Hello Steemit: Three Questions I’m Eager to See Answered In The Blockchain World
Hello Steem community. My name is Doug Petkanics (@dob), and I’m a software developer and entrepreneur in New York City. I run engineering at an early stage startup, and previously I ran engineering at a data focused company called Hyperpublic, which was acquired by Groupon in 2012. I’ve been spending a lot of time lately hacking on Blockchain technology, and I wanted to open up discussion on a few of the big questions I’m excited to see answered over the coming months. Let me know what you think.
1. Will polished Dapps built on top of Ethereum and IPFS reach the mainstream?
A little over a month ago there was a lot of enthusiasm in the Ethereum community about the great distributed apps (Dapps) that were being built and would soon be launched on top of the Ethereum blockchain. The common examples that people would point to would be prediction markets like Augur and Gnosis, accounting systems like Balanc3, and corporate governenence and investment structures like the DAO. When combined with distributed asset storage like IPFS, it’s also possible to build more consumer facing web applications such as a distributed community like Steemit along with other social applications where people maintain control of their own data and aren’t beholden to any central authority.
Unfortunately, the $50,000,000 DAO heist sucked all of the air out the room. While I’m sure development on these Dapp projects has continued, the community excitement around the launch of them hasn’t gotten as much attention as it did previously. I’m sure these, and many other apps will come to market shortly, but will any of them reach the mainstream? There will be challenges...
- The cold start problem - new users need to acquire ether in order to participate and write data into these apps. That’s a huge barrier.
- UX - I don’t think we’ve settled yet on the ideal UX for distributing a distributed app - writing a native (web) client that talks to a local full node comes with a huge mental overhead and bootstrapping cost to a user. But if you’re interacting with a hosted version, you lose decentralization and control over your account. (I like what Metamask has done to address this).
- Will the apps provide more utility than a centralized version would? This comes down to use case more than execution…but I think the world is still waiting for the killer dapp to emerge.
Personally, I believe that for certain use cases the combination of decentralization, ownership over your data, censorship resistance, consensus achieved by the blockchain, and the integration of seamless transfer of value through cryptocurrency, dapps serve as a a needed solution and will be successful.
2. Will The Lightning Network enable micropayments on top of Bitcoin?
Since Bitcoin represents “digital money” that can be transferred from machine to machine, many people expect that Bitcoin could be used to enable small frequent transactions, or micropayments. Out of the box, these people would be mistaken. In order to achieve consensus, Bitcoin settles for eventual consistency (10 minute blocktimes), and the network has a block size which limits the number of transactions that can occur per second. These two limits make it too expensive and infeasible for Bitcoin to support a high volume of very small transactions, such as paying a small amount for every page view on a web site, or for every API call that you make to an online service.
There is good news however, as there is a protocol proposed called The Lightning Network, which fulfills exactly these requirements. It supports a high volume of transactions off blockchain, that are guaranteed and secured by the Bitcoin blockchain itself. In addition, the lightning network protocol allows holders of Bitcoin, to make a profit off of their holdings, by temporarily tying it up to secure the transactions on the blockchain network. This is awesome, and brings a whole new potential suite of applications that can be built on top of Bitcoin.
Technically, this is a great accomplishment, and I look forward to this technology being available for developers to build creative ideas on top of, but unfortunately, the same questions that always surround micropayments remain. Do consumers actually want to interact with content or services using micropayments as the underlying source of access? Are people comfortable dealing with the mental overhead and anxiety of knowing that every action will have a cost? Or would they rather just know the flat monthly fee for metered access? I believe that these will be challenges, and much like the eagerly awaited “killer dapp”, the killer micropayment based service will do wonders to open up the mainstream’s eyes to the potential of blockchain technology.
3. As Steem’s userbase grows will content quality increase as a result of positive community incentives, or decrease as a result of people gaming the economic incentives?
Being brand new to Steem myself, this is the question I’m least equipped to predict, and most interested in the community’s opinions on. The potential is amazing. I believe that a distributed community management platform is a great candidate for the killer dapp.
The fact that it is being used to bootstrap a crypto currency which can be used in a marketplace and traded on exchanges is both a brilliant incentive and also potentially a source of conflict within the community. If the token being awarded and used on Steemit was purely internal, then communities would regulate themselves in a more isolated way, with very little incentive to sacrifice quality or game the system. But since the token flows in and out of the community to speculators and market actors, there’s always the likelihood of manipulation in order to reap real world profit. The benefit of this is openness is clear in that it brings far more people to the community quickly, who otherwise would never be exposed…but at what price?
I’m excited to participate in the Steem community going forward. If other blockchain technologies can serve as examples, then there will likely be bumps in the road along the way, but overall progress will be upwards, and the internet will benefit from a decentralized, blockchain based forum for information sharing and discussion.