A 7-Year Legal Fight Led This Dev to Build Unstoppable Ethereum Storage

“If you build it strong enough, the law will follow.”
That’s how Daniel Nagy, the leading developer behind Swarm – ethereum’s decentralized storage-layer – described his “takeaway lesson” after a seven-year legal battle over the hosting a file-sharing node.
A precursor to peer-to-peer file sharing service, Bittorrent, Nagy was running a DC node, a technology that is now “perfectly and completely obsolete,” according to the developer.
“I had a bit of a legal fight over it and I won,” he told CoinDesk.

In the aftermath of that fight, Nagy – who founded of the Hungarian branch of the Electronic Frontier Foundation – joined the Ethereum Foundation, where he was inspired to look deeper into censorship-resistant technology.
In particular, Nagy’s experience in the courts initiated his work on Swarm, a hotly anticipated storage layer for ethereum, where he focuses on systems architecture and privacy-preserving cryptography.
With Swarm, Nagy is fixated on how to make decentralized storage robust enough that legal repercussions of this kind can’t happen – in what he describes as “an arms race” between developers and regulators.
“This is an arms race, and since we can develop stuff and the marginal cost of replication is zero, we will win this arms race, and I think everybody knows that,” he told CoinDesk.
An ethereum initiative that has been active since the early days of the platform, Swarm seeks to provide a mechanism for the blockchain to offload some of its historical data, as well as handle file-storage more broadly.
With an emphasis on “efficiency, speed, confidentiality, and security,” the decentralized storage-layer is built with the aim of rendering the cost of attack so inefficient that the legal system is forced to update itself in response.
According to Nagy, that’s because a fully robust network, “can actually inform decision making, even to the point of how law is interpreted by judges and enforcers.”

Unstoppable storage
Intended to provide a base infrastructure for a decentralized internet, Swarm splits information up between the computers of different network participants.
To protect this layer from censorship – what Nagy defines as taking information out of circulation – decentralization and privacy are vital.
For example, what developers call “redundancy” is key to how Swarm protects against censorship. This refers to the duplication of critical system components of a system – creating, in effect, a “swarm” of machines.
“If you have multiple channels of communication, multiple locations of storage, then censoring becomes more expensive because you need to find all of them and shut down all of them,” he told CoinDesk.
While it’s possible to store information in a transparent way on Swarm, much of Nagy’s work has focused on how to ensure sensitive information remains private, even when stored on someone else’s computer.
To do this, Swarm uses what is called “counter mode” encryption. If there’s a dispute, the protocol shares a small piece of encrypted data that can verify ownership without revealing any other information.
In order to access the stored information remotely, Swarm uses public and private key pairs.
As such, participants will host encrypted data chunks on their laptops, and in most jurisdictions, can do so with a degree of plausible deniability – also meaning that, because Swarm nodes don’t hold the keys to unlock data, they won’t be at risk of legal trouble.
According to Nagy, that’s important because attack-resistant storage is essential to healthy societies.

Future directives
The storage protocol is currently in public alpha, meaning that while still under heavy development, but today, anyone can run a Swarm node.
Going forward, the protocol will also offer incentives in the form of ether (ethereum’s native cryptocurrency) for participants in the Swarm network. This aspect is still being fine-tuned.
Additionally, according to Nagy, Swarm encryption has been designed to be “as smart contract friendly as possible,” in order to ensure that dapp developers can seamlessly integrate the technology.
That’s because while primarily intended to store smart contract information and other blockchain data in a decentralized way, Swarm has other, more far-reaching use cases on the horizon.
For example, the project has secured a number of partnerships over the past year, including video streaming startup Livepeer and Datafund, a privacy-centric data management protocol.
Nagy is also using Swarm to build a censorship-resistant social media platform called BeeFree, working with fellow Ethereum Foundation developer Dimitry Khokhlov. Their goal is to use the technology in a bid to create an alternative to platforms with heavier forms of censorship.
“We have access to a kind of shared pool of knowledge that humanity has accumulated, and if that is being censored, that makes us much much much dumber as a society,” Nagy said.


Source
Author: Rachel Rose O’Leary
Image Credit

Cryptocurrency Startup Swarm Is Selling Tokens Backed by Robinhood Shares

Cryptocurrency startup Swarm has an ambitious plan to democratize venture capital, and it has today taken a major step toward that goal by listing tokens that allow investors to purchase fractional shares in privately-owned fintech darling Robinhood.

No, Robinhood, a wildly-popular commission-free stock trading app that recently earned a $5.6 billion valuation, isn’t holding a security token offering (STO), nor has it even announced plans to make its shares available to the general public through a traditional public listing.

Those hurdles, however, did not prevent Swarm from finding a way to bring Robinhood shares to the public anyway.

Here’s how it works. Through partnerships with brokers and syndicate managers, Swarm has sourced equity from former Robinhood employees looking to cash out before the firm’s eventual IPO. That equity is held by what is essentially a shell company, whose shares are then listed on the Swarm platform as SRC-20 tokens.

All of this, Swarm says, can be accomplished without Robinhood’s permission — much less its willing participation. In fact, when the crypto startup first announced in June that it planned to turn Robinhood shares into cryptocurrency tokens, a Robinhood spokesperson told CCN that the firm was not even aware of Swarm. When reached for comment today, the firm provided the same statement and said that it had no further comment.

In any case, these tokens are now live on the Swarm platform, with a hard cap of $1 million in contributions.

“Secondary equities transactions and refinancing of legal entities which hold private company equity are not new in the United States. What’s new here is the tokenization of these assets, and the doors opened by this innovation,” said Philipp Pieper, CEO of Swarm Fund, in a statement.

He added:

“One of the key innovations of tokenization is that token owners can participate in the value creation of the very network they are part of. Swarm is bringing this paradigm shift to companies that are key players within this movement, but have yet to permit the network to participate.”

At present, though, that democratization of VC can only go so far. Due to regulatory concerns, Swarm tokens are restricted to accredited investors, who must demonstrate that they have a net worth of at least $1 million or an income above $200,000 ($300,000 combined if married) in each of the past two years and expect to meet that threshold in the present year as well. The firm has said that it hopes it will be able to make its products available to retail investors at some point in the future.

As CCN reported, Swarm has also announced plans to tokenize equity in other privately-owned tech companies such as Coinbase, Ripple, and Didi, though their shares have not been listed on the firm’s platform. Coinbase allegedly sent Swarm a cease-and-desist letter, but a Swarm spokesperson told CCN at the time that the company was confident that it would be able to proceed with its plans.


IZX

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Source
Author: Josiah Wilmoth
Image Credit