A Case for Cryptoeconomics? Incentivized Content Delivery Networks

April 08, 2018

Crypto-economics or “reverse game theory” is a fascinating field of discussion in the decentralized and crypto world. Summed up by Ryan Zurrer of Polychain Capital as,

”… the emerging field of study of how we use digital incentives to drive specific resources and behaviors on decentralized networks that lead to some globally desired result such as security or network effects.” - CoinDesk Article

The general influence that cryptocurrency can have on existing protocols in the internet and beyond is impressive and potentially underestimated. As the internet has evolved today, it has been a case of a “free ride” for using the rails of more altruistic non proprietary internet protocols such as as E-Mail, VPNs, Peer To Peer file sharing, etc.

While the free ride is often great, in that we receive new services without a cost, the second and third degree effects that emerge from this can be massive. For example, with the case of VPNs,you have the issue of centralized censorship risk. In the case of E-mail protocols, we now have massive network risk for monopolies such as GMail and Outlook. Even last year we received a small taste of the panic when our beloved services have gone down. Furthermore, for the case of the git software version control system, it’s been observed how DDOS attacks are growing and targeting more infrastructure centered companies like GitHub, recently absorbing a 1.3 Tb/s attack. One can only guess, that these attacks will increase in size, and the risk of centralization in organizations such as Akami grows with each year.

It should be noted that the general theme of all of these cases is monopoly on a protocol creating centralization risk. However, I don’t want it to be misunderstood, as the capitalization and centralization of such protocols is not uncommon or necessarily an absolute evil. There is an undeniable benefit of economies of scale and efficiency gains through coordinating all activities under a single house. However, the general process of centralization, always yields risk of blow up for the system. The cat and mouse game of centralization and decentralization is cyclic as it gets. For a more dystopian (but funny) view of how a coordinated attack on core computing infrastructure of the world could could impact us: Youtube: Apple WWDC 2017

However, observing the developments in the world of cryptocurrency, new systems such as the Orchid Protocol, demonstrate the potential influence of applying crypto-economic incentives and market forces to a system in order to prompt better and more secure service. The application of low barrier, open and competitive economic cryptoincentives on top of an existing centralized service generates a decentralized marketplace and “commodification” of the service being rendered. This creates so called “cryptocommodities”.


For example, the ability to buy and sell blocks of access (in minutes, months, days, megabytes) to a service such as Orchid’s VPN, in the decentralized market place. We’ve actually seen the application of this framework on different systems like Balaji Srinivasan’s Earn.com. The metaphorical “tollbooth” to high profile e-mails, prompts earnest and valuable email delivery for both parties, and continues to expand into other forms of communication like newsletter sign ups. This is a fairly on trend idea considering the growing competition for attention and noise in the marketplace. As the old adage goes, “all the money is in the lists”, and an e-mail address is the key channel to your customer. Why then, can cryptocurrencies not compete with existing incentives like ebooks, or discount codes? (Wiki: Attention Economy)


While the general commodification of constructs and services is fascinating, it is interesting to consider the application of such ideas to the world of Content Delivery Networks and DDOS mitigation. Perhaps someone will invent a network or system which incentivizes users to host hard drive space in geographic proximity to web requests, and act as “micro servers” creating decentralized cloud cluster. Furthermore, this could be interesting competitive integrations for the ideas like FileCoin. For example, the choice of renting drive space for content delivery vs. permanent storage. A speculative guess would be a potential set of new developments in storage technology as an unintended consequence (~ see Innovation Plane). Finally, the interesting point could occur in the ability for a decentralized network of consumer computers to be incentivized to absorb DDOS traffic. Perhaps a “pay on interruption” service where consumers can subscribe and yield their devices open to absorbing traffic. Sure they slow down momentarily, but they are paid an incentive for handling the occasional traffic load. It would be particularly funny if such devices were inflicted with malware and looping their malicious requests back at themselves.