The network’s architecture is known as the decentralized web. Network architecture and development, as well as participants
1. Current participants
This article offers an overall outline of the network architecture that is part of the decentralized web or dWeb project as it stands now and how it is changing.
There are currently two kinds of users in decentralized network communications and both of them are called users. Users initiate connections and consume the service, for example. via audio and video interactions.
Outward-only ( OO) user – The connection is temporary switching between on and off, and it is typically outside of home, such as working, mobile via the phone, in a cafe, library. The most notable difference of this type of connection is changing the location and an IP address.
Outward and inward ( O&I) user – the connection is only temporarily turned off or on, and the user’s typically, the location is at home, where the user is able to enable inward communication. In this instance, the physical location as well as the IP remain identical.
For more information on these two kinds, please refer to:
One of the common features among the two kinds of user is their mobilityfor instance, the same user could change between O and I to the OO and back again when moving or changing their location / IP address.
Another characteristic common to two types and users of the network is that it is not permanent. Participation of the network that is decentralized occurs only when the laptop or phone is turned on and the network connection is activated. Participation within the decentralized network will be turned off during the rest of the time.
2. Current connection cases
The following scenarios assume that usr1 and two are online and that the internet connection is active.
The two types of arrows shown in the images: ‘<->’ and ‘->’/'<-‘ illustrate graphically the directions that are a result of two directions (O&I) or one direction (OO).
users 1( O&I) and user2 ( OO)
Benefiting from users1( O&I) as a two-directional user( OO) is able to call user1 at any moment.
But user1 is unable to directly call the user2 who is the only directional caller.
User2 must continue calling user1 to poll them — calling user1 on a regular basis to check user1 to allow user1 to contact user2.
users 1( O&I) and user2 ( O&I)
This is the most ideal case of decentralized network communications since both users are two directions.
In this situation, user2 may call user1 at any moment and user1 is able to call user2 at any moment.
user1(OO) -> <- user2 (OO)
This is the worst example of decentralized network communications.
As a one-directional connection with only one direction outward users 1 and 2 can not establish a connection.
This is, however, the most typical situation for both users.
The use of the internet worldwide is mostly based on the predominant clients-server model. In this model, the servers can communicate in two directions, inward and outward communications and the number of servers is much less than the number of clients.
Nearly all of the users on the Internet are users.
3. Assistance to users who are only outward in introducing new participants
To aid in the most typical case of users having one direction ( OO) we have introduced a brand new 2-directional ( O&I) participant called the bridge.
The location of the device is always fixed, remains the same and is always online and available, as for instance. using a home internet connection. Its main function is to to handle forwarding of packets to several users.
The bridge not only offloads the person who owns it, however it also permits the forwarding of services to many other users.
User1( OO) bridge1( O&I) and user2 ( OO)
The best way for establishing connection between one direction user1 and user2 is the user1 needs to continue polling the two-directional bridge1 in order to allow connection to user2 or other users and user2 is required to continue polling bridge1 to allow the establishment of the connection.
There are incentives for bridge nodes by way of crypto-coin to pay for services.
4. Decentralized Network architecture, and comparing it to blockchain networks
In short, the redesigned Decentralized Network architecture has a mix of:
– O&I participants and O&I Participants
Participants who are permanent and temporary
Participants with fixed and shifting locations
Users (consumers) as well as bridges (network support nodes)
Like blockchain technology as well, the dWeb project is aiming to build an internet of nodes. With blockchains, the process of creating and verifying blocks is a heavy burden to carry on a daily basis for a node in the blockchain and the burden gets heavier as time goes on.
A blockchain network that is successful in its nodes can have hundreds or often many thousands of nodes.
Contrary to blockchain technology, the nodes in the dWeb network are not able to make and verify blocks. The dWeb network that is successful could be able to connect many millions of network nodes.
5. The implementation of bridges nodes
Bridge nodes are currently under development. There are 2 options currently available:
- Bridge for Pi is based on the Raspberry pi3 hardware running the minimal Linux OS. It is not just a forward information, but also save messages and run smart contracts and host personal websites
Android tablet and phone
- Android bridge — available on tablets or phones running Android typically older release or version or release that has been unattended at home
The two versions are designed to be put in the residence of the dWeb bridge owner, and connected to the WiFi at home and powered.
The same bridge software running with the entire bridge but designed to run x86 processors, not the pi3/android ARM processor, might be running on the cloud CPU. Cloud service is offered by a few data-centers located in only a few geographic areas.
Although not as reliable as a cloud CPU , pi3 bridges provide greater geographical coverage.
Furthermore, there is only one hardware expense to purchase the raspberry pi3 device or Android tablet, as opposed to a monthly recurring charge for usage of cloud CPU instances.
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Albert Einstein, when creating the special theory and later his general theory of relativity utilized a lot of thinking experiments. The thought experiment is a metaphor, a way for understanding through analogy. For instance, what happens when we are riding on the beam of light.
This article also uses thought experiments that aim to give the reader an analogy, and to bring clarity during the excitement of an uptrending crypto-market.
It was almost two years ago that I was asked on Quora asking ‘ What is the most risky cryptocurrency.‘ At that time, and even the moment, my answer remains identical — it’s the category of coins that are referred to as stable.
2. Two types of coins that are stable
There is a vast assortment of stable’ coin types I’m able to divide them into two groups:
– created from fiat currency, such as for instance. USDT / Tether , and Circle / USDC — taking fiat USD and then transferring it to the crypto-coin that promises its value is 1 USD
It is derived from a significant crypto coin like DAI which is a method of receiving Ethereum and presenting the crypto-coin that guarantees its value to be 1 USD in accordance with the exchange rate between ETH and USD at the moment of the purchase.
It is important to note that I employ the word ‘promise’. A majority of crypto-traders and crypto-investors have confidence they will receive the rate of peg (the 1:1 exchange rate) is assured.
It’s not, is it? !
3. The good and less than decent stable coins issuers
Following the receipt of fiat currencies and distributing the cryptocurrency trader or investor (fiat-based) solid coins The crypto-exchange, or the “stable” coin issuer could take the fiat received as a profit -that can be spent and consumed.
A reputable exchange or issuer however will treat the money received not as earning, but rather as savings to be returned when requested.
The first is fraud in a coin or exchange issuer. However, let’s take a look at the coins that are stable from an issuer I think is decent — for example, the USDC that is issued by Circle.
Examining the documents offered by Circle this site, we can see a warning that what is thought to be as a promise is really just an assurance:
— — — — — — —
There is no warranty for price stability
In accordance with the restrictions as set out in the User Agreement, (i) when Circle tokenizer U.S. Dollars to USDC the company will perform the transaction at a rate that is 1 U.S. Dollar ($1) per one (1) USDC and (ii) when Circle redeems USDC to U.S. Dollars, they will redeem the USDC at the cost of one U.S. dollar ($1) each (1) USDC, less charges if applicable.
For every USDC which is issued by Circle and continues to circulate, Circle will maintain the equivalent of one U.S. Dollar ($1) along with its banking partners who are in Segregated Accounts on behalf of, and to the benefit of Users. Circle believes that these actions will help to improve the price stabilization of USDC with the intention to have 1 (1) USDC being worth one U.S .Dollar ($1). However, this doesn’t ensure that 1 (1) USDC will always be equal to 1 U.S. dollars ($1). Because of a myriad of variables beyond Circles control USDC’s value USDC specifically on third-party platforms, such as the cryptocurrency exchange platform, could fluctuate between one and the other U.S. Dollar ($1). Circle does not have control over the way third-party platforms determine the value of USDC as well as Circle is not responsible for any loss or other problems that result from changes on the price of USDC.
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4. Alice Bob and Alice Bob — who use fiat-based stablecoins
We are ready for the first experiment in our thinking.
Let’s imagine that Alice or Bob are cryptocurrency traders and the first customers of a cryptocurrency exchange which has its own “stable” currency — USDST. They both deposit $1000 each and then receive $1,000 USDST through the cryptocurrency exchange. Then , they each purchase 1 Bithot coin that at present will be 1 USDST (BTH-USDST = 1000). In the time, Alice as well as Bob both have one BTH each, while the exchange is able to accept $2000 of fiat.ad
In the real world when trading it is possible to have a spare difference between buy-sell prices and the commission for trading. In the interest of the exercise, let’s assume an assumption that since the spread has been set to negligible and the commission is zero and the crypto-exchange is the only one with Alice as well as Bob as clients. Furthermore, let’s suppose that the crypto exchange is holding money in fiat in their bank accounts.
A month after that, the BTH-USDST is 1200 then Alice decides to trade in her one BTH which means that she is given 1200 USDST. She then withdraws the USDST, and converts 1:1 to fiat. She receives $1200 on her bank account.
After a week, when Alice has sold, the BTH-USDST is changed to 1300. Feeling happy and feeling that he has outwit Alice He sells his one BTH and receives 1300 USDST. He then makes a withdrawal in order to receive the currency.
But, at the moment of the withdrawal of Alice the exchange, it has a balance of $1000-$12000, which is 800 dollars in fiat currency. What will the crypto-exchange do to respond to Bob’s request?
The crypto-exchange is unable to be a fiat-based currency issuer. It’s a central bank that is able to print (print) money in fiat and it guards with utmost care this privilege.
The cryptocurrency exchange has two choices: choose to declare bankruptcy or then pay Bob $1300 via the bankruptcy process, or change 1:1 to 1:0.61 to ensure that 1300 USDT is exchanged in the amount of $800 that it has in its inventory and return it to Bob.
5. Alice as well as Bob — who are using major stablecoins that are based on crypto
The previous case focuses on the first of the two types of coins that are stable. It also describes a situation in which a crypto-asset purchased goes upwards in value.
The situation here deals with the second form of stable coins . It describes an instance of a purchased cryptocurrency reducing in value.
Alice and Bob both have Ethereum and ETH. The current ratio of ETH to USD is $500. Both of them use an exchange that is decentralized and can change 1 ETH to get 500 DUI -soft, a stable currency which is pegged 1:1 with USD. The significance of “soft” refers to the fact that it is in the best case 1:1, and it can be changed at any time necessary to ensure the decentralized exchange is running.
Additionally, both must provide some security for the issuance of DUI for the amount of ex. of 110%/ 1.1 Ethereum. This is the moment that you are in the decentralized exchange are greater than (1 + 1.1)*2 = 4.2 the ETH for Alice Bob and Alice. Bob.
After a month, after the purchase, ETH is not doing well with its present exchange rate ETH/USD decreasing and then transforming to $450. Alice would like to cash out — she starts the exchange back to ETH and gets lower than the 1+1.1 ETH amount she originally put in.
In the hope of a change in the market, Bob doesn’t follow the path of Alice. One week later the news is bad for him that the price of ETH-USD has dropped to $400. In a bid to escape and out of the situation, he makes an exchange back to ETH but is rewarded with lower than the amount Alice was offered.
6. The true price of Bitcoin
The third thought experiment we have in mind involves Alice and Bob making the decision that they want to make a bet on Bitcoin. They deposit $500,000 in cash into the crypto-exchange. The deposit was then replaced by 5000 USDx which is the stable currency of the exchange.
They both purchase 1 BTC which, at the moment BTC-USDx’s exchange rate is 55,000. The crypto exchange is able to accept 10,000 in fiat deposits. After a few months, Alice and Bob deposit and purchase 1 BTC each time at the moment BTC-USDx’s exchange rate is 15,000. The crypto exchange earns $30,000 and currently holds $40,000 in deposits from fiat. Alice and Bob now have four BTC together.
The market has slowed down and maintains the sameBTC-USDx prices of approximately 15,000.
In the event that Alice and Bob both think this is as the best price on markets and choose to dispose of their 4 Bitcoins the cryptocurrency exchange is not able to meet the request to sell with the current BTC-USDx equals 15,000 price.
The exchange has only the equivalent of $40,000 in deposits in fiat currency and can return the owners Alice and Bob just $10,000 for each BTC they have ($40,000USD or four BTC).
7. Lambo -> Moon scenario
The close of 2020 is a time to witness the beginning of a bull market for Bitcoins. The prices rise and increase until they reach the record high price at the close of 2017 BTC-USDx = 20.000.
New and old ‘gurus of the crypto-market keep declaring bold predictions of Bitcoin increasing to $100,000 or $500,000 or more all the way to the Moon and allowing Bitcoin holders to drive Lamborghinis…
What is the reason for the BTC price rising and up?
The global pandemic has made our future uncertain. Let us seek out a safe heaven that preserves the importance of what we have.
Bitcoin and other cryptocurrencies are considered to be safe by a large portion of people around the world.
There is currently an increasing flow of fiat currencies into crypto-exchanges, buy orders for Bitcoin as well as other important crypto-coins. Because there are more sell than buy orders, crypto-coin price is always rising.
But, even if a part of the flows of fiat change direction in the case of selling Bitcoin and then withdrawing it to cash this 1:1-peg for the stability currency will be broken as shown in the previous examples.
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