Oldschool Internet & The Blockchain

Oldschool Internet and Open Standards are under assault from big corporations. Blockchain can help.

Aren’t you tired of typing your passwords over and over again? About wondering which email did you use to sign up for this particular site? Was it Facebook login? Oh no – you got another notification that another site got hacked. Jon Stokes, The author of “The Billion User Table” predicts that these problems could soon be over, with identity moving on the public blockchain.

the public blockchain amounts to a single, massive users table for the entire Internet, and the next wave of distributed applications will be built on top of it.

He presents a future where the equivalent of “Google Login” will be baked into the fabric of the Internet in a safe, distributed (not owned by any corporation) and secure fashion.

When you’d visit a service you want to sign up for, you click a button, the browser already knows who you are, and BAM, you’re there.

There’s no on-boarding or sign-up friction

If you are not creating software, this may not seem that important, but you’d be surprised how effective removing a single step is for helping users join. When I was working on monetization tools for WordPress.com customers, simplifying one step in checkout resulted in hundreds of thousands of dollars of revenue for the creators on our platform.

Jon summarizes it succinctly, and I love this phrasing:

Adding rows to your platform’s users table is how you win at software.

He also presents this outcome as inevitable, since the companies using the protocol would benefit from the network effects of this protocol being already present in our digital lives:

My guess is that the temptation to take advantage of blockchain-sized network effects will be so great, that companies will default to putting data on-chain rather than keeping it siloed.

The idea of an interoperable, distributed user table sounds very appealing to me as a programmer/hacker. That is also why it sounds very scary to me as a user. Let’s explore how can we make it safer, and why we need to.

We’ve already been there

The first thing that came into my mind is that we’re already there. We have email, an open standard that is effectively a distributed “user table” – when you sign up for a new service, they will most likely ask you about your email address.

  • The addressing system ( user@domain ) is distributed between domains.
  • It’s an open standard, not owned by any one corporation
  • It has built-in messaging, so at least one level of interoperability
  • One-click sign-ins are possible with email. Slack and WordPress.com will sign you in to your account with one click by sending you a “magic link” to your email. I have implemented this functionality myself and wish more services used it
  • It can be even turned into a “Social Network”, with built-in DMs and distribution – something that newsletters take advantage of
  • Tangentially: The biggest gripe that people have about email – long reply-all threads – have a few characteristics of the blockchain itself

In the 2000s, we have regressed from Email and other (like XMPP and RSS) open protocols. I remember being able to respond to Facebook Messenger messages over email. Now, the consumer internet seems to have fractured into private data silos, requiring a separate app for each simple thing I’m attempting to do. Ben Thompson points it out in “The Web’s Missing Interoperability“:

That, though, points to Web 2.0’s failure: interoperability is nowhere to be found

Sometimes this interoperability is removed on purpose, in an effort to bootstrap a gatekeeper that could reap all the network benefits:

The Facebook Cannibalisation manouver

Facebook also used to support XMPP – an open messaging protocol. I think it was the key to bootstrapping their Messenger platform in what I call The Facebook Cannibalisation Maneuver:

  1. Support wide access to your platform by supporting open APIs
  2. Attract technically sophisticated early adopters because they have nothing to lose – the platform already supports their apps
  3. These technical users help convince more people to join the platform
  4. Reach a critical mass to start seeing network effects on the platform internally
  5. Turn off the open APIs that were previously supported. Technical users are disappointed, but it’s not an issue anymore.

That’s why I’m skeptical about this assertion from the Billion User Table:

My guess is that the temptation to take advantage of blockchain-sized network effects will be so great, that companies will default to putting data on-chain rather than keeping it siloed.

I’m sure big players would welcome this protocol with open arms, suck any data out of it, and turn off support later, citing privacy issues.

Privacy&security concerns

The author does not go into privacy concerns too much, and I think these are all solvable problems that will be worked out in time. But I’m going to list them regardless because we don’t want to escalate problems to the level where the federal government has to step in, like in Europe with GDPR.

  1. We need to prevent users from being tracked across sites without their explicit consent. You probably don’t want every service you use to know you have a Tinder account, for example
  2. There needs to be built-in pseudonymity (as explained by Balajis) and a mechanism to switch “contexts.” People need burner identities and a mechanism to transfer data or “karma” to those,
  3. We need mechanisms for permission levels.
  4. We need a better mechanism for retrieving access than a private key. People will lose access, or fraudsters will steal them,
  5. At some point, governments will need to be involved, and this will create a whole new set of issues,
  6. We need to solve the spam

The Apple problem

The biggest obstacle to adopting a distributed, interoperable data store will be Apple. They deserve recognition for their effort in keeping your data private, but it’s downstream from their business model – lock you inside their ecosystem and prevent others from challenging their position.

You could argue that there are alternatives, but the dominant position of the iPhone means that you have to obey their rules if you want your app/service to be successful. And you know Google will eventually copy each one of these rules into the Android ecosystem:

  • If you want to distribute your app to iPhone users, Apple has to review it and agree. There is no other way
  • If you are offering a “federated login” option, like Facebook Login or Google Login, you have to offer the “Login with Apple” as well
  • If you are selling access to any digital goods on iOS, you have to use the Apple In-App-Purchase system, giving 30% of your income to Apple
  • Apps cannot “talk to each other” directly, only through a very small set of APIs. Apps don’t have any access to the filesystem, because of what is called “app sandboxing”.
  • Offering a different version of the experience provided by Apple is often forbidden

Apple’s strategy seems to move all interoperability into the Apple ecosystem and frameworks, making apps themselves interchangeable and commoditized. “The Billion User Table” is unlikely to work on iPhone because Apple effectively monopolized all the exciting benefits.

The app and services developers have to fight back by closing their own gardens and motivating users to stay within their properties. That’s why I think it’s unlikely to see big players participating in this interoperability.

We desperately need it to work

We still have a few open standards left: RSS is still powering podcasting, although Apple and Spotify are making moves to supplant it. The Web is still working, although it wouldn’t be permitted on the iPhone if it was created today. We have to protect and extend them. Working on open standards, and adopting them by “small players” is the only way to protect the Internet against the network effects of big players, and The Apple Problem.

I think we can extend existing “footholds” of interoperability, and work from there:

  • RSS: Sync the state of what podcasts I have listened to, or am listening so I can easily switch between the apps,
  • Email: Earn.com was a nice idea to give you money for replying to messages so people have to be motivated to spam you. Although I’d prefer a karma sytem.
  • XMPP: the open messaging protocol is close to dead, unfortunately and I have no ideas how to save it
  • HTML, JavaScript and CSS are being obfuscated by source minification and precompiling of source code – something that blockchain probably won’t solve and it’s a different story.

I agree with the author of The Billion User Table that we need interoperability, and I’d be happy if we started by bringing back the protocols of the 1990s. Blockchain solves the issue of “who hosts the user data, ” which is a brilliant insight in the original article.

But I’d start with throwaway identities and small stakes. We need to prove the concept before attracting regulator attention and big players’ cannibalization. Starting with extending and protecting existing open standards will let us understand the tradeoffs between privacy and interoperability. And we desperately need the latter – as the current privacy debate favors Big Tech. Per Ben Thompson:

I worry even more about small businesses uniquely enabled by the Internet; forcing every company to act like a silo undoes the power of platforms to unlock collective competition (a la Shopify versus Amazon), whether that be in terms of advertising, payments, or understanding their users. Regulators that truly wish to limit tech power and unlock the economic potential of the Internet would do well to prioritize competition and interoperability via social graph sharing, alongside a more nuanced view of privacy that reflects reality, not misleading ads

Where I disagree with Jon Stokes is that it will upend the present Internet. It is the missing piece of the original Internet, which was correct on so many ideas. I miss it a lot.

Education, the Umbrella Academy, and Wealth Creation

„Artur, your opinions always seem a bit extreme” – my friend, when we were discussing the public education last week. Education is one of my hot topics, and you can expect a related essay from me soon.

I enjoy people having strong opinions, people experimenting with their way of thinking, and trying out something new. That appreciation of experimentation extends to culture. I consider all four Avengers movies to be quite average, but Thor Ragnarok (trailer) is one of the best ones out there. Rise of Skywalker is disappointing, but The Mandalorian is excellent.
Popular franchises suffer from the curse of their own popularity. They have to appeal to everyone and thus cater to the lowest common denominator.

Less-popular offshoots, like Mandalorian, Guardians of the Galaxy, or The Umbrella Academy, are not scrutinized as strongly by studio executives. Not every plotline has to be sanitized, and not every single thing has to be optimized to death.

That leaves room for creativity, exploration, and pure fun. Education could be the same way if we stopped trying to extract production value out of the kids.

3 Interesting effects of the Internet

[Deliberate Internet] – Comet, overprotecting the digital content, and meritocracy

The comet expedition

My wife (whose handle everywhere is Made In Cosmos) is predictably very interested in seeing the Neowise comet before it leaves the sky. The comet will be visible over the next few days and disappear for another 6000 years of its solitary journey.

On a comet-hunting mission, we have couped up in our summer house and have been hunting for comet sights. Yesterday, the sky was perfect and we were trying to aim our telescope and powerful binocular into that elusive tail of a comet. To no avail.

Sometime after I was getting frustrated  – I looked upward and saw a beautiful, clear sky with the Milky Way spread before our eyes – a sight much better than a thousand comets.

What is it that an event like a comet or a deadline gets us all excited and motivated, but we neglect to enjoy what we already have? Humans are such suckers for scarcity.

The Neowise shot by Tony Hallas. Here is another good one.

Overprotecting the digital content

The creators I help to sell put much effort into their work, and they deserve to be paid. They worry about not having a sales copy compelling enough, or their customers copying and sharing the creations, cutting them out of their rightful compensation. They turn to the protection mechanism – password-protected PDFs or locked-down video players to ensure that it doesn’t happen.

Yesterday, I published an article with 10 reasons why that kind of overprotection is hurting your sales, annoys your customer, and is hurting the relationship with them.

3 Surprising Things on the Internet

  • Did you know there is a special shortcut to display a random Wikipedia article? By going to https://en.wikipedia.org/wiki/Special:Random, you will be taken on a random journey, but be forewarned – Wikipedia has MANY articles about random villages and 7th-grade celebrities. Me being me, I immediately thought, „Wait, what if I built a WikiRoulette with this?„. It turns out somebody already thought of that! Check out http://wikiroulette.co/. Today I learned about Forest Nightshade, Fencing at the 1956 Olympics, and the “List of places in Aberdeenshire”, wherever that is.
  • A belief in meritocracy is not only false: it’s bad for you [Princeton Press] enumerates the reasons why the world is not meritocratic, and the „meritocracy fallacy” is an easy excuse for the lucky. The online world revels the idea of meritocracy. Everything is democratized (setting free publishing and commerce is something I contribute to), everyone can participate and, anyone can start something new – they only need a laptop and grit. However, like in any human industry, connections, and lucky breaks people have gotten in the past matter a great deal. The world is getting meritocratic (with initiatives like Starlink and Remote work), but we are not there yet.
  • Mario takes a flight in the days of the Coronavirus is an artistic rendition of what would Super Mario first level look like, if the pandemic hit „World 1-1″

Overprotecting your creation hurts you the most

How can I ensure my customer won’t share the video they purchased? Can I protect the PDF I sell to be shared only once? How can I lock my daughter in a high tower, so that no worldly harm befalls her?

The tension between sharing our creations and being paid was always tricky. But the digital world adds another layer of complexity – your creations can be copied and distributed also after the purchase, keeping you out of the loop of future profits.

A natural instinct is to seek the answer in the technology that permitted sharing in the first place – can I protect the content I sold, so that only the customer has access to it?

Yes, but you shouldn’t. Over-protecting your content focuses on extraction over providing value. Here are 10 reasons why (Digital Rights Management)[1] DRMs are a bad idea:

1 – It is just impossible to prevent sharing

Trying to effectively protect content against sharing is like fighting against skilled guerilla units in the digital jungle. Sure, you can deploy your defenses, but they will always find a sneaky way around them while you drain your resources.

  • You will use streaming service to gate-keep your videos, They can use a project similar to `youtube-dl` to download any video file.
  • You will block downloading images on the page, they can just take a screenshot.
  • You can password protect a PDF, they can use a „virtual printer” to generate a new, open one.

If you give a customer any way to access the content, that way can also be used to copy that content and/or record it.

This is a fundamental feature of the Internet. Content is meant to be easily reproducible and shared. The only way to win is to make it easier and more compelling to pay.

2 – You are treating your customer like a thief

Imagine if visiting your friend was like going through airport security. Did you bring any liquids? What’s that in your backpack? Oh no, your belongings are 300 grams too heavy, better pay for extra luggage!

Jumping through DRM hoops is sending a clear message to all your customers:

We don’t trust you. You have to go through this process because we think you may steal something. We’re watching you.

This message gets sent whenever a person who decided to pay you opens their purchase. It’s your biggest fans’ first experience with your product.

3 – People who steal are not your customers

Do you have a portrait of your ideal customer?

Is it a teenager sitting in a warez bulletin board all day and polishing his torrent workflow? If not – why are you focusing on them?

People who download loads of content are not used to paying for it. When they won’t be able to find a free copy of your content – they will steal from your competitor or resign before they open their wallets.

And if you don’t know who your ideal customer is – maybe you should focus on that.

4 – But they may become them

Sure Artur – but what about when somebody buys something and then gives away to all their friends?

  1. What do you think about sharing books? Borrowing a blender? Some sharing is healthy and natural.
  2. It actually benefits you.

Bootleg content is a customer acquisition mechanism.

The most successful Internet entrepreneurs build sophisticated sales funnels. For example, they would have many interactions with the customer before they buy:

  1. A visitor interested in your field finds your article online.
  2. After the second article, they sign up for your email list.
  3. You provide consistent value and build up trust.
  4. After a few months, you release a product and the follower becomes a customer.
  5. Profit.

Even if they try to “convert” their friends to trust you too, the friend lacks the relationship you have built. They didn’t receive your emails and they didn’t laugh at your corny jokes.

Demonstrating the full value of intellectual property requires giving it away. Once the friend sees the value you provide, they will either:

  1. Be blown away by the quality.
  2. Decide it’s not for them and they will never be your customer.

Both of these outcomes are ideal for you and save you considerable time in the signup funnel and marketing.

This is what trial period and discounts aim to accomplish, but they have side-effects. When you repeatedly discount, customers start treating the lower price as the ‘real’ one, and value the product less because ‘it must not be worth the full price’. Keeping a blind eye to questionable behavior gives you a way out. You can demonstrate how valuable your product is, without discounts that lead to price erosion.

People who “sneak onboard” often become customers themselves – and even the most loyal ones! The converted always are.

5 – You are making it hard to enjoy your content.

Open standards empower creators to build new tools or use the content in unpredictable ways. Things are better connected. These are the core assumptions under which the Internet was built. You will not be able to predict all the weird, fantastic, and inspiring ways your content will be accessed.

  • I may read your PDF on an iPad, iPhone, Android tablet, Kindle, or printed out,
  • I frequently save workout or yoga videos to watch while being offline in the garden or on the road,
  • I like to read the text in my Pocket or Kindle apps.

Any sort of „protection” breaks my ways of consuming your content and often makes it useless for me. Sometimes enough to give up on something I have paid for (and that is the reason I stopped doing yoga, your honor).

6 – You are blocking people with disabilities from accessing it at all.

I can manage the inconvenience with some grumbling – however, not everybody has that luxury. Tools that people with disabilities rely on are by nature incompatible with any sort of content protection schemes. Content protection’s entire purpose is restricting access to the narrow subset of users and use cases.

Mind you, that you yourself will join those “people with disabilities”. You will get older, lose a little clarity in your vision, and suddenly the new sexy apps developed by 20-year olds in their glass palaces will become confusing and unusable.

Helping my grandparents navigate the changing digital landscape is a sad and sobering experience. Any additional hoop that you make them jump through may render your content inaccessible.

7 – You are turning your creation into a commodity

The best online businesses rely on fostering the relationship between you and your customers. You share some free content, they are more receptive to trust you with their hard-earned money. It’s a dance of mutual respect and the first sale is only a part. If they like what you are doing, they will return for more, or even support you financially.

DRM software turns this delicate relationship into buying a sack of coal under the watchful gaze of security. Not even a fistful too much! You are being watched.

You are signaling to your customer that this is a purely monetary transaction. They are not entitled to even sharing your work with a friend, because they would be violating rules ?. Oh, the rules.

8 – Are you really losing anything?

If you are selling digital products, what is your marginal cost? How much do you pay to create another copy of your PDF, video, software?

When your content is being shared, it is not stealing. You don’t lose your income whenever somebody downloads a copy. As I mentioned – people who are likely to download illegal copies of your work are either never going to be your customers, or they will because they had a peek.

9 – What is your true motivation for blocking the content?

What is the core motivation for trying to protect your piece? Is it some misplaced sense of justice or is it legitimately best for your customer?

If that content truly makes you proud and you believe it would help them – what is the best outcome if the customer does not want to pay? Is this motivation coming from a place of fear?

  • Fear of your work being „not good enough” to pay for?
  • Fear of the offer not being compelling enough?
  • Fear of not having enough paying customers to make it all worthwhile?

Fear is not a good place to create amazing content people are going to love. This mindset will drag you down and prevent you from soaring into creative skies.

10 – What do you choose to believe about people?

Do you really want to believe that people are only waiting for an opportunity to steal? Or do you want to trust them to appreciate the value you provide?

What can you do instead

  1. Focus on the relationship with the customer. I have written a little more about it in Your product is either hospitality or a commodity.
    I believe that all kinds of digital goods will be commoditized sooner or later. The only “moat” you can build is the customers’ trust.
  2. Put the energy you would spend on DRM into innovation and creating new products. Once your old one gets shared, you should be already releasing a new one.
    Subscriptions are an effective form of protection here – instead of sharing your content once, you drip the value to the customer – and they see the benefits of paying you.
  3. Sell more. Get more paying customers – after all, it’s about how many customers choose to pay you, not how many choose not to.
  4. Raise prices. Focus on the customer who is not driven to pay less, but the one who is driven to get more value. Paradoxically, more expensive products get downloaded less.

Now go, create, and sell.