Doc's Daily Commentary

Mind Of Mav

The State Of The Internet — The ‘Splinternet’

 

As the TikTok deal details are likely to come tomorrow, it highlights the current age of the Internet. 

The World Wide Web has become the Isolated Internet — the ‘Splinternet’.

The dream of the internet was to create a global information network, with protocols that made it possible to interconnect any of its nodes.

What has happened since those early days? What is the so-called “network of networks” evolving into?

China and its Great Wall are the best-known example of an isolated internet: total monitoring of all activity, and a huge censorship system that prevents Chinese citizens from accessing content and services that their government doesn’t want them to. The system, on the one hand, maintains tight social control that qualifies anyone who tries to access what they should not as a dangerous dissident, which you can skip if you are a foreigner or occasional visitor and have a working VPN, but most VPNs are illegal in the country, and although many companies with foreign activity use them, they generally operate in an environment of controlled permissiveness. On the other hand, it has kept the big international competitors out of China and allowed the country to develop domestic copies of their services, and now, big companies that grew in the huge Chinese market and are now looking at international expansion.

Then, Trump got elected. Now, we have a full-scale trade war, technology war, financial war, monetary war, technology, information, data, investment, pretty much anything across the board. Look at tech — there is complete decoupling. Heuwei and TikTok being barred from US shores is a weathervane for what’s to come.

If the United States argues that 5G or Huawei is a backdoor to the Chinese government, the tech war becomes clumped into the trade war.

This is because every piece of consumer electronics, even your lowly coffee machine or microwave or toaster, is going to have a 5G chip. This property is what the Internet Of Things (IOT) is all about. If the Chinese can listen to you through your smartphone, they can listen to you through your toaster. Once we declare that 5G is going to allow China to listen to our communication, we will also have to ban all household electronics made in China. So, the decoupling is happening. We’re going to have a “splinternet.” It’s only a matter of how much and how fast.

Meanwhile, Europe, with its laws that seek to dictate how the internet should function, is increasingly leaving out more and more service providers that don’t meet its requirements. In June, an important underreported release from the European Union Parliament detailed a plan to introduce a government controlled Internet similar to the Chinese firewall. This news along with India’s recent ban on Chinese apps (including Tik Tok) represents a global shift towards the territorialization of cyberspace — the Internet becoming disjoint segments of sovereign spaces or a “Splinternet”. More countries have started to recognize the economic value left on the table from not investing in digital technology at home and seek to replicate the tech boom in the US. In their effort to aggressively fund local early stage companies and increase competition, digital policies inspired by the Chinese firewall mark a retreat from globalization to artificially constrain foreign competition. In addition, social media and online forums are being recognized by governments as weapons for propaganda and more countries are seeking “cybersovereignty” to suppress foreign ideology and impose cultural protectionism.

The politicization of cyberspaces will have far-ranging consequences on the tech industry. For long Silicon Valley has enjoyed the financial benefits of free internet distribution in a pro-globalization world. A startup working out of a garage in Mountain View has been able to access an expanding global market of online consumers, generate more revenue worthy of higher valuations and increase wealth in the national economy (via venture capital returns). As a result, US entrepreneurs have been able to raise millions on a globalization dependent narrative. Uber (in contrast to Lyft) took on a globalization strategy of rapidly expanding internationally to justify its much higher valuation similar to Notion which only receives 18% of its web traffic from the US (#2 being China with ~9%). As more countries and territories like the EU choose a protectionist digital policy to contain consumer spend leaving its borders, we will see more tech companies with globalization dependent growth experience a severe correction.

Where do we go from here? The answer seems clear: to an internet divided into regions, with access passports and specific rules. Exactly the opposite of its original design. It starts with politics, follows with religion and culture, continues with the alleged dangers… and ends with intolerance. Apparently, the dream of the internet was too beautiful and radical for our world.

 

 

 

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The “Three Token Pillars” portfolio is democratically proportioned between the Three Pillars of the Token Economy & Interchain:

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The Second Phase of the RSC Community Portfolio V3 was to give us a general idea of the weightings people desire in each of the three pillars and also member’s risk tolerance. The Third Phase of the RSC Community Portfolio V3 has us closing in on a finalized portfolio allocation before we consolidated onto the highest quality projects.

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The “Top Ten Crypto” portfolio is a democratically proportioned portfolio balanced based on votes from members of the RSC community as to what they believe are the top 10 projects by potential.
 
This portfolio should be much more useful given the ever-changing market dynamics. In short, you rank the projects you believe deserve a spot in the top 10. It should represent a portfolio and rank that you believe will stand the test of time. Once we have a good cross-section, we can study and make an assessment as to where we see value and perhaps where some diamonds in the rough opportunities exist. In a perfect world, we will end up with a Pareto-style distribution that describes the largest value capture in the market.
 
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SoV/money == BTC, DCR
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