BTT: Tokenized and Decentralized File Sharing

Do you remember back in the 2000’s there was a file sharing program called Napster? Actually it was for music but it allowed us to share files of different types, from movies to images. It was the start of mainstream peer-to-peer or P2P file sharing, allowing anyone to share files and download them as well. Basically, everyone who has Napster installed connected to a centralized location where the communication is established with the network. Napster’s server’s then control the data that allows users to share their files. It did not last however, it was shut down by the government because of complaints of copyright violations and the risk of sharing of intellectual property protected information. This would be a stab at file sharing on the Internet, but it would be replaced by something else.

That something else would allow users to continue to share files but without a central server like Napster. It would be decentralized, but also direct P2P using a different protocol. The protocol has become synonymous with the name of the application itself, BitTorrent. It is the most commonly used file sharing application on the Internet and it was purchased by the cryptocurrency project called the Tron Foundation. It now delivers a tokenized decentralized file sharing network that runs on the BTT token. So it seems that file sharing and cryptocurrency is a match.

The principles of the BitTorrent network is based on a “Tit-for-Tat” algorithm. That means that to download files or to “leech”, you must also contribute files to the network or “seed”. Therefore, it is an ecosystem of “leechers” (downloaders) and “seeders” (uploaders). This is to make sure that there is fairness in the amount of contribution made to the network from all users. The network also becomes faster with more “peers” aka computers or users. Another feature users get on BitTorrent’s network is anonymity. In no manner is a user required to provide their ID or personal information for other users. There is more privacy in using BitTorrent than let’s say Google Drive when it comes to sharing files. With Google Drive, the owner of the shared file can be tracked to their Google account and g-mail which has an identity often attached to it. In order to understand the concept of BitTorrent, we must take a look at how their network functions.

When a file is uploaded to the network, it is not stored in one place. It is actually broken into fragments called “pieces” and identified by their cryptographic hash. The pieces are stored across the network on different computers. A cryptographic hash function is used to verify the authenticity of the pieces for security purposes as well. That means that no one can just tamper with the pieces, they are protected with cryptographic technology. Pieces of files are then distributed across the network and as more seeders join, the faster and more reliable the network becomes. BitTorrent also does not let the user download the file immediately. It must go through a process first which involves having the torrent file to point users to the location of other peers who have the pieces to the file.

A torrent file is accessed by users when they want to download a file. The BitTorrent client gets a list of file locations for torrents that users download. The communications protocol is beyond explaining in this article, but in simpler terms it allows information to propagate across the network. The torrent file does not actually contain the content. It just contains information about the location of the file’s pieces which the user’s client will download from. The content’s pieces can be downloaded as .torrent files. Once the pieces have been downloaded, the client then puts the pieces together to reconstruct the content. Thus downloading a large movie file becomes more efficient and reliable by breaking it into pieces rather than one large file. This is because when the connection times out, you don’t have to download everything again if you already have pieces of the file.

BitTorrent has been controversial because of the way it circumvents the law regarding file sharing. Music companies are against the sharing of music on various platforms unless there is paid royalty to the musician and recording studio. Copyright laws also protect intellectual property as well as published content. BitTorrent makes pirated movies easier to share and there is a market for leaked Hollywood films that make use of P2P technology. It also allows the sharing of games, music, software and photos. Just about anything digital can be shared using BitTorrent’s network. There is not much the government can do however because of the decentralized nature of BitTorrent. Another complaint comes from users who were infected by malware since some files can be disguised to appear legit, but the truth is as a leecher you have no right to make a claim since you are using the software somewhat at your own risk. Despite these claims of piracy, patent infringement, viruses/malware and illegal file sharing, BitTorrent was able to continue unlike Napster. Besides its distributed and decentralized nature, BitTorrent is more a software or protocol rather than a company, so that is another issue for the legal sector.

The slippery slope is that in some jurisdictions, or nations, what is legal may not be legal and vice versa. BitTorrent gets around this argument since the peers are decentralized and BitTorrent itself is not the one providing the data. Through the years since it started in 2001, BitTorrent has faced lawsuits and has had to meet compliance to regulations on certain occasions. It was too decentralized to stop since there are millions of users worldwide, not just in one country or geographic location. When BitTorrent does comply, it does so by removing links to content which creators requested.

The protocol or software itself is legal, you are not violating the law by having it installed. Other controversy involves BitTorrent trackers, which provide the links to the content that may or may not be copyright protected. In the US alone, there are over 200,000 lawsuits against BitTorrent since 2010. Because of this outrage, it would only be a matter of time before more BitTorrent protocols are blocked by ISPs on the request of regulators and legal departments. If that is the case, then it would not have a good future and will likely thrive more underground rather than finding mainstream use.

This is where Tron steps into the picture. It seems that the BitTorrent network would be an ideal platform to add to the Tron network’s ecosystem and blockchain. To get this started, Tron would issue a token for the BitTorrent network called the BTT coin. What Tron aims to do is use the network as a platform for DApps based on BitTorrent’s decentralized file sharing. Tron can utilize this for its entertainment and media based content sharing platform. BitTorrent would remain distributed and decentralized and with Tron’s vision of censorship resistant, open source and incentivized communities. In a nutshell, the BTT coin allows Tron to tokenize the BitTorrent network. This is in order to connect creators to users and in return get paid in BTT coins for their content. It will actually be more compliant to copyright laws and intellectual property for the platform to remain clear of violations.

The platform sounds good for creators, but the overhaul to the system may not resonate well with users. Instead of a truly decentralized system, it seems Tron’s BTT coin as a token has put more regulation to the platform. Users of BitTorrent do not have to use BTT as a token to get content. Tron is supporting users who want to continue using the software like before. They will not be able to collect BTT coins though, so there are incentives to using the tokens. The incentive here is to keep users to continue sharing on the network, only this time around they will get rewarded for it. Seeders will tremendously benefit from this ecosystem because the more files they upload for sharing, the more BTT coins they can get. The BTT coin as a token can also be exchanged for goods and services on the platform besides just converting into fiat currency.

The benefits it seems are still yet to be explored for the new BitTorrent and BTT. The vision of a truly decentralized file sharing network continues, only this time there will be rewards for everyone. It encourages more file sharing and that way the availability of content can become sustainable (that’s the idea in theory). What remains to be seen are the legality of the content and whether the Tron Foundation will work closely with regulators to make sure that content is not being illegally shared by users unless there is consent from or incentives for the creators as well.

Your Basic Attention, Please … The BAT Token

The Internet is one big advertisement platform led by Facebook and Google. Brands want to get your attention while social media wants to increase your engagement. This is how users are targeted for advertising. In the process, while a user is engaged, their data is collected for analytics. This is not exactly with your full consent, but nonetheless the data you are providing makes you a product to marketers so they can sell you their products much better.

It has become a market for more and more attention. The problem is that it is becoming dominated by middlemen and other intermediaries. When you view a post that is for targeted advertising, there can be so many layers underneath that gather your data for their intents and purposes. Sometimes bad actors are also involved and this leads to massive fraud. Cambridge Analytica is just one example of using analytics to try to influence users on Facebook. Social media is a more common ground for bad actors to not only gather data but influence users to make decisions to not only buy products but to do things based on their politic and beliefs.

The system is full of “malvertisement” and both affiliated and unaffiliated links that can lead to malware and viruses. Yet there is no service actively protecting users from these dangers. For advertisers and publishers, the middlemen involved can also be costing them money. Ad spends are thus not being used efficiently. The Internet is full of bots that automate clicks, likes and comments, it is becoming more difficult to gain organic engagement. This is when a new platform for digital advertising is needed.

The BAT cryptocurrency token is a solution that addresses the problem with digital advertising and browsing on the Internet. It is an open sourced, decentralized ad exchange platform. It aims to remove the middle man by directly linking advertisers and publishers to the users. It is called the BAT triad or triangle. The BAT platform comes with its own web browser called Brave that comes with an integrated digital wallet for BAT tokens.

The idea behind BAT is to have advertisers and publishers target you directly with your consent to get your attention. In return, the user is incentivized in BAT tokens for engaging the content. This also saves advertisers and publishers money because they are not going through a layer of intermediaries or middlemen. According to the Basic Attention Metrics (BAM) “To improve the efficiency of digital advertising requires a new platform and unit of exchange.” BAT is the token used to connect the marketplace of users with advertisers and publishers. It is based on Ethereum technology so it makes use of smart contracts stored on a blockchain.

According to the white paper “Attention is measured as viewed for content and ads only in the browser’s active tab in real time. The Attention Value for the ad will be calculated based on incremental duration and pixels in view in proportion to relevant content, prior to any direct engagement with the ad.” In return for attention, according to the BAT website “Users viewing ads will be rewarded with BATs. BATs can be used for premium content or services on the BAT platform.“

The BAT metric is based on the following formula:

Where a = 13000, b = 11000 and duration is measured in milliseconds. This is the score that determines how long a publisher gets the attention of the user. This is based on what is called the concave score. The scores reward publishers and advertisers for the user time spent on the website, with diminishing returns for longer views. The minimum threshold is 25 seconds duration for a score of 1. These metrics were determined by the BAT project team, so they are not a standard metric for attention so to speak.

The good thing about BAT is that it provides more privacy to users through a feature called the “Anonymity Shield”. This is unlike what browsers like Chrome are allowing with extensions that collect user data. For advertisers and publishers it minimizes fraud and useless ad spends. They can minimize costs and better use their resources for directed marketing. It also provides better tracking because of the blockchain. With the problems in data privacy becoming a more important issue, the significance for BAT is that this is a good option for those that would require these features.

Predictions Market On The Blockchain

One use case for the blockchain with cryptocurrency is in the predictions market. Speculating the outcome of an event can bring rewards if you either guessed correctly or made an accurate prediction. It is very much a form of online betting, but you are using a decentralized platform that no one can manipulate or control. There are many types of markets for prediction, including social events like elections, sports and even the next American Idol. Bets are made against anyone who counters a prediction. It can be anything as simple as whether it will rain tomorrow or not, to more complex events like electoral results.

Platforms like Augur are allowing anyone to place their bets on any type of event. Augur uses the Ethereum blockchain to implement predictions. What you need is a DApp (Decentralized Application) that runs on top of the blockchain and a valid Ethereum wallet to collect funds in the likelihood you predicted correctly. The DApp is basically a decentralized app which is installed on a mobile device e.g. smartphone. Through this DApp, a user can interact with the platform and place their bet on the blockchain using what is called a Smart Contract.

The Smart Contract is a programmable logic code that executes the conditions you set forth for your prediction. Without going too deep into it, the basic function of the Smart Contract is to honor the prediction a user places on the blockchain. It will be tamper resistant and at the same time transparent so that all can see. It enforces honesty in the betting process where countless people are involved, yet they don’t know each other at all. Sometimes cheating can occur in such settings, so the blockchain is there to enforce trust in a trustless system.

The predictions market platforms on the blockchain were meant to be decentralized. This means that in no way during the whole process are a user’s funds in the custody of the platform. It is always in their control. Decentralized means that no third party mediates between users who have placed a bet or made a prediction on the platform.

For example let’s talk about betting in sports. When using this in a prediction market, a user locks their funds or bets in a Smart Contract which the platform then prepares. Once finalized, the platform will execute code that will make it immutable. Once on the blockchain, it can no longer be changed, something that must be honored in betting systems. Oracles, or external information sources, will update the platform using an API (Application Programming Interface) that keeps the results up to date on the prediction. These sources can include online sports betting websites, news agencies and trading platforms as well. If the prediction for a winning team were correct, then the value is set to “1” which indicates that the Smart Contract will collect the winnings and it can now be deposited to the user’s wallet.

The user can also sell off their winnings in the prediction market in exchange for cryptocurrency or fiat using the Smart Contract. Since it is programmable, the user can specify to the Smart Contract what exactly it should do. The payout goes to the user’s wallet and from there they can exchange it for fiat or send it to another digital wallet. The predictions market is an ideal way to forecast events, hedge against uncertainty and even for settling bets directly without a third party involved.

Bitcoin Pizza Day – May 22

May 22, 2010 was the day software developer Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John’s pizzas.

Call that a waste of money, now that BTC is worth over $8,000?

Not really. Instead buy this man a drink for being the first person to use BTC as a payment. Even though it was pizza worth around $41.00 at that time, it is considered the first truly successful use of BTC. It is a medium of exchange and electronic payment system after all. This proved the use case for it. Now today it is much different of course, because BTC has become many times more valuable with a larger market cap.

Laszlo was no idiot who wasted away his BTC. He is actually one of the original volunteer developers who helped in the early days of Bitcoin. He got rewarded with BTC, and he probably should still have some around. 10,000 BTC today will probably set you for life. In the significance of the moment, what Laszlo did was actually quite bold. He used BTC in a real world situation, even if it was just to buy pizza.

Since then, BTC has had a bad rap from mainstream finance people e.g. Jamie Dimon, Warren Buffet. They associate it as “rat poison” with no instrinsic value used by criminals for illegal transactions i.e. The Silkroad. Then again this argument falls apart when you point out that cash is the most used currency for illegal transactions, which cannot be easily traced while BTC can be traced on the blockchain (transparency). The drug deal on the corner is most likely done with the use of cash rather than BTC. Perhaps Jamie Dimon has come around because he sees the potential for the blockchain rather than Bitcoin itself. Mr. Buffet though, has not, but we are talking about a successful investor in the tradtional finance economy. Today it is a different story with how our economy is transforming digitally.

Today BTC is used more as a store of value, like gold. It can also be used to transfer value across borders, pay for retail items e.g. Overstock accepts BTC and lock into a deposit as a digital asset for loans or future payments. There are new non-mainstream financial instruments that allow holders to use their BTC to make investments into funding projects, donations and even pension funds. More new services will surely come as financial giants enter the cryptocurrency space.

Pizza is great comfort food. When you know you can buy it with cryptocurrency, it just gives a better feeling of what is to come as it evolves. For now if you have 10,000 BTC, HODL it. With that much BTC, you can buy pizza anytime for the rest of your life.

Note: This opinion piece are thoughts about Bitcoin and is not meant to be financial advice. Do your own research always.