How Decentralized Can the Internet Get?
Currently, just four companies -- including Google, Amazon and Microsoft -- control 67% of the server centers powering the apps and services you use every day.
When Satoshi Nakamoto's famous whitepaper came out in 2008, it gave the world something more than just the introduction of Bitcoin, today's best-known cryptocurrency. Bitcoin is based on the blockchain, a decentralized database, effectively, and this technology brought along the promise of a larger decentralization. So much so, in fact, that it gave birth to a movement calling for the use of blockchain as the data backbone of Web 3.0, a truly decentralized global network built to empower the users, not the corporations.
When you come to think of it, today's internet is hardly without its bottlenecks. For over one billion of its 4.66 billion active users, a foray into the global web usually begins with the familiar springboard of Google. Yes, it is a convenient way to find what you need among millions of indexed Web pages, but it is also a platform-centered bottleneck. Not to mention the fact that these queries go on to fuel Google's predictive models used for tailored ads — a raw material extraction process that has its critics.
Google is also featured on the list of the world's largest website hosts, along with Amazon and Microsoft, and there, we stumble upon another noteworthy figure: About 42% of the websites are hosted by one of the top five companies. While this may not be too impressive, there is something else to recognize —namely, the global cloud-hosting market. Among all the server centers powering the apps and services you are using on a daily basis, 67% are controlled by just four companies, including, rather unsurprisingly, Google, Amazon and Microsoft.
The internet also has a physical backbone: the major data cables that enable traffic to travel between nations and continents. These are typically owned by the largest, or Tier-1, internet-service providers, such as AT&T. But rest assured, the companies we have already mentioned a lot — Google, Amazon and Microsoft — are getting into this game too, with Google recently announcing a plan to connect the U.S. and Argentina with an underwater cable.
Inside the bottleneck
While all of the above may indeed indicate that the internet is not necessarily centralized, this may not pose a problem in itself. After all, this system may have developed following evolutionary logic, with its current state essentially reflecting the world's needs. And yet, as we can tell by the growing momentum for curtailing the Big Tech in the U.S., there are growing concerns regarding this state of play.
This debate, like many others, could spiral out into political bickering we are all too aware of, but any system dominated by a small group of power players will have its downsides for many of those outside this exclusive club. The outsized power wielded by such internet giants enables them to decide who goes online and who is shut off the web. It also fuels the questionable, from the privacy standpoint, data-collection practices running rampant in the industry and enables other monopolistic-style practices.
So, what exactly is the solution? Some would tell you, nothing less than a transition to Web 3.0, a new paradigm that will tap the latest technologies to transform the internet we know into a truly distributed network. To a large degree, this vision is set to be powered by the very blockchain technology that began with Bitcoin.
The blockchain revolution
Blockchain is by definition decentralized, operated by nodes in line with a certain consensus algorithm, of which there is a plethora out there. Bitcoin's blockchain only works as a ledger, storing transaction data, but the Ethereum blockchain, another key entity on the crypto scene, comes with wider storage capabilities. Its ability to run smart contracts — on-chain applications, effectively — is what puts it at the epicenter of the DeFi ecosystem, which aims to serve as a decentralized alternative to the traditional financial system.
If blockchain can decentralize finance, can it do the same for the internet? Hypothetically, yes, seeing how even apps and computational operations can be decentralized. Many developer teams are now working toward this goal, approaching it from different angles. The key problem to solve, it seems, is blockchain interoperability, or the ability to move data from one blockchain into another. This is crucial for making the blockchain ecosystem more interconnected.
Multiple projects aim to tackle the problem, including, for example, Polkadot, which made a splash in the crypto community. The project has won the backing of both traditional financial bigshots, such as Goldman Sachs and JPMorgan, and top crypto movers and shakers, including the Digital Finance Group (DFG), an investment fund focused on digital assets and supporting the blockchain ecosystem.
Granted, there are challenges that remain, including those concerning the ever-present question of data privacy. Blockchain is immutable, and once data is added to it, you cannot change or delete it without major consequences for the entire network, which could run against the right to be forgotten as stipulated by the GDPR. Furthermore, the idea of information and applications that cannot be shut down is in itself worrisome if you think about all the bad guys lurking online.
And yet, despite the challenges along the way, the idea does seem to be enticing, as a node-based, distributed architecture may indeed shift the power balance in the users' favor. This in itself makes the cause a worthy one, and even if what we end up with is not the all-around blockchain revolution, but rather its more widespread adoption, the opportunities it brings to the table are still too important to ignore.
Entrepreneur Editors' Picks
This Founder Quit His 'Prison'-Like Teaching Job Within 2 Months. Now, He and His Sister Are Helping Other Teachers Leave the Classroom and Achieve Financial Freedom.
If You Focus on Problems, You'll Only Find More Problems. Here's How to Focus on Solutions.
Facing More Than 15 Years in Prison, This Founder Transformed His Hustle Into a Powerful Personal Brand and Business. Now, He's Giving Back in a Big Way.
Apple Asks This Jarring Interview Question as a Secret Way to Evaluate a Candidate