ICP has a flawed endgame

Watercooler
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When I think of ‘crypto’ I like to think long term, like, hundreds and even thousands of years into the future…

The odds off a decentralized cloud being used by the mass of the global population will likely come about without the global population each individually deciding to be data-conscious individuals and utilize Web 3 services. At some point Web 3 will be the default internet, the same way you crack open a laptop today and you’re on Web2.

I think this massively utilized web 3 trustless service of the future will be something open-source that comes pre-installed in the software of the average computer you’d buy at BestBuy or NewEgg in 2050.

Server providers would be trustlessly payed out with BTC, XMR, or their native countries’ Federal Reserve dollar.

I don’t believe the ‘powers that be’ will ever allow for a project/protocol like ICP to become so massive with its own native token, as its liquidity providers would become so wealthy they could legitimately test the order of other countries governance and completely destroy currencies like the many countries under the Fed Reserve.

The most likely case if ICP doesn’t fail is that it is taxed into oblivion where basically no gains can be made, and even holding native ICP without staking is taxed up to 80% on ‘cashing out’ or any transactions.

I believe stocks built on fed currencies will fade in the far future and there will be a legitimate battle between crypto and regulations that will start at the biggest scale yet with crypto laws passing late this year (summer).

I think POW is the only workable system for the longevity of crypto, as BTC and XMR remain immune to taxes and regulation. (BTC can still be washed/mixed in the present)

I think XMR has a more promising future than ICP, despite having nothing to do with web 3.

I think the best catalyst for legitimate web 3 would be an open-source POW system that is consistently maintained by a community with legitimate web 3 in their minds and none of this Davos meetup stuff.

I think the ICP community should become more concerned with never accepting subpoenas from the IRS and any agency whatsoever for confiscation for reasons of taxes and so on. It’s the only route for longevity and actually being a legitimate project and not just repackaged AWS and server providers.

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Thanks for let us know you vision.

But each product have their own selling point, you cannot compare a open ledger with a cloud computing.

Other chain are thinking how to put video on chain like Sui and Solana. It is hard to find liquidity in ICP but it doesn’t mean it is worthless.

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It’s interesting that you believe it’s government agencies and law enforcement that will hamper ICP’s growth. ICP is a disruptor to BigTech cloud (AWS, Alibaba Cloud, GCP, etc), are you suggesting that these platforms will put pressure on government agencies to create hurdles to ICP adoption?

I’m also interested to hear more why you think a native governance/utility token would be a replacement for money. I don’t think I’ve seen any parallel to this. At one point some people theorized that ETH could become money, but that seems to no longer be a viable narrative. I haven’t seen an example in the traditional world of an asset replacing fiat money either… in fact, the trend has been to the contrary as fiat has replaced hard assets like gold as money.

It’s worth pointing out that similar posts have been made throughout the history of Bitcoin (however, replace BigTech with banking and central banks). However, as history has shown, governments have been pretty inefficient in slowing down Bitcoin’s adoption, let alone shutting it down.

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They can discourage all they want. It works just take more nodes in friendly places and ICP world still win (given your scenario)

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Wow, I just checked out the forum again after getting my regular digest email. It seems like this ecosystem is imploding right now. People are upset about videos not being hosted on a whitelist-based blockchain, and money-based governance is also used to cause lots of contention. I didn’t follow this community enough to really get a clear picture, though. I had already written about the problem of hosting files on a blockchain earlier in this thread.

You are entirely correct that cryptocurrencies that are not directly issued by the state or international banks will not be tolerated. Even proof of work coins got seriously crippled when they were treated like currencies for the sake of taxation, but not allowed as a regular means of payment or paying those taxes. And the KYC/AML laws and “tainted” coins make it almost impossible to transact value in the real world. Even if CBDC may use blockchain as a technology, they have nothing in common with what blockchain has always stood for: souvereignty of the individual, obsolescence of middlemen, and decentralisation (especially in the sense of being public goods, operated by anyone who volunteers).
End-game wise, even proof of work is insufficient, IMO. Nobody wants to store and verify the integrity of thousands of years of payments back to genesis. And nobody wants a fork going back more than a few blocks. To even use a blockchain, you have to have a pre-funded account to pay transaction fees. All state is managed on-chain, and transactions are processed on-chain as well. However, there is no actual need for all of this. Even if we ignore the history problem, a naive PoW blockchain could have been much more lightweight and more centralised and more user-friendly if it simply included only the transactions, without any verification, and did not track currencies or UTXOs or any other kind of state. Instead of paying transaction fees, a per-transaction proof of work for competing for block space could have been used, and that proof of work could also be used to strengthen recent blocks.

The actual cryptocurrency ledger would then be a secondary program that reads the blockchain and looks for valid transactions in the blocks, and processes them separately. This way, the blockchain nodes themselves would not need to track any state, and there would be nothing forcing you to have pre-funded accounts to do anything on the chain, as the block space contention problem would be solved without spending money. Not requiring pre-funded accounts, and no transaction fees, would mean that you do not have to go through KYC/AML to do literally anything at all on a blockchain, even if it wasn’t suppose to involve money. Such as updating a DNS record or something. This would mean you don’t need to ID with a centralised exchange, and you don’t need a potentially multi-day setup process to access the ecosystem. And you would have much stronger privacy, even when using currencies. It would also be much harder to regulate or track.

Another mistake of blockchains is to try to have eternal storage. Garbage will always get posted on a blockchain, and even useful data turns to garbage after a while. It is an eternally-lasting, eternally growing system. Eternity is pretty long, and eternal growth is obviously impossible.
Once you have a blockchain that is not inherently coupled to state and currencies, you can also look at weaker versions of blockchains that do not need to guarantee the ability to validate everything back to genesis. A distributed system that only needs to create consensus among currently active participants for a timeframe of maybe an hour or even a few days could be designed in a vastly different fashion, without causing the eternal growth problem. Such a system would have weaker guarantees than a blockchain, but almost nothing really requires the excessive guarantees of a blockchain.

Web3 in general, as it currently is, has a flawed endgame. Many blockchain foundations have started prefer to fund self-sustaining projects instead of foundational technology. Meaning most things that pop up now will be something like a staking scheme or an NFT flip or something useless like AI on the blockchain.

I would like to take this opportunity to restate the obvious: blockchain and web3 was initially intended to remove trusted middlemen and authorities (even the state), and replace their role with cryptography and technology. It was supposed to give everyone privacy, souvereignty, and protection against tyranny and theft and inflation. Looking back at over 15 years of cryptocurrencies, nothing tangible has been achieved. Nobody can use souvereign money to buy groceries (mostly due to regulations). But even outside of the currency aspect, web3 still relies on DNS and cloud providers to host websites and content. Blockchains are still unusably slow and complicated to use, and their only use so far has been gambling/speculation and money laundering (NFTs). Blockchains were supposed to be eternal systems with simple rules, yet they never finish development, constantly bloating themselves and even breaking running systems with hard forks (for example Ethereum). No web3 solution was yet able to provide a replacement for web2 hosting. Even TOR with all its faults is better and more user friendly for hosting actual web services than anything the web3 has produced. It lets you provide your own infrastructure, host your stuff from wherever you want, without having to pay fees and without having to rent servers somewhere.

And looking at the wider blockchain community itself, it is disappointing that everyone is just focused on the next thing to gamble on or to launder funds with. Where did everyone who was enthusiastic about the technology 10 years ago go? People want an AI or even a tiktok clone on the blockchain. Decentralised brainrot, wow. What about striving for the creation of technology that actually provides actual tangible value to people? Tools that let you host your own website without requiring Frankenstein-abomination legacy protocols such as HTTPS and DNS, a web standard that actually respects your privacy and doesn’t let documents execute telemetry code that fingerprints you? Tools and protocols that let you host your own email without requiring a static IP for rDNS lookup? Tools that don’t cost money for every little click you do, and not requiring KYC verification for everything you do? And while the IC hides the cost from users by making the developers / deployers pay, it simply raises the bar for developers to go into production. Even in a system of volunteers, even if that system does not involve money at all, it forcibly introduces the need to be “profitable”. Torrents don’t have that. TOR doesn’t have that. And the only solution is either to beg for donations, to pay for everything the users do out of your pocket, or to make users KYC/AML themselves and pay for every button they click.

I think blockchains lost. Sure, the legal side lost years ago, but the ideology was also completely lost along the way, somewhere between cum rockets and poop coins, bored monkeys on a boat and omnipresent “AI”. I don’t see any hope for a resurgence of the old dream, or of any progress towards that vision. If 15 years, strong hype, and billions of dollars didn’t do it, nothing will. The community failed, the foundations failed.

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If you think the government is not inherently malicious, what is your reason for working in the cryptocurrency space? Cryptocurrencies were literally invented out of spite for banks and the government, in an attempt to abolish them. The people who invented it identified the government as a malicious force that everyone needs to be protected from, using anonymity/pseudonymity, privacy and trustworthy money and decentralisation of infrastructure without a single point of failure.

This is literally the mission statement for crypto.

Bitcoin was castrated by KYC/AML regulations and the concept of “tainted” bitcoins. And it’s all because you need to cash out of bitcoin before you can buy something useful with it. Which is because the regulations make it exceedingly difficult for a business to accept bitcoins as payments. And if you receive tainted bitcoins and merge them into your balances, you’re done for. I’d say that was pretty effective.

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You say, ‘you to have pre-funded accounts to do anything on the chain’.
ICP uses a reverse gas model.

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I would argue the OPPOSITE of this entire thread! FIAT and corrupt bankers have a flawed endgame as does the FED and the current irresponsible fiscal policies of politicians and governments across our world esp. the US government! Bitcoin just happened to be released during this chaos and many wealthy, smart, and fed up people of this world are adopting it for good reason the biggest being the devaluation of their life’s work and savings and wealth (the most horrible taxation of all). No government, no central bankers, no politicians, no authorities can ultimately stop the will of the people. They can try to slow it down but ultimately all to their own demise and detriment. The future is coming and the true power in this world is with the people and what they want. Majority will rule in the end and not the minority. ICP will have its rightful place because Bitcoin will need ICP to survive imo. Energy ineffient mining is not sustainable and ICP has a much greener, cheaper alternative with POUW. If anything XMR will go the way of Bitcoin Private.

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we need more optimists around here.

Thanks for sharing @jokerswild

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Thank you. If we’re not optimistic that we can change the status quo and this world, then we might as well all give up right now but we really don’t have a choice imo because if we don’t all get our acts together quickly here, we will all be in trouble soon enough.

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Correct, and that’s why I addressed the the IC-specific circumstances here, too:

We can do a lot, but all the energy of crypto has been diverted into useless distractions. Everyone still uses the web2 silos for communications and content. And FIAT for buying things. I’m not advocating defeatism; rather, I advocate for a return to the initial vision. If we allow the discourse and goalposts to constantly get shifted more and more away from the initial vision, then no matter how optimistic and vigorous we are, we will miss the mark. The threat of crypto has been defused via infiltration and diversion. And nobody talks about it or seems to notice. And when you do talk about it, people think you’re a defeatist. My resignation is because I don’t see anyone caring about the initial vision or recognising its departure, not because there is anything inherently stopping us, other than that.

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Well there’s a cost to starting any business and esp. a cost for web hosting and bandwidth for all businesses. Why is the IC any different? You don’t get to host any website for “FREE” even on web2 correct? Why should web3 be any different and I think the cost is quite reasonable isn’t it?

If we didn’t have some possibly bad actors causing the cycle cost increase, most development teams could easily budget the IC costs into their project.

For individual devs there was also a faucet setup to aid in early development.

Yes, there has to be a reason to move to web3 tech. #1 reason is utilizing crypto as a form of payment in order to cut out the middlemen esp. for merchants who are being fleeced with transaction fees on every order as well as chargeback fees from banks among other fees. And to use smart contracts as a form of escrow esp. with AI.

The IC has the greatest potential to disrupt with the right set of use cases actually realized and the right development teams producing must-have web3 dapps that people simply cannot live without once they are produced. That is definitely what we need to finally bring crypto to the masses here. The fact is that hardly anyone is actually using crypto or web3 daily in their lives or is even aware of what it can do to improve their lives.

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That’s true for businesses. But are torrents a business? Or is TOR or I2P a business? As soon as you want to access smart contract functionality or a public ledger, you are currently forced to somehow monetise it. If your project is to be decentralised without a clear owner (for example for legal reasons) or without any intended revenue, then to use the blockchain for it, someone still would have to pay for every single interaction with that project. This is true for hosting, too. As long as you have an internet-connected device, it should not cost anything additional beyond electricity and your internet fees to host something. There are protocols that let you decentrally host static content (DHTs), and there are protocols that let your machine be reachable without DNS (onion sites, etc.). But to my knowledge, these solutions are entirely distinct and do not natively combine. And on top of that, there is nothing so far that I know of, that integrates these with cryptocurrencies. And there is nothing that lets you host dynamic content (as in, changing payloads) decentrally or in a distributed manner without relying on CDNs and DNS etc. for load balancing, and especially not in a manner that allows volunteers to contribute bandwidth and storage to your site. Such a solution would not cost anyone money to interact with it, and the only costs it would have would be the electricity and internet fees of the volunteers. The creator of the content would not need to pay for a domain, and would not need to have a high-bandwidth or highly replicated/available server setup, as long as people deem it worthy to donate their storage and bandwidth.

If someone had built this, we would have an internet that can compete with professional hosting in scalability and availability, without anyone in particular being forced to pay any artificial fees. And if such a tech stack was natively cryptocurrency-aware, that would fulfill what I would recognise as web3. A money-aware decentralised internet, not a monetised internet. The web2 is monetised, because its protocols demand that a single entity takes care of the hosting for each site. But if volunteers who value the project could simply contribute half of their available spare bandwidth, the cost for the maintainer/creator of a site would basically have 0 running costs and no barrier to entry besides an internet-connected device. That would actually make the web3 objectively better than the web2.

You’d get freely scalable, no-entry-barrier, decentralised, volunteer-based hosting (just like how bitcoin or torrents are also operated by volunteers), without any forced monetisation, but with cryptocurrency-awareness at the protocol levels. And this can be extended further to build social media or content library protocols.

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I had a long response to your Utopian I2P TOR solution for a new internet but it’s just that: Unrealistic.

To bash ICP’s new way of thinking with reverse gas is very short-sighted.

No matter how you feel about it, nothing is FREE. There is a cost to everything esp. our internet, internet access, electricity, cooling, hardware, routing, people, etc.

Also, business is what drives adoption. What would our current web2 be if business didn’t adopt it? We would all still be using GOPHER maybe? (LOL)

This is the trajectory of I2P/TOR. Have fun with it.

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I’m not in this thread to bash the IC. I just saw the thread and thought the general criticism of the blockchain space in the OP was very refreshing. If you look at the OP, most of the criticism is not against the IC. He only noted that the IC being tightly coupled to a foundation and run by known node operators makes it an easy target for state-level actors, compared to stuff like bitcoin.

Yes, the IC reverse gas model is great for UX, compared to all the other chains. Maybe I’m just not generous enough with compliments. But I think even the IC gas model falls short of the ideal, as it still introduces monetisation at a fundamental level. Imagine if I could solve a proof of work of some difficulty, and when attached to a transaction, that would translate into an equivalent of IC cycles for that transaction. And the cycles gained per PoW difficulty would be dependent on current system load. That would give me the ability to use the IC completely free of charge, without incurring costs for the canister, without owning any tokens, without anyone having to go through a KYC. And it would solve the fundamental underlying problem (prioritisation of transactions) just the same.

This model could be combined with the monetary transaction fees, so that users and developers could have a choice in that matter. Fees are not fundamentally required to run a blockchain. What is required is a mechanism to prioritise and weed out transactions. Nothing fundamentally requires transactions to be a monetary auction. On the IC, you get

Yes, nothing is free. And nothing should be free. But not everything that has some cost (labour, electricity, computation, bandwidth) needs to be forcibly monetised. Public goods and infrastructure are maintained through labour and resources, not money. Yes, that labour can be paid with money, but it can also be entirely voluntary. By forcing the monetary model, and restricting who is eligible for performing that labour, volunteers without money to spare, but with bandwidth, storage, or computation to spare, will be unable to contribute. Unused bandwidth especially is free, as you pay for a fixed bandwidth, regardless of how much you use. And unused disk storage is also free, as you already paid for your storage device and if you don’t 100% utilise its capacity, you wasted money, essentially.

There is a huge difference between having to pay miniscule amounts of money, and not having to pay any money at all. As soon as cryptocurrencies are involved, you need to KYC at an exchange. And this inconvenience (for a working adult) becomes a huge hurdle to kids and teens, making it impossible to develop or operate decentralised services on their own, unless their parents give them control over digital money. Even if they have all the labour, spare resources, spare bandwidth, etc. that are technically required for the task, at their disposal. Simply because they got gatekept via a forced monetisation scheme. At least I didn’t have free control over my money until I was legally an adult, I don’t know how they raise kids nowadays, though.

Unrealistic? It is at least technologically feasible, because it doesn’t involve magic. Whether it would gain adoption? Probably not, because there is no pump and dump money to be made from it, and people fundamentally don’t care that much about good tech, or principles. And the cloud is also convenient to use, and the latency and bandwidth of geo-distributed web2 hosting is hard to match. Which is why everyone is using web2 silos for everything, and getting surveilled and datamined in return for convenience. It would require users and developers to make an informed choice for that technology, and trade off convenience and web2 latency for intangible social benefits. And it would probably be incompatible with lots of mainstream tech.

P.S. But I guess in the end, it depends on what kind of person you are. I’m not motivated by or interested in business use cases that can be disrupted. I’m interested in being able to do things I personally want to do, in the most agreeable way possible. Which means I want to provide my own infrastructure, or contribute infrastructure / labour to others whom I want to support.

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The latency will continue to improve as DFINITY iterates on the technology and also as hardware and connectivity improve for everyone.

Web3 and fully-on-chain has its use cases such as inherent security and a much simpler IT stack (no databases, orthogonal persistence, no need for anti-virus or firewalls, etc, etc.) as you must already know. Therefore imo it is only a matter of time. Not IF, but WHEN businesses esp. large enterprises and governments and militaries, etc. decide that they have had enough with hackers and b.s. on web2 and when people decide they’ve had enough being tracked or relying on monopolies running our net.

ICP may have been too early but one day it’ll be TOO LATE for businesses who don’t adopt the future internet of value and end up with huge losses and/or missing the boat just like businesses who did not adopt our current net and were taken out of business for those who did.

Web3 and ICP is coming whether you agree with it or not. This project has the greatest potential for success as long as DFINITY keeps going and does not give up or allow bad actors and selfish people to interrupt their work. They are on the correct track. 10000% imo.

Thank you for your input and to each their own but DFINITY is on the path much further than anyone else in crypto in my opinion and I am fully behind this project till the very end.

DFINITY’s endgame is not flawed. Your analysis is.

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Yes, building stuff on the IC is great for businesses, and reduces the attack surface by a lot, even compared to trying to host your own web2 stuff in the cloud. But to me, the more interesting part of web3 is the hobbyist/enthusiast or dissident use of technology. Something that costs nothing but your own labour, and only involves money when absolutely necessary. The origins of cryptocurrencies and the cypherpunk movement were heavily focused on dissident technology, and cryptocurrencies are just one aspect of it. The IC is not suited for dissidents, or those who don’t want to pay any money when they could instead put in effort. Which is admittedly a tiny minority, and from these people, not much money is to be made. Someone who’s not persecuted or got nothing to hide, doesn’t have a problem with KYC and traceable funds and interactions, and to those people, paying fees is not a big deal. But all over the world, there are people who get persecuted for opinions they hold, criticising tyrannical regimes etc. To them, web3 is only useful if it is anonymous or at least pseudonymous, and untraceable, both communications-wise and money-wise. If interacting with the web3 necessarily costs money (KYC) for either the one who creates something, or the user, then you can’t have dissident-to-dissident interactions on the web3. Or at least it becomes much more complicated compared to if it didn’t have that forced monetisation at a protocol level.

The OP was also arguing from a dissident perspective, and assuming that state-level actors would try to curb dissident use of the IC. And yes, dissident use is the same as criminal use, since dissidents are persecuted by the state for their speech. The problem is that some states will classify things we deem as morally upright in the same category as heinous things, so it becomes a fundamental decision of whether we want to allow dissident use, but at the same time tolerate legitimately criminal use of the web3, or prevent both. You can’t have one but not the other.

P.S.: the concern raised by the OP is valid: do you want to rule out that a government can request stuff to be taken down from the IC if it doesn’t agree with what’s on there (think of North Korea or China for example), or is the IC a free haven where anything goes? Does the web3 fundamentally protect these people, or do they have to build their own version of web3 tech that does not force them to buy cryptocurrencies through an exchange to run things that in themselves do not involve money?