In the name of blatant self-promotion, below the fold I look at how this insight has held up since.
- The income to a participant in a P2P network of this kind should be linear in their contribution of resources to the network.
- The costs a participant incurs by contributing resources to the network will be less than linear in their resource contribution, because of the economies of scale.
- Thus the proportional profit margin a participant obtains will increase with increasing resource contribution.
- Thus the effects described in Brian Arthur's Increasing Returns and Path Dependence in the Economy will apply, and the network will be dominated by a few, perhaps just one, large participant.
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Coinbase Global Inc. is already the second-largest validator ... controlling about 14% of staked Ether. The top provider, Lido, controls 31.7% of the staked tokens,That is 45.7% of the total staked controlled by the top two.
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There have been many attempts to create alternatives to Bitcoin, but of the current total "market cap" of around $2.5T Bitcoin and Ethereum represent $1.75T or 70%. The top 10 "decentralized" coins represent $1.92T, or 77%, so you can see that the coin market is dominated by just two coins. Adding in the top 5 coins that don't even claim to be decentralized gets you to 87% of the total "market cap".
The fact that the coins ranked 3, 6 and 7 by "market cap" don't even claim to be decentralized shows that decentralization is irrelevant to cryptocurrency users. Numbers 3 and 7 are stablecoins with a combined "market cap" of $134B. The largest stablecoin that claims to be decentralized is DAI, ranked at 24 with a "market cap" of $5B.
Protocol | Revenue | Market |
---|---|---|
$M | Share % | |
Lido | 304 | 55.2 |
Uniswap V3 | 55 | 10.0 |
Maker DAO | 48 | 8.7 |
AAVE V3 | 24 | 4.4 |
Top 4 | 78.2 | |
Venus | 18 | 3.3 |
GMX | 14 | 2.5 |
Rari Fuse | 14 | 2.5 |
Rocket Pool | 14 | 2.5 |
Pancake Swap AMM V3 | 13 | 2.4 |
Compound V2 | 13 | 2.4 |
Morpho Aave V2 | 10 | 1.8 |
Goldfinch | 9 | 1.6 |
Aura Finance | 8 | 1.5 |
Yearn Finance | 7 | 1.3 |
Stargate | 5 | 0.9 |
Total | 551 |
Based on the [Herfindahl-Hirschman Index], the most competition exists between decentralized finance exchanges, with the top four venues holding about 54% of total market share. Other categories including decentralized derivatives exchanges, DeFi lenders, and liquid staking, are much less competitive. For example, the top four liquid staking projects hold about 90% of total market share in that category,Based on data on 180 days of revenue of DeFi projects from Shen's article, I compiled this table, showing that the top project, Lido, had 55% of the revenue, the top two had 2/3, and the top four projects had 78%.
the common meaning of ‘decentralized’ as applied to blockchain systems functions as a veil that covers over and prevents many from seeing the actions of key actors within the system. Hence, Hinman’s (and others’) inability to see the small groups of people who wield concentrated power in operating the blockchain protocol. In essence, if it’s decentralized, well, no particular people are doing things of consequence.In other words, it is a means for the system's insiders to evade responsibility for their actions.
Going further, if one believes that no particular people are doing things of consequence, and power is diffuse, then there is effectively no human agency within the system to hold accountable for anything.
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Dewayne Hendricks reported at SHARE XLII, in March, 1974, that he had successfully implemented MVT-CP handshaking for page faulting, so that when MVT running under VM took a page fault, CP would allow MVT to dispatch another task while CP brought in the page. At the following SHARE, Dewayne did a presentation on further modifications, including support for SIOF and a memory-mapped job queue. With these changes, his system would allow multi-tasking guests actually to multi-task when running in a virtual machine. Significantly, his modifications were available on the Waterloo Tape.
Dewayne became the chairman of the Operating Systems Committee of the SHARE VM Project. Under his guidance, the Committee prepared several detailed requirements for improvements to allow guest systems to perform better. At SHARE XLV, in 1975, the Committee presented IBM with a White Paper entitled Operating Systems Under VM/370, which discussed the performance problems of guests under VM and the solutions that customers had found for these problems. Many of the solutions that Dewayne and others had found, such as PAGEX, made their way into VM fairly quickly, apparently as the result of customers’ persistence in documenting them. By SHARE 49, Dewayne was able to state that, “It is now generally understood that either MFT or MVT can run under VM/370 with relative batch throughput greater than 1.” That is to say, they had both been made to run significantly faster under VM than on the bare hardware. Dewayne and others did similar work to improve the performance of DOS under VM.
He has been involved with radio since receiving his amateur radio operator's license as a teen. He currently holds official positions in several national non-profit amateur radio organizations and is a director of the Wireless Communications Alliance, an industry group representing manufacturers in the unlicensed radio industry.In particular:
Back in 1986, he ported the popular KA9Q Internet Protocol package to the Macintosh, allowing the Macintosh platform to be used in packet radio networks. Today, thousands of amateur radio operators worldwide use the NET/Mac system he developed to participate in the global packet radio Internet. This system continues to be developed and deployed by the amateur radio service.Dewayne was a member of the Amateur Radio Digital Communications Grants Evaluation Team from 2021 to his death. ARDC grants around $5M/year:
ARDC makes grants to projects and organizations that are experimenting with new ways to advance both amateur radio and digital communication science. Experimentation by amateur radio operators has benefited society in many ways, including the development of the mobile phone and wireless internet technology. ARDC envisions a world where all such technology is available through open source hardware and software, and where anyone has the ability to innovate upon it. To see examples of the types of grants we make, go to https://www.ardc.net/grants/.
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- Started in Fall ‘96
- Covered 35 mi area in south bay
- Delivered from ISDN to 30 Mbps bandwidth
- Used both licensed and unlicensed equipment (Part 15 and 97)
Prior to forming Dandin Group, he was the General Manager of the Wireless Business Unit for Com21, Inc. He joined Com21 following an opportunity to participate as the Co-Principal Investigator in the National Science Foundation’s Wireless Field Tests for Education project. The project sucessfully connected remote educational institutions to the Internet. The test sites ranged from rural primary schools in Colorado, USA to a University in Ulaan Bataar, Mongolia.Com21 was founded by Dewayne's mentor Paul Baran.
Ulan Bator rooftop Courtesy Glenn Tenny |
a partner in the Advanced Networking Project with Minority Serving Institutions (AN-MSI) an EDUCAUSE project funded by the National Science Foundation. The project's purpose is to provide improved communication services, including Internet access, to underserved minority and tribal-nation institutions. Because these institutions are frequently in remote locations which currently lack communication infrastructures, Internet-linked services delivered by wireless networks offer the most appropriate and cost-effective approach to connecting their communities to the world and to each other.The project description is here. NSF Awards $6 Million to Help Minority Schools Prepare for Advanced Computer Networks is EDUCAUSE's press release:
National Science Foundation (NSF) Director Rita Colwell announced last week at EDUCAUSE '99 that the foundation has awarded almost $6 million over four years to help institutions of higher learning that traditionally serve minority communities prepare for the next generation of information technology and computer networks. The grant will be administered by EDUCAUSE.
Tetherless Access was one of the first companies to develop and deploy Part 15 unlicensed wireless metropolitan area data networks using the TCP/IP protocols. He has participated in the installation of these networks in other parts of the world including: Kenya, Tonga, Mexico, Canada and Mongolia.
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"We’re replacing the entire existing telecom infrastructure with a wireless IP [Internet protocol] network," says Dewayne Hendricks, CEO of Fremont-based Dandin Group and former general manager of Com21’s wireless business unit. "Since the country is a monarchy, there was only one guy to convince, Crown Prince Tupouto’a, and then we just went for it."Tonga had about 11,000 households and 6,500 phone customers, with an 8-year wait to get a phone. The goals of the project were to deliver 30Mbit/s IP to each home for a customer end budget of $450.
Hendricks’ firm plans to replace Tonga Telecom’s aging landline system—which still uses mechanical relays—with a broadband wireless network for data, video and telephony (using voice over IP). It will run at 30Mbps with user access at 2Mbps and 10Mbps by the end of next year. "We can get all the spectrum we want," Hendricks says.
The prince’s objective, Hendricks says, is to convert the country’s largely agricultural workforce, which has an astonishing 95 percent literacy rate, into knowledge workers, such as programmers. The government launched the Royal School of Science for Distance Learning last year, using Internet connections to allow students to take courses at international universities. There are just fewer than 100,000 people in Tonga scattered across 170 islands.
"We’re going to an Internet-style mesh network," says Hendricks. MMDS, which some carriers are using to deliver broadband services, won’t scale well for an IP network, he says. Hendricks, a technical advisor to the FCC on ultrawideband (UWB) technology, is considering UWB for the network.
At Turtle Mountain Chippewa Reservation in North Dakota, he's installing a wireless network. In its initial form, the system will meet FCC requirements governing frequency, power, and transmission technology. But not for long. Hendricks' mission is to build the best system possible - even if it's illegal - and he intends to use every tool at his disposal. Should the FCC crack down, the tribal leaders will hoist the flag of Native American sovereignty, asserting that they can do whatever they want with the sky above their reservation.Dewayne's work on the reservation, in Tonga and elsewhere was an attempt to demonstrate the problems with the obsolete US spectrum allocation policy:
There's no sensible reason why Americans shouldn't have inexpensive, ubiquitous, high-performance broadband access, Hendricks says. Using technologies that are already available or in fast-track development, everyone could enjoy reliable, fully symmetrical wireless at T1 speed or better. No more digital divide. No more last-mile problem. No more compromises. The only things standing in the way are the FCC, Congress, and "other people who just don't get it."
One of the biggest barriers today standing in the way of deployment of advanced wireless communications systems turns out not to be the technology, but restrictions related to regulatory policies. This presentation will discuss the nature of these barriers and how they have affected the development of wireless data systems over the years.The slides are here.
The speaker will also discuss on-going work in which he is involved to use advanced wireless technology to deploy multiservice IP systems as part of infrastructure-development projects in the Kingdom of Tonga and with Native American groups in the US, and how such projects are able to deal with the limitations imposed by conventional regulatory barriers.
From a future historical perspective, are we descendants of Icarus? Is our Internet like Icarus' wings? Are our protocols, ciphers and codes, brilliant capabilities built on immature engineering, which like Icarus' wax and feathers, are capable of taking us to great heights, but systematically flawed? For a brief historical moment, humanity has flown high like Icarus, on a vulnerable first generation Internet platform. Which as been used for securing and using distributed ideas, arts, media science, commerce, and machines. Promising brilliant futures with the arrival of networked things, autonomous personalized services and immersive media. But, now our first generation Internet , built on a fragile global network of vulnerable codes and protocols, is falling apart, like Icarus' wings, through a triple shock from:Dewayne's slides for this talk are here. Video of the talk is on YouTube
Humans eventually conquered the barriers to flight and learned to build durable and resilient aircraft. Similarly, humans must learn to build a more reliable, private and secure Internet for communications, innovation and commerce. We will share our thoughts on how we might go about the design of a more durable and resilient Internet:
- Massive dotcom data stalker economy built on mining of terabytes personal data.
- Ubiquitous criminal penetration of financial and identity networks, on our devices, in the cloud.
- Pervasive state intruders at all levels and every encrypted hardware and software node.
- How prepared is the Internet for future human benefit?
- What are the attributes of a future more durable internet?
- What are the existing assets that could be harnessed?
- What needs to be developed?