies!
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Decentralized technologies mixes legal and objectionable streams together: • Can't separate darknet market traffic from anti-censorship on Tor • BitTorrent protocol is unaware of content You can't throw out the bath water without throwing out the baby, by design.
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In a decentralized product market, recklessness buys early growth. Many companies grew by marketing to pirates. I call BitTorrent an "ugly duckling." It didn't seem like a winner until late in the game. Here's how to spot ugly duck investments:https://medium.com/@jbackus/invest-in-the-ugly-duckling-decentralization-product-market-fit-and-the-law-bea856a6bbad …
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What parts of our tech should we decentralize? How do we know when we're done? I think a lot of people in crypto are struggling with these questions. I think history provides an answer. Find your "minimum viable decentralization"https://medium.com/@jbackus/minimum-viable-decentralization-d813dcf653fc …
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This thread focused on decentralization as a legal tactic to be used sparingly, pulling from the history of p2p file sharing. This isn't my only deep dive into p2p history and crypto! Check out my thread on market dynamics, governance, and monetization:https://twitter.com/backus/status/1004471335488122880 …
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If you enjoyed this thread, my blog post "Resistant protocols: How decentralization evolves" goes into more depth: https://medium.com/@jbackus/resistant-protocols-how-decentralization-evolves-2f9538832ada …
If you don't follow me yet, I tweet regularly about crypto, decentralization, and p2p. Plenty more to come, stay tuned!Show this thread
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Incentive issues (most shared NOTHING, tons of fake files + viruses)
Lots of attempted market mechanisms (from game theory to tokens) to fix incentives
Forking vs governance
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