Camila Russo: Ethereum is building the Internet of Value

The internet is about to enter a new phase, where entrenched rulers are dethroned, more power is claimed by individuals, and value moves as freely as cat GIFs.

To understand why we need a better internet in the first place, consider this question: Isn’t it weird that the internet isn’t good with money? Think about it. The applications we use every day to search, to communicate, even to make purchases; companies that dominate the web are bad at dealing with money, even if they are very good at it. There is a separate checkout process, where you repeatedly enter all your information. Cards issued in some countries do not work on local websites in other countries. Sometimes you wait what feels like an eternity watching that little wheel spin, before the transaction fails.

More complex transactions are almost unthinkable. Influencers and creators should be able to monetize their likes, retweets and views, with micropayments streamed from followers, without any platform being cut. Lesser known mortals should be paid if they choose to view ads or consent to their information being shared. The transfer of ownership of valuable assets, from art to real estate, shouldn’t require several intermediaries and tons of paperwork.

There is the Internet’s TCP / IP protocol. There are apps built on top of it. And, separately, there is the financial system, which relies largely on infrastructure built before the internet was invented. SWIFT, IBAN, the binaries that handle most international money transfers, were not designed to handle real money. They are messaging systems where transfers can take up to five days and cost around $ 50. Domestic money transfers are a little better, but in the US they still require at least one business day to settle (money rests on weekends , apparently).

Attempts to upgrade these systems – SEPA in Europe, faster payment initiatives in the US, VisaNet for card payments – have produced a messy mosaic that doesn’t solve the main problem. The fintechs try to improve the situation, but they are building on the same old carcass.

At a time when we have global, cheap and fast communications, we should have an equally global, cheap and fast financial system.

The second big problem with the Internet today is that we access it through a handful of companies with “walled gardens”. A better analogy is the realms. You need a passport to enter. Once inside, it feels like roaming freely, but the price to pay is that the king watches your every step, collects your information, and then sells it to fill his coffers. You don’t get a cut, but you do get the amazing services the web offers today.

These kingdoms – Google, Facebook, Amazon, Apple – aren’t always clear about what they’re collecting. We are also left in the dark about what our data will be used for. Is it purely market research or will it be used, for example, to influence the US presidential election?

See also: Camila Russo – Five years later, Ethereum is truly the ‘Minecraft of crypto-finance’

Furthermore, no one is free to build on these lands. Developers must follow specific guidelines and go through an approval process that can take days, knowing that the rules can change without notice and their app request can be denied. Live apps aren’t off the hook either because they can be banned.

Like any for-profit company, the goal of platforms is to extract as much value as possible from as many users as possible. They are incentivized to trample or buy anything that comes close to threatening their hold, stifling innovation and competition in what should be the most dynamic industry. The result? We’re getting products and services that are probably not as good as they should be.

The internet is governed by innovation-stifling monopolies that have prevented us from having a valuable internet. Organizations built on the current Internet network have almost no choice but to become for-profit, proprietary code companies closed to the public. But when the network itself is designed to transfer value, it allows for the emergence of different business models.

In this new frontier, users remain in control of their funds and personal information. They roam freely without bowing to any king. Value – money, goods, stocks, property – is native to internet apps like cat videos. And it is already happening.

This is not “encryption”. It’s not about the next bitcoin or entering the next hot token it will pump.

This is a change in the very foundations of the web.

There is a layer of money that is added on top. A distributed network that transfers value without relying on banks, settlement and clearing agents. Money moves faster, cheaper, and globally, just like the rest of the internet does.

And this network isn’t just good at transferring value. It can also process anything a computer can, allowing developers to build applications on top of it. The difference from the Internet apps we are used to is that in these applications the value is not an afterthought; is in the center. The name of this new base layer for value is Ethereum.

Payments can be made smoothly, and that’s just the beginning. More complex financial services are now within reach of anyone with access to the network. Users can trade tokens with just a few taps, and because the value can be programmed, this can range from the network’s native token ether, to synthetic representations of anything from gold to Tesla stock. It can even symbolize San Francisco’s “poop index,” where people can profit from the city’s growing number of faecal sightings.

Venezuelans can buy tokens linked to the value of the dollar. And not only that, they can deposit them in loan protocols and earn interest on those tokens. Speculators can borrow from those asset pools for trade. Others may have a computer program automatically execute a trading strategy, like a steroid robo advisor. There is a lossless raffle, streaming salaries almost per second, tokenization and limited edition shirt swapping, which are delivered in their physical versions and can be worn in virtual reality worlds as well.

For developers, financial applications are the small-scale fruit of building on a valuable network, but that’s just the beginning.

A key feature of this network and the applications built on top is that the code is available for anyone to inspect, track, and modify it. It means that builders can settle anywhere without fear of unpredictable rulers. The base level itself, the Ethereum blockchain, is owned by a community of millions of people who cannot unilaterally change the rules, ban or censor apps or individuals.

The fact that the code is open makes it more difficult for companies to create monopolies. If users don’t like the rules, they can now choose to take the open code and make a copy of the application.

The ability for these open organizations to have their own associated token, a share-like digital currency, makes open source business models sustainable.

See also: Camila Russo – Sale of the Century: The Inside Story of Ethereum’s 2014 Premine

It enables developers and entrepreneurs to build quality products and services outside the confines of traditional for-profit corporations. Users and protocol creators hold the native token, which gives them ownership of the protocol and rights to participate in governance. As the protocol gains traction and usage increases, token holders benefit. This allows for a world where the platforms we use don’t compete with their integrations but work with them. It’s a way to change the zero-sum paradigm to a win-win.

All of this is still very experimental. It is risky and often breaks down. Financial applications on Ethereum currently hold $ 11 billion, a small amount by global financial market standards. But it’s nothing and it’s growing and becoming safer, more resilient by the day.

Ethereum itself, where much of this activity takes place, is only five years old. Maybe it’s the Ethereum platform that brings this new internet to the masses, or maybe it’s another similar network.

But there is no doubt that the internet of value is coming to shake traditional finance and the web today, for the simple reason that it is many times better. This is why shaggy young developers who work from their laptops and flock to hackathons around the world have kicked the old game board and started over.