Substratum vs. The Web Hosting Cartel

in crypto •  10 months ago


Would you believe it if I told you the web hosting industry in the USA is extremely centralized? If you've ever built a website, you've probably heard of web hosts like HostGator, BlueHost, JustHost, A Small Orange, and Arvixe. These are all major players in the web hosting industry. What you probably didn't know is this... all these brands are owned by the same company.

EIG (Endurance Group International) is a company with the following business model...

  1. Buy smaller web hosting brands.
  2. Backend changes to decrease costs.
  3. Data center consolidation.
  4. Reduction of existing employees.

In other words, EIG buys up web hosts and turns them to s***. If you want to read more about EIG, click here. The other big player in the web hosting space is GoDaddy. They're also notorious for poor server performance and customer service.

So, how do these companies get away with providing such a poor customer experience?

The most obvious answer is that most people simply don't know better. A quick Google search for "web hosting" brings up GoDaddy and HostGator in the first three results. Clicking through to HostGator brings up a splash page that promises a $3.95/month deal. Hey, that's like the price of a Starbucks coffee. What do I have to lose? Just like that... HostGator gets another customer.


However, the real issue is much darker and deeper. These terrible web hosting companies run extremely lucrative affiliate programs to capture more leads. The more influential you are, the higher your commission rate. This gives popular people a financial benefit to promote a shitty service. If you don't believe me, check out Pat Flynn's monthly income reports.

Just last month, he received over $30,000 in commissions from Bluehost. For someone who prides himself in helping the "little guy", he's weirdly okay with financially benefiting off promoting one of the worst web hosts in the business. I think that's called greed.

Okay, now we're getting a little off topic, but I really wanted you to know WHY and HOW the web hosting industry is centralized.

The short answer is because the web hosting cartel has a ton of money. Instead of using that money to provide a better customer experience, they use it to pay affiliate marketing gurus like Pat Flynn to promote them. Very smart.

How Traditional Web Hosting Works

Shared hosting is the most common type of web hosting. On paper, these plans look like a great value. They're often in the $3.95/month price range. However, shared hosting plans are actually the big moneymakers for web hosts. On a shared hosting plan, you share a single server's resources with thousands of other users. Many of those users may have multiple websites on their hosting plan. Thus, a single shared server may be serving thousands of websites.

The Downsides of Shared Hosting

Shared hosting, while economical, has many downsides. Like I said earlier, a shared hosting server often servers thousands of websites. If one of those websites gets DDOSed, then the whole server is affected. Also, if the web host doesn't provide strict resource limits with throttling, a haywire process on someone else's account may very well affect your resource allocation.

What is Substratum and Why We Need it

Substratum is developing an open-source foundation for the decentralized web, providing free and unrestricted access to content for a new Web 3.0. The Substratum Network is a worldwide collection of nodes that uses industry- leading cryptography to deliver secure content anywhere, all without the need for VPNs or Tor. Substratum will revolutionize the hosting industry with per-request billing via microtransactions, all handled by blockchain technology and artificial intelligence.

When Substratum's network matures, I think it has a great chance to steal some web hosting market share. I don't see traditional enterprise hosting going away in the near future, but I can really see Substratum take some of the shared hosting market.

Uncensorable & Decentralized

In the traditional web hosting, your content is hosted on a single server in a single location. It may be propagated to multiple CDNs around the world, but it's still centralized.

Content hosted on Substratum's network is uncensorable and decentralized. This means the government won't be able to approah a centralized entity and demand the content be taken down. If you want to stay anonymous, you can be anonymous.

A Scalable Network

In shared hosting, performance decreases as more users get hosted on the server. Substratum works the opposite way. As more users run nodes and host on the Substratum network, network performance increases.

A Global CDN

In traditional web hosting, CDNs (content delivery networks) are very expensive. For example, MaxCDN's plans range from $9/month to $299/month depending on how much data you need. CDN services are expensive because these companies have to maintain datacenters all around the world.

Substratum gets around this issue because it's decentralized by design - thus it doesn't need to invest money into becoming decentralized. The network will have nodes all around the world, and the Substratum will use machine learning algorithms to serve content from the nearest nodes.

A Value-Driven Service

Three things are needed to win the hearts and minds of customers - great marketing, a superior product, and good pricing. I've already explained why Substratum is a superior product to traditional shared hosting. I also believe Substratum will start doing some heavy marketing work once the V1 platform is launched, so let's talk about pricing.

While Substratum's pricing will be determined by market dynamics once the network goes live, the Substratum team has assured us that it will cost less than traditional hosting. Here's a quote from their whitepaper.

Actually it is less expensive. Unlike other hosts who charge you whether your content is doing something or not with SubstratumHost you are only charged for each request. As each request comes through the amount of CPU power, Network Bandwidth and the amount of data are calculated and once a threshold of 1 ATOM is reached a micro-transaction will take place between the HOST and the NODE and Substrate will be transferred. The result of all of this is that since you only pay for what you use the cost is reduced.


The traditional shared web hosting market is ripe for innovation at the moment. The industry is filled with shady affiliate marketers promoting terrible services. Once Substratum's network matures, it will be better performing, safer, uncensorable and cheaper solution. Let's bring the decentralized web to the masses.

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Great article! 💪🏼 Thank you for the effort. Will make sure to spread this article, as more people need to learn about the Substratum project!


Thank you for reading and sharing!