A slew of startups is trying to decentralise the online world

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TIM BERNERS-LEE ends “Weaving the Web”, a book written in the late 1990s, on an optimistic note: “The experience of seeing the web take off by the grassroots effort of thousands gives me tremendous hope that…we can collectively make our world what we want.” Nearly two decades later the inventor of the web no longer sounds as cheerful. “The problem is the dominance of one search engine, one big social network, one Twitter for micro-blogging,” he declared on June 7th at a conference in San Francisco.

Mr Berners-Lee’s observation that the internet has become heavily centralised is not new, yet in recent months warnings such as his have grown louder. Pundits estimate that Google’s many sites attract an estimated 40% of all traffic on the web. Facebook’s apps are similarly dominant on smartphones. Together these two firms will soon rake in two-thirds of all online-advertising revenues. The takeover of LinkedIn, a social network for professionals, by Microsoft, a software and cloud-computing giant, will only reinforce such worries.

In recent years, other “control points” have emerged, according to Yochai Benkler of Harvard University. Smartphones, which now generate more than half of online traffic, are not as open a platform as the internet: access to the two dominant mobile operating systems, Android and iOS, is regulated by Google and Apple, respectively. Cloud computing, too, is a centralised affair, with Amazon leading the pack, followed by Microsoft and Google. These same companies, as well as Facebook, are in control of ever-growing piles of personal and other data. Such information may ultimately allow these online giants “to predict, shape and ‘nudge’ the behaviours of hundreds of millions of people,” notes Mr Benkler in a recent paper.

Now a new band of entrepreneurs and venture-capital firms is emerging with a mission to “re-decentralise” the internet. This is not the first time that new technology has pushed against the centralising forces of the internet. In the early 2000s “peer-to-peer” services such as Napster and Kazaa, for instance, allowed users to share music files rather than download them from a central server. But lawsuits from record labels and, in some cases, a failure to find ways to profit from these services meant these technologies ended up being limited to a few services, such as Skype, which offers free internet calling.

If decentralisation is now making a comeback, it is largely because of the rise of bitcoin, a crypto-currency, and its underlying technology, the blockchain. This is a globally distributed database, which is maintained not by a single actor, such as a bank, but collaboratively by many.

Bitcoin and the blockchain have “shown what is possible,” says Juan Benet, who invented the InterPlanetary File System, one of a number of efforts to build an infrastructure for a more decentralised internet. IFPS eliminates the need for websites to have a central server; instead, files are stored all over the web. BigchainDB, another such project, is developing a globally distributed database, which is faster and bigger than the blockchain (although it also makes use of it). And Storj offers a form of collaborative cloud storage: data are spread over the computers that have signed up to the service.

Distributed applications are cropping up, too. Blockstack Labs’ offering, called Onename, which is also based on the blockchain, allows users to register their online identity; the idea is that they do not have to rely on log-ins provided by Facebook or Google. IndieWeb allows people to maintain information they want to share with the world without using centralised social networks. OpenBazaar is a collection of independent online shops.

Such services are likely to multiply. One reason is that investors are showing interest. BlueYard, a venture-capital firm, recently invited other venture capitalists and entrepreneurs to a conference in Berlin. “We used to spend a lot of time investing in firms with network effects,” explained Brad Burnham of Union Square Ventures, referring to the mechanics of online markets, which allow successful firms to become dominant. “Now we are spending a lot of time figuring out how we could undo those effects.” His firm has invested in both Blockstack Labs and OpenBazaar, in the hope that they will curb the momentum of Facebook and Amazon.

The second is that the technology to build decentralised applications, which is still in its infancy, will get better. For instance, bitcoin’s blockchain is no longer the only game in town. It now competes with Ethereum, a similar system that offers more scope for developers to write applications. They can, for instance, design “smart contracts”, business rules encoded in programs that execute themselves automatically: funds are transferred, for example, only if the majority of owners have digitally signed off a transaction. Consensys, a firm that designs such contracts, has used them to create a local marketplace for renewable energy in Brooklyn without the need for a central utility.

Whether these new businesses will take the world by storm is unclear. A big hurdle—which previous efforts at decentralised technology failed to clear—is to be as convenient and seductive as centralised incumbents. Regulators are likely to mount resistance against projects that transcend national jurisdictions. Initiatives such as the DAO, a novel investment vehicle that lets its shareholders vote on how to spend their money, is not based in any country—not even a tax haven—but on Ethereum’s blockchain.

Then there is the question of how decentralised services will earn their keep. Most are based on open-source software, which anybody can use without charge, so startups will have to make money with add-on services, such as updates, maintenance and subscriptions. More fundamentally, an internet that eschews control points may be one that affords firms less opportunity to build profits. To create a return that makes venture capitalists happy, the new tech firms will almost certainly come under pressure to get ever bigger. Decentralisation might fit the vision of the web’s founding father, but the internet became centralised for a reason.



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