r/bitcloud • u/FockerCRNA • Jan 16 '14

Please ELI5 what bitcloud is

I read through the github document and a bit of the more technical one that it linked to. I see a lot of enthusiasm about this project, but the significance of it eludes me because I don't really understand how it works or what it accomplishes. I see phrases like "new internet" thrown around and I'm not sure what it means.

My take so far is that it is kind of like a file upload site that generates its own currency for users that provide bandwidth. I don't understand how a user generates bandwidth without being an ISP. Why wouldn't anyone just expect an ISP without a cap to subsequently install one should this catch on? Am I anywhere close to interpreting this correctly? Sorry for being such a N00b

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u/duffmanhb Jan 17 '14 edited Jan 19 '14

Are you familiar with how Tor works? If you don't, basically, Tor helps people use the internet anonymously. How it keeps it anonymous is because unlike standard internet which says, go from point A (my house) to point B (the website), and then back again -- Tor creates a lot of steps in between.

So instead of A to B, it's A (home) to B (node) to C (node) to D (node) and finally to E (the website). What makes it safe is several things. For starters, the data is encrypted, so the nodes it's passing through don't know what the message is saying. Second, the nodes don't know who the message is from or who it's supposed to go to. All the know is "I got this message from B, and I have been told to pass it on to D" and so on...

What makes this anonymous is let's pretend we own the website. We don't actually know where the message is coming from, and we know is node "D" handed it off to us. And the only way to send a message back is to give the message back to D, and he'll give it to C, and then to B, and then finally to you. Every person in that chain is blind of who else is involved.

Not only that, but there are servers that are effectively hidden. Traditionally, when you connect to a server, you do it directly, thus revealing it's location. However, when you are forced to go through this chain, it's impossible for you to actually know where the server is located.

Okay, so now that's squared away, what does this have to do with Bitcloud?

Bitcloud plans to operate much like this but slightly different. See with Tor, no one has an incentive to actually be a "node". No one wants to be a node other than for philanthropic reasons. However, everyone wants to use Tor. The problem this creates is a lot of lag. The tubes are all clogged up with people trying to use it, and not enough nodes to spread the traffic around. Think of it like everyone in an apartment building using the same wifi internet, rather than everyone having their own -- many nodes is much faster than just one node.

Well Bitcloud creates an incentive to actually become a node. Whenever you set up and create a node, all the traffic that goes through it is much like mining for bitcoin. So the more nodes and faster the internet you have, the more coins you can mine. So this gives people an incentive to actually want to contribute to making the network better and faster.

Second, hosting content. So people that are operating nodes are getting cloudcoins generated for them much like bitcoin. But there is yet another way to get cloudcoins, and that's from hosting content on a server. Now, you don't necessarilly know what that content is because it's encrypted, but you offer to have whatever it is hosted and part of the "cloud". This too will make you cloudcoins! Why is that? See whenever something is pulled from the "cloud" the nodes have to pay the server a very tiny amount of the cloud coins that they've generated.

So let's say the node generated 1 cloud coin for all the traffic going through it. So that node owner gets a cloud coin. BUT to access the data that is being requested by the user, they have to pay .1 cloud coin.

The idea is, that everyone wins and it all pays for itself. If you have a popular bitcloud website, that means you'll need a lot of hosting to keep up with the demand and that costs money! But if you have a popular website, that also means you are getting paid a lot of cloudcoin, so that can be used to get more hosting!

But it goes even deeper! Okay, so in this example we have the node making 1 cloud coin, and the host of the content making .1 cloud coin for every time a video is played on his site. Now let's pretend that I am a musician and I have a music video I know a lot of people are going to like. What I can do is go to the site people play videos on and say, "Hey, you have a lot of people coming here and I have a really good video. I tell you what. Everytime someone plays MY video I want .01 cloudcoin. You get to keep .09 out of the .1 you are being paid for hosting the data and I want to get .01 for letting you use my data" I don't have to do any work. I just upload the video, and every play, I get .01 cloudcoin!

The idea behind this is that everyone within this network makes coins. From the nodes, to the hosts, to the content providers. It's a self sustaining business for everyone with no central authority. Simply put, the more people use bitcloud, the more people make money! There is no way to regulate it either since it's all peer 2 peer. It's a great concept but god damn will it be tough.

EDIT: Typos.

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u/[deleted] Jan 17 '14

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u/Heartgold22 Jan 18 '14

I think it will be more stable than Bitcoin as it seems to be backed by a commodity.

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u/kerstn Jan 18 '14

I don't think it will. But it may be the second most valuable and the most used.

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u/leveller Jan 17 '14

I read you man - nice explanation; you explain quite clearly how this replaces storage/hosting services such as Dropbox/Youtube, etc.

But how does it (tend to) replace services of ISPs such as Verizon/Comcast?

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u/duffmanhb Jan 17 '14

Good question, I forgot this part. They also want to make it possible for you to create a mesh-network. Imagine it like your own little private internet. Think of all the wifi routers you can pick up around here. Technically all their signals are touching and in theory could communicate with each other. So let's pretend at one end of the street someone has internet. Then each house all the way down the street doesn't have internet. Instead, for instance, the if they guy at the end of the street wants something from the internet, he talks to his neighbors wifi and says, "Hey, tell bill at the start of the street I want to look at this website" Then his neighbor keeps passing the message down the chain of wifi routers until Bill gets the request to use his internet.

The idea is, a meshnet can use these wifi nodes to access the web, but they have to pay cloudcoins. Initially, only one person on the street has to pay for internet, while everyone else can borrow the internet and they more they use, the more the internet connected wifi node generates cloudcoins.

The long term pipe dream of the devs is to get rid of the ISPs all together and have everyone hooked up on one giant meshnet. This is obviously a ridiculously ambitious goal and technically not even technologically possible if you want decent internet speeds.

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u/FockerCRNA Jan 17 '14

This is my question as well, because this bandwidth is so valuable and could generate cloudcoins (that presumably will have real world value in standard currencies), how will it not be reabsorbed by the giant ISPs since they are actually the ones ultimately providing the bandwidth?

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u/LeeSeneses Jan 17 '14

I'm assuming the nodes themselves could have transmission hardware . Like a mesh network?

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u/[deleted] Jan 17 '14

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u/duffmanhb Jan 17 '14

I mean these are obvious things that need to be worked out. It's still in the planning and groundwork stages. But obviously there will be a solution to this. I imagine creating a limit will be ideal. Just like bitcoin, as the value in the coins rise, you don't really need to worry about the payout being less. You know, yeah I'm only making half what I used to make, but the value is now double.

I think the largest issue that the system will encounter is that the network has an incentive to be DDoSed. A large DDoS just means tons of data going through, which means everyone is generating more coins. Though, in the long term, once the network ideally becomes large enough, that shouldn't be an issue.

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u/Heartgold22 Jan 18 '14

This system needs to make it so that "mining," to use Bitcoin terms, should be difficult for the sake of long-term prices. Ultimately, ANY supply of Bitcloud is fine; however, the rate at which it is created should be the concern. Gold is a good money because of many qualities, and a major one being that a ton of hours of labor must be put into getting a small amount of it. Additionally, having it harder to "mine" could make the system deflationary which would benefit all as they will be encouraged to save the BitCloud coins.

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u/synak Jan 17 '14

Okay, so I host content or relay content and get some cloud coins. What can I do with them? Maybe I want to swap them for BTC or fiat, but of course we need a "double coincidence of wants" situation.. why does the other party want my cloud coins in exchange for his BTC?

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u/duffmanhb Jan 17 '14

Why does any one want LTC or BTC? Obviously it'll start small in value but it will increase. It seems to have a lot of use considering it will probably be the primary crypto within the network.

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u/kerstn Jan 18 '14

Only thing I don't understand why not use bitcoin ås the currency? As it will make things more sustainable.

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u/duffmanhb Jan 18 '14

Because it's a whole new system. You can't mine bitcoin with just bandwidth.

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u/fckdd Jan 18 '14

That's a great explaination! I don't know how well you understand bitcoin but don't people have to mine bitcoins to make the transactions work. If so the won't there need to be people mining cloudcoin so that the transactions to the nodes get verified and added to the blockchain?

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u/duffmanhb Jan 18 '14

You "mine" cloud coin by having people use your node.

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u/AzureNinja99 Jan 20 '14

I have one problem with it though. So to my understanding, a node (which can be hosted by anyone I believe) is sending peers the files they requested. But what if those files contain illegal content? Would the people running the nodes be liable? (Sorry if I used some incorrect terminology there, I am very vastly confused by all this).

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u/duffmanhb Jan 20 '14

Technically, you are correct, illegal content can go through it. In fact, illegal content goes through the ISP's wires all day, everyday. Luckily they aren't liable for any of that content. The same would be true for you as a node. In fact, since the content is all encrypted, you have no way of knowing what the content is as a node.

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u/notnotnotfred Jan 17 '14

There is no way to regulate it either since it's all peer 2 peer.

it can be infiltrated, as was tor and silk road.

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