On Cryptonetworks versus Federated Hubs and P2P — a taxonomy.
Decentralized networks typically follow one of three network architectures:
- P2P.
- Federated hubs.
- Cryptonetwork - cryptoeconomic incentives + P2P.
- Bitcoin, Ethereum, blockchains.
- The Graph.
- Filecoin, Arweave.
1 BitTorrent pioneered tit-for-tat, arguably the first P2P network with an economic model. It stands out from the rest.
Comparing the architectures:
| Strengths | Weaknesses | Challenges | |
|---|---|---|---|
| P2P ”run your own node” |
- capture-resistant - robust decentralization - all nodes have same influence, no power law dominance |
- unreliable performance run your own node: - unsuitable for mobile (battery) - always online is difficult |
|
| Federated Hubs | - performant - better security - easier upgrades |
- susceptible to capture, censor - owner is liable - owner pays cost for users |
- network of fiefdoms - cross-hub bridging (cracks begin to show) - scalability (Farcaster is doing some great work with CRDT’s here) |
| Cryptonetworks | - capture-resistant - performant - zero liability - better security (commercial incentive) |
- upgrades require coordination | - decentralization (e.g. AWS problem) |
Where federations fail.
Some examples:
- Email. It is practically impossible to run your own SMTP server nowadays. Every major email provider (Gmail, Microsoft, Yahoo) needs to curtail spam, and it is a system of behind-the-scenes agreements to get your email server accepted into this trusted network (read: your emails to regular people don’t go to spam).
Why cryptonetworks over hub models?
A cryptonetwork is a decentralized architecture which is capture-resistant, with more reliability than pure P2P due to money-at-stake, without the complexity and resource requirements of running your own node.
A good heuristic for technological progress is how much complexity is abstracted away. For example, building a web app doesn’t involve allocating and freeing memory, that’s abstracted away by the JavaScript VM. Likewise, when we think of the future of building capture-resistant social apps, will devs be building their own database networks and indexers?
Why cryptonetworks over hub models?
- It’s autonomous and on-demand.
- An AI could command our services programmatically. Payment for services occurs solely through smart contracts.
- Unlike BitTorrent/GunDB, no need to run your own node.
- Unlike Federated model (Farcaster, Matrix), the network is P2P. Each node has roughly the same influence, there is no power law dominance.
- Service level guarantees - queries per second, liveness.