Bitcloud: Bitcoin-like "distributed autonomous corporations" that replace Youtube, Facebook, etc

Some Bitcoin enthusiasts have announced a new project called Bitcloud. The idea is something like the old Mojo Nation P2P architecture, in which individual Internet users perform tasks for each other -- routing, storage, lookups, computation -- in exchange for very small payments.

The Bitcloud protocol uses Bitcoin-style accounting to allocate those microtransfers, along with Bitcoin-style proof-of-work (they call it "proof-of-bandwidth") and the authors suggest that the potential for profit by individual members will create enough capacity to replace a large number of centralized commercial services ("Youtube, Dropbox, Facebook, Spotify, ISPs") with "distributed autonomous corporations," that obviate the need for centralized control in order to supply anonymous, robust, free services to the public.

The idea is an interesting thought-experiment, at least. The idea of "agorics" -- using market forces to allocate resources on the Internet -- is an old one, and I remain skeptical that this produces optimal outcomes. That's because its proponents seem to treat market efficiency as axiomatic ("everyone knows markets work, and that's why we should make them the basis of network resource allocation") and their proposals are substantially weakened if you don't accept the efficient market hypothesis.

The Bitcloud protocol is a decentralized application that provides the services of cloud storage and bandwidth sharing. Users will interact with this service in a variety of different ways, but the main idea behind the protocol is that people will be able to store data in the cloud in a way that limits censorship, surveillance, and centralization. Moderators and nodes are providing a service to their users, and they need to be paid to cover their costs. Cloudcoins are the currency of the Bitcloud protocol, much like bitcoins are the currency of the Bitcoin protocol. You need bitcoins to use the Bitcoin payment system, and you need cloudcoins to use Bitcloud in certain ways. For example, someone who wants to advertise on a public video that is streamed from a Bitcloud node will have to pay for that advertisement in cloudcoins. Another example would be someone who wants to pay for personal cloud storage on the Bitcloud network. By monetizing the system, nodes can get paid for their willingness to share bandwidth, provide cloud storage, and allow for direct streaming to stored content. Adding the profit motive to the equation gives this project a chance to succeed where many others have failed in the past. Donations can only take you so far when you are trying to create something of this magnitude.

We want to replace YouTube, Dropbox, Facebook, Spotify, ISPs, and more with decentralized apps based on proof of bandwidth. We need developers. Welcome to Bitcloud. (self.Bitcoin) (Thanks, Freemore!)

(Image: Clouds, a Creative Commons Attribution (2.0) image from nirak's photostream)