nodes

Arizona governor vetoes bill targeting taxes on blockchain node hosts

The bill aimed to have only state authorities impose regulations and taxes on individuals and businesses running blockchain nodes, as opposed to those at the city and county level.

Katie Hobbs, the governor of the American state of Arizona, has vetoed legislation that would have largely stopped local authorities from imposing taxes on individuals and businesses running blockchain nodes. 

In an April 12 decision, Governor Hobbs issued a veto to Arizona Bill 1236, first introduced in January. The legislation aimed to revise sections of statutes pertaining to blockchain technology, largely reducing or eliminating regulation and taxation of node operators at the state level.

“A city or town may not impose a tax or fee on any person or entity for running a node on blockchain technology in a residence,” said the Senate version of the bill. “The imposition of a tax or fee on a person or entity running a node on blockchain technology in a residence is of statewide concern and not subject to further regulation by a city or town.”

Under the bill, the same restrictions for cities and towns on node operators would have also applied to counties. Following approval in the Arizona Senate and House, lawmakers sent the bill to Hobbs’ desk, where she vetoed the legislation on her 100th day in office.

Related: Colorado governor says he expects state to accept tax payments in crypto by summer

Some Arizona lawmakers have introduced legislation aimed at making the U.S. state a pro-crypto regulatory environment for both companies and individuals. State Senator Wendy Rogers proposed Arizona’s government make Bitcoin (BTC) acceptable as legal tender and joined with other lawmakers in a resolution having crypto be a tax-exempt property under the state’s constitution.

Magazine: Best and worst countries for crypto taxes

The state of the Bitcoin Lightning Network in 2023

To what extent does the surge in the use of custodial wallets and difficulties in running a Lightning node undermine the Lightning Network?

The Lightning Network, a layer-2 payment solution built on top of the Bitcoin blockchain, is six years old. 

Products, users and the amount of Bitcoin (BTC) sent on the Lightning Network (LN) has sky-rocketed in 2023, despite the price per Bitcoin slipping under $20,000.

Source: Twitter/Kerooke

The LN has benefited from the integration into the Nostr protocol — in which users can send one another satoshis (small amounts of Bitcoin) — and the proliferation of custodial and noncustodial LN wallets, and its formal integration in territories such as El Salvador and Lugano.

From Mediterranean cities to Senegal, the LN is also growing as a peer-to-peer means of payment. Nonetheless, despite its growth, concerns still stymie the network, according to key opinion leaders interviewed during Advancing Bitcoin Developer Conference in London.

Eric Sirion, co-founder of Bitcoin mobile app Fedi and maintainer of the Fedimint protocol, explained that running a Lightning node in 2023 is still difficult and that some people don’t bother when faced with the complexity:

“To keep your own Lightning node running, to keep well connected, like keep your connections up to date with the nodes that are relevant — it’s a part-time job essentially.”

Matthias Koller, co-founder of Swiss company Pocket Bitcoin, said, “It has become substantially easier compared to early 2018. However, it is still not ‘easy’ for the masses.”

“But it’s exciting to see the development around full node implementations and the progress that’s been made.”

Sirion, who wrote the open-source code Fedimint and now works on the Fedi team, explained that custodial Lightning wallets, such as Wallet of Satoshi, are popular among Bitcoin advocates. He’s right: It is the wallet of choice for Nostr, a space dominated by Bitcoiners.

However, the reliance on custodial wallets could be a problem for the LN. Trusting a third party with funds, such as Wallet of Satoshi, is contrary to the Bitcoiner mantra, “not your keys, not your coins,” Sirion said.

Furthermore, Koller explained that the reason many Bitcoiners end up sidestepping the “not your keys, not your coins” mantra is that some of the custodial solutions are just so easy. “It’s set up in seconds, ready to transact,” he said, noting:

“But in fact, it’s no different from keeping Bitcoin on an exchange — it’s not your Bitcoin. It’s risky if people aren’t aware of the risks involved and the amounts kept in custodial wallets grow in size.”

However, Koller conceded that custodial solutions are fine for “pocket money.” The LN is ideal for micropayments, but even so, trusting centralized wallet providers could erode privacy. In response to the rise in custodial wallets, one Twitter user explained, “If payments are being made from custodial mobile wallets to custodial mobile wallets it’s very simple to link senders and receivers.” 

Sirion hopes that the rollout of Fedi will undermine the reliance on third parties and provide a straightforward and privacy-centric route to using Bitcoin and Lightning. Fedi uses the open-source protocol Fedimint in which trusted members of a community share ownership of Bitcoin:

“If you’re already using custodial service, at least use one where you have a reason to trust the people that are.”

Moreover, the reliance on Lightning custodial wallets could be in part due to the difficulties in running a Lightning node. Node software businesses, such as Amboss and Umbrel, attempt to remedy the issue with improved UX, but in comparison to downloading Bitcoin Core to run a Bitcoin node, there are more steps, and a deeper understanding of Bitcoin is required to run a Lightning node.

Furthermore, in the world of Venmo, Revolut and other near-instant centralized payment services, there’s a risk that Lightning’s free and frictionless payments do not necessarily solve a pressing problem. During Advancing Bitcoin, Alex Leishman, CEO of Bitcoin firm River Financial, told Cointelegraph, “Bitcoiners use Lightning mostly because it’s interesting and it’s cool. It’s not solving deep problems in their life.”

Related: Bitcoin Lightning Network growth is organic, coming from real-world adoption

Koller joked that the LN is “Bitcoin on steroids. Fast, cheap and perfect for small, daily transactions.” Plus, it’s still substantially more private than Google Pay or using Visa or Mastercard at a checkout:

“The pain I feel every time I have to use a credit card online is just gut-wrenching. Give me Lightning everywhere!”

Leishman would like to see more people working backward from real human problems observed worldwide and see where Lightning can fit in. For example, in the West, the LN could resolve inter-institutional transactions.

“It can really move the needle on a number of things in the West and in the developing world.”

In El Salvador, some Salvadorans use the Lightning Network, but cash is still king. Leishman mentions the Taro protocol, which, once implemented, could allow for assets to be issued on the Bitcoin blockchain.

“Do people actually just want dollars? And does that mean we want to try to build stablecoins on Lightning with Taro?” he said.

Taro Diagram. Source: River Financial

These assets could be deposited into Lightning Network payment channels and transacted instantly. In theory, LN users could hold several balances in their wallets, including different stablecoins or dollars.

Currently, developers can mint, send and receive Taro assets on the test network of the Bitcoin blockchain. In the meantime, LN developers will continue to seek out more user-centric Bitcoin solutions.

Bitcoin node connection shuts down: BlueWallet users urged to withdraw funds

BlueWallet seeks to promote self-custody solutions and greater decentralization with its decision to sever the connection to LndHub.

BlueWallet is sunsetting its lightning node connection to Lndhub, according to an official statement. BlueWallet will cease custodial lightning operations, meaning that BlueWallet users of the Bitcoin (BTC) Lightning Network must connect to nodes to continue using BlueWallet lighting services.

Calle, a lightning developer who tweeted about the change, told Cointelegraph:

“The most important thing is that people don’t panic and suddenly noobs move out their on-chain funds or wrong lightning balances.”

The Lightning Network is a layer-2 payment solution built upon Bitcoin. The Lightning Network is used to send small amounts of Bitcoin around, called satoshis or sats, often using a lightning wallet.

Blue Wallet is a popular Lightning Network wallet with over 42 BTC ($1 million) liquidity. Its largest channel has a 4 BTC ($95,000) capacity, according to data from Amboss. BlueWallet is a popular lightning wallet, often recommended by well-known Bitcoiners.

Calle continued, “It’s important to realize that lndhub is a protocol that helps you connect wallets to accounts. The wallet (in this case) is BlueWallet but other wallets also support LndHub (like Alby or Zeus).”

“The account is shutting down, not LndHub or Bluewallet itself. The account here is hosted by the BlueWallet team and they don’t want to do this anymore.”

While users will still be able to withdraw their sats, creating new or refilling existing lightning wallets on the LndHub node will no longer be possible. BlueWallet publicly stated that users with sats connected to BlueWallet’s lightning node, they should move them as soon as possible.

BlueWallet’s website advises to “keep the amount [of Bitcoin] low” for using the Lightning Network, as it’s “experimental.“ Source: bluewallet.io/lightning

The service will be shut down on April 30th, so it is crucial that BlueWallet users move their sats to another service or wallet of their choice. However, regular Bitcoin wallets are not affected by this change.

Related: Bitcoin Lightning Network growth is organic, coming from real-world adoption

While some may view the change as a thorn in the side of Lightning Network adoption, it is important to note that BlueWallet will “only support self-custody solutions,” according to the website. The change seeks to promote decentralized solutions and self-custody.

Disclaimer: Cointelegraph reached out to BlueWallet for comment. BlueWallet said to check the blog post on BlueWallet’s website.

‘Decentralized Infura’ may help prevent Ethereum app crashes: Interview

The initial Decentralized Infura marketplace, which is currently in development, is expected to include up to 10 Web3 data providers.

Infura is developing a decentralized marketplace of data providers that will help to prevent Web3 app crashes in the future, according to a Feb. 6 Cointelegraph interview with Infura researcher Patrick McCorry.

McCorry stated that the new “decentralized Infura” will help to ensure that blockchains remain decentralized by distributing data provider services among multiple providers in a marketplace. It will have “up to 10 providers initially” that will “work together to bootstrap the network and then […] Gradually iterate and get more players.” Some potential partners will meet at ETH Denver in late February or early March to discuss the project’s next steps.

The new project will not be a new blockchain. Instead, it will be a marketplace that matches consumers of blockchain data with data providers. The current centralized Infura will simply be one of the providers on the network, as McCorry explained:

“There’ll be a marketplace where basically the new providers will sign up […] They can place the resources that they have available, so they can say, ‘I can satisfy these requests at this price.’ Users could come along and then buy those resources and then it’s like a matchmaking service of users.”

McCorry believes this will make the Web3 ecosystem more resilient by allowing users to rapidly switch to a new provider if the one they are currently using experiences an outage. He also stated that the new decentralized Infura might be more censorship-resistant than the current service because providers will be spread out over many different geographical areas and operating under different jurisdictions.

“I think what’s important to highlight here is that the goal of decentralized Infura is not to fight against censorship, or to even enable that. The whole point of decentralized Infura is a reliability project, to guarantee that if we were to go offline another node will come along and pick up the traffic,” he said. However he added that the network would have providers in countries that are in different jurisdictions and subject to different rules.

“The way you get censorship resistance is geographical location. Now, if you’re in a country where you don’t have to abide by certain sanctions, you can facilitate the request. “

“It’s not the goal of decentralized infura to facilitate sanctioned transactions, but there will be nodes there who will be from different geographical location so they could potentially serve the request. Infura themselves as of course, an entity on that network will of course adhere to any sanctions or any requests in that regard.”

Related: Are we still mad at Metamask and Consensus for snooping on us?

Infura is a suite of APIs and developer tools that is used by Web3 app developers to pull data from blockchains. It is used by many different Web3 apps, including MetaMask, Gnosis, Aragon and others. It is also used by many centralized exchanges to track deposit and withdrawal transactions.

Although blockchain networks charge transaction fees to prevent too many transactions from overloading servers, these fees are only charged to users writing data to the blockchain. Infura has emerged as one way to charge developers or users for reading data, which does not usually incur a transaction fee on-chain.

As Infura has become increasingly used by developers, it has come under fire for allegedly being too centralized. In November 2020, the MetaMask wallet app stopped working for most users when Infura servers went down, and some centralized exchanges were prevented from getting accurate transaction data from it anymore. This led some critics to question whether Ethereum can be genuinely decentralized as long as developers depend on Infura to provide data for their users.

Parts of this article were based on an interview with Patrick McCorry conducted by Cointelegraph’s Andrew Fenton at Starkware Sessions 2023 in Tel Aviv.

Secret Network validator shuts down nodes after leadership turmoil

An internal conflict at the privacy-focused Secret Network has resulted in at least one validator throwing in the towel.

A major validator for the privacy smart contract layer-1 blockchain Secret Network has announced that it will no longer provide nodes and support for the network.

On Jan. 29, major validator Smart Stake announced that it would shut down its Secret Network validator nodes on Feb. 21.

Smart Stake cited “complex/stressful validator operations, cost/effort of validator ops, and recent events,” as reasons for withdrawing its services.

Smart Stake is a staking and validator service provider that supports several networks, including Crypto.com, Polygon, Cosmos, and until recently, Secret Network.

The move comes amid revelations by Secret Labs founder Guy Zyskind, regarding the Secret Foundation’s financial transparency.

On Jan. 28, Zyskind made public allegations that the foundation and its founder and CEO, Tor Bair, “sold a substantial amount of USD worth of SCRT,” —  the native token for the Secret Network — in late 2021.

“Tor cashed out a significant portion of these proceeds,” he alleged.

Zyskind also mentioned a $4 million inflow for the foundation in its Q4 2021 report but did not mention the withdrawal.

“This action was not disclosed in any financial reports provided to the community by the Foundation, which was introduced by Tor as a nonprofit organization on several occasions.”

Bair, however provided his version of events on the Secret governance forum on the same day. He stated that the withdrawals were part of his share of vested tokens.

“Instead of paying out my vested tokens in December 2021, I converted my vested portion of tokens to USD at the OTC price and Secret Foundation distributed these funds as a dividend.”

He added that “this information is verifiable in our 2021 tax filings, which have been previously reviewed by Labs, and I have previously disclosed this information to them.”

The ongoing internal leadership conflict has rattled at least one network validator provider and the ecosystem’s community.

Related: Secret Network resolves network vulnerability following white hat disclosure

SCRT prices have remained immune from the internal imbroglio, consolidating around the $0.80 level for the past week. However, the token is down 92% from its October 2021 all-time high of $10.38 and Bair’s $7 sale price.

Cardano recovers from an outage on 50% relay and block-producing nodes

An anomaly apparently caused around half of Cardano’s nodes to disconnect and restart over the weekend, with the root cause still under investigation.

Cardano stake pool operators (SPO) and users have been reporting at least half of the nodes for the network briefly went offline over the weekend. 

According to a Jan. 22 post shared on the Telegram SPO for Input Output Global, the engineering and research fintech behind the Cardano blockchain, an anomaly caused 50% of Cardano nodes to disconnect and restart. 

“This appears to have been triggered by a transient anomaly causing two reactions in the node, some disconnected from a peer, others threw an exception and restarted,” the post said, explaining the sudden disruption.

Despite a momentary degradation, the Cardano network recovered without external intervention. As explained in the post, “such transient issues” were considered in the node design and consensus and “the systems behaved exactly as expected.”

During the anomaly, which happened between block 8300569 and 8300570, block production reportedly kept going but was slowed for a few minutes and the “impact was low, akin to the delays that occur during normal operations.”

“Most nodes automatically recovered, depending on the SPO of choice.”

At the time of writing, the root cause of the anomaly and resulting node disconnections and restarts are still under investigation. 

“We’re now investigating the root cause for this anomalous behavior and implementing further logging measures alongside our regular monitoring procedures,” stated the official announcement.

Related: Cardano to launch new algorithmic stablecoin in 2023

Tom Stokes, the co-founder of Node Shark and a Cardano SPO, reported in a Jan. 22 post that more than half of the listed nodes were affected.

He also shared a chart showing where the network sync fell from 100% to slightly above 40% for over 300 reporting nodes.

According to Stokes chart, the network sync recovered back to around 87% after the drop but did not immediately return to its previous level at 100%. 

Another SPO reported similar issues to Stoke in a Jan. 22 post, but declared “Some SPOs saw no impact.”

“Others had relays and BPs restart. SPOs, Devs, and IOG are in Discord debugging atm. No root cause yet,” they said.

Nigerian innovator launches first active Bitcoin Lightning node in the country

A new Bitcoin lightning node in Nigeria could inspire individuals to take “control of their financial future,” node runner Megasley told Cointelegraph.

The Lightning Network has struck the earth in one of the most challenging operating environments. Lagos, the capital of Nigeria — Africa’s most populous country — welcomed a new Bitcoin Lightning Network (LN) node this week, a vital step to better connect the continent to the layer-2 payments network that sits atop Bitcoin.

The node runs on an old laptop powered by a diesel generator, as Lagos regularly experiences energy and electricity blackouts.

Megasley’s diesel generator and laptop running the node. Source: Megasley 

In a discussion with Cointelegraph, Megasley, who operates the first Nigerian Lightning node of 2023 and the first active Lightning node in the country (other nodes are dormant), shared his vision for bringing instant, low-cost payments to Africa thanks to the LN.

”Light takes 50 milliseconds to cross the earth. This is quick, but with many hops, these milliseconds can add up. And when you’re standing at a point of sale waiting for your payment to clear, it can be frustrating.”

Megasley explained his wish for Africans to have payments that are instant and as close to free as possible. “If a Nigerian Bitcoiner and a Nigerian retailer are both connected to a node in Nigeria, it will give them the best Lightning experience,” Megasley added.

According to the explorer services Mempool and Amboss, the operator is currently the only active node on the map in Nigeria. By spinning up the node, the operator aims to make Lightning payments as accessible as possible to Africans.

Nodes, Lightning Network, Lightning, Nigeria, Africa
Cast your vote now!

When asked about the importance of building out an extensive network of nodes across the globe to facilitate Bitcoin payments, the node runner explained, “If Bitcoin is to succeed, it must become a better, easier, faster medium of exchange than the incumbents. To get there, we need to build out an extensive network of nodes across the globe to facilitate these payments.”

Megasley also touched on Bitcoin  (BTC) price volatility and its perception in Africa: “People talk about the problem of volatility, but this is nothing when you live in a place where your money could easily lose half its value in a year.”

“Africa has rotten money controlled by rotten people, and this is why we need Bitcoin. We will take the power of money away from them so that the enormous potential of the African people can thrive.”

Indeed, there has been a surge in Bitcoin adoption among the countries that use the Central African franc, bolstered by Bitcoin conferences and forums in Senegal and Ghana. Although Nigeria has shown promising signs of Bitcoin adoption, such as legal tender discussion, the legacy financial system has imposed further restrictions in 2023.

For example, Nigerians will only be allowed to withdraw $44 dollars per week per individual and a maximum of $11,000 for businesses in 2023, as per the government’s efforts to phase out cash. As a reminder, Bitcoin has no limits or restrictions for its use. To transact freely on the Bitcoin network, users require only a phone and an internet connection.

Related: Bitcoin, Sango Coin and the Central African Republic

The establishment of a Bitcoin Lightning node in Nigeria is a significant step toward increasing accessibility and adoption of the cryptocurrency in the country and the continent as a whole. Ultimately, Megasley hopes to empower individuals and businesses in Africa to take control of their financial future.

Bitcoin nodes data: Frankfurt houses the largest city-wide network

Distributed across 5,773 cities worldwide, over 60% and 14% of the Bitcoin nodes run on IPv4 and IPv6 protocols, respectively, while more than 25% run anonymously on .onion.

While the United States holds the biggest share of Bitcoin (BTC) hash rate contribution and ATM network, the city hosting the most reachable Bitcoin nodes — a crucial pillar of the Bitcoin network — is Frankfurt, Germany.

Bitcoin nodes are a distributed network of computers that run the Bitcoin software and accept a set of proof-of-work (PoW) consensus rules to validate and broadcast transactions on the blockchain. Of the 43,706 nodes hosted across 134 countries, the U.S. hosts 9,999 (30.53%), while Germany ranks second with 4,529 (13.83%) nodes, according to data from Bitnodes.

List of top 10 countries with most number of Bitcoin nodes. Source: Bitnodes

However, when it comes to the contribution of individual cities, Frankfurt was found to host the largest number of IPv4/IPv6 Bitcoin nodes at the time of writing. Nearly 2%, or 652 nodes, remain active in Frankfurt. The U.S. city of Ashburn takes the second spot with 517 (1.58%) nodes, as shown below.

List of top 10 cities with most number of Bitcoin nodes. Source: Bitnodes

Due to factors such as internet service provider firewalls and private networks, nearly 18% or 5,865 Bitcoin nodes were not attributed to any specific location — aiding Satoshi Nakamoto’s vision for a truly decentralized payments system. The top 10 cities with the highest Bitcoin nodes include Helsinki, Toronto, London, Amsterdam, Moscow, Tokyo, Dublin and Nuremberg.

Cast your vote now!

Distributed across 5,773 cities worldwide, over 60% of the nodes run on IPv4 protocols, 14% run on IPv6 protocols and more than 25% run anonymously on .onion.

Related: Lightning Network gets physical form in Australia with Bitcoin ATM

Amid skyrocketing hash rates and increased adoption, the growth of the Bitcoin ATM network seemed stagnant over the past six months.

Chart showing the number of crypto ATMs installed over time. Source: CoinATMRadar

Just 94 Bitcoin ATMs were added to the global network between July and December 2022, with a modest 4,169 ATMs added during the year’s first six months.

Lightning Network releases emergency update after critical bug on LND nodes

The bug led LND nodes to fail to sync chain in the second critical bug in less than a month.

An emergency update was released to all of Lightning Network’s LND node operators on Nov. 1, after a critical bug caused LND nodes to fall out of sync chain. This was the second critical bug experienced by the network in less than a month. 

According to Lightning Labs, developer of the Bitcoin Lightning Network, some LND nodes stopped syncing due to an issue with the btcd wire parsing library. The hot fix (v.015.4) was released nearly three hours after the break. The release stated:

“This is an emergency hot fix release to fix a bug that can cause lnd nodes to be unable to parse certain transactions that have a very large number of witness inputs.”

As per the issue on GitHub, non-updated nodes will be vulnerable to malicious channel closings once channel timelocks expire in two weeks. The bug impacted only LND nodes, making the current chain state outdated, although payments transactions were still available. Some versions of electrs were also impacted, according to another issue on GitHub.

The bug was triggered by a developer dubbed Burak on Twitter, with a message in the transaction saying: “you’ll run cln. and you’ll be happy.”

Burak was also responsible for triggering a similar bug on Oct. 9, when they created a 998-of-999 multisig transaction that was rejected by btcd and LND nodes, leading to the rejection of the whole block and all blocks following the transaction. On the same day, Lightning Labs released a patch to fix the issue.

Related: What is the Lightning Network in Bitcoin, and how does it work?

On Twitter, users suggested that it was time for an LND bug bounty program:

Hacker Anthony Towns also claimed to have disclosed the vulnerability to LND developers two weeks ago, noting, “The btcd repo doesn’t seem to have a reporting policy for security bugs, so not sure if anyone else working on btcd found out about it.”

The Lightning Network is a second layer added to Bitcoin’s (BTC) blockchain that allows off-chain transactions, i.e. transactions between parties not on the blockchain network.

Nodes are going to dethrone tech giants — from Apple to Google

Decentralized systems are slowly putting power back in the hands of developers and users — and taking it away from Big Tech companies.

While highly regarded even at the time of its writing, Marc Andreessen’s 2011 landmark essay, “Why Software Is Eating the World,” has proven even more prophetic than it seemed at the time. At the dawn of a decade when software would prove invaluable to nearly every aspect of modern life, Andreessen argued that every company was now ostensibly a software company, whether the company liked it or not.

Tailoring his argument to many of the companies that were market leaders at the time, his ideas eventually also applied to companies that either hadn’t fully defined their markets or didn’t even yet exist but would go on to generate billions in market share: Uber, Lyft, TikTok/ByteDance, Robinhood and Coinbase, among several others. If you were going to be a unicorn in the 21st century, software was probably going to be a key part of earning that horn.

The hidden motor behind this complete disruption of modern economies and life was the emergence of true cloud computing and cloud giants, an industry in which Andreessen himself had been a pioneer at a time when many inside and outside computing were scoffing at the notion.

By the second decade of the 21st century, they weren’t scoffing much at all. In the 2010s, worldwide spending on cloud computing more than quintupled, from $77 billion to $411 billion. It was the backbone of what made everything accessible at the touch of a button on the computer in our pocket.

Related: Facebook and Twitter will soon be obsolete thanks to blockchain technology

But there was a great cost to making so much of life so easy.

While the mobile-powered software revolution made life as easy as the push of a button, as with anything else, it came with its own compromises. With software eating the world, it became the province of very few, very large cloud hosting companies. Amazon, Google and Microsoft now account for 65% of the cloud hosting market.

This created its own sort of shadow monopoly via cloud hosting. For example, with cloud hosting in particular, hosts can knock services off of clouds, as Amazon did with the notorious social media service Parler. Parler was also banned from Apple’s App Store.

When it comes to the larger issue at stake here, it doesn’t matter whether or not you agree with a service like Parler. What the incident demonstrated was that it only took two companies, Amazon and Apple, to completely knock a service offline, effectively putting it out of business in the post-software world.

What happens when a service or developer runs afoul of a more innocuous Amazon policy or term of service? The internet has been painted into a corner where it can no longer truly be a marketplace of free ideas and free development, especially if that development is somehow perceived as a threat by companies like Amazon and Microsoft.

Nodes can build a new world

Just as Bitcoin (BTC) “broke” money and allowed people to think about the exchange of value in new ways, newer blockchain protocols have the chance to “break” data in a world that has been consumed by software and oligopolistic companies, allowing us to think about the exchange of that data in new ways.

Web3 and the projects it will birth promise to redefine how information lives and is carried through the internet autonomously and transparently. Decentralization-first and community-first ecosystems promise to put power back into the hands of developers and, thus, the users who will use their decentralized applications (DApps) and software. This will allow for a common framework that promotes best practices and economies of scale that will be able to compete with the largest centralized entities on the internet.

Related: The feds are coming for the metaverse, from Axie Infinity to Bored Apes

That isn’t to say we’ve yet reached a decentralized utopia. Though decentralized systems are also ostensibly “trustless” systems, it is ironically trust that still must be built up in these systems for both developers and users. Whatever the disadvantages of relying on companies like Amazon, Google, Microsoft and Apple, they have banked decades’ worth of that trust, credibility and familiarity that makes it difficult for both developers and users to switch to an entirely new way of doing things.

Part of building that trust is rewiring the incentivization model that has supported the last several decades of the internet. For a new decentralized internet to work, it will mean users buying into nodes and developers best utilizing those nodes to build software that is simple enough to run and access on one’s phone as Uber or Wordle.

If the decentralized Web3 community is able to do that, we can restore the world that was eaten by software, one node at a time.

Michael O’Rourke is a self-taught iOS and Solidity developer who previously owned and operated a blockchain development agency. In 2016, he began building what is now Pocket Network. He was also on the ground level of Tampa Bay’s largest Bitcoin/Crypto meetup and consultancy, Blockspaces, with a focus on teaching developers Solidity.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.