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The State of the Decentralized Web (DWeb): Key Industry Insights

The decentralized or distributed web (DWeb) is widely slated as the natural evolution of the web thanks to its potential to claw back power from the centralized entities that currently…

The post The State of the Decentralized Web (DWeb): Key Industry Insights appeared first on CoinCentral.

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The decentralized or distributed web (DWeb) is widely slated as the natural evolution of the web thanks to its potential to claw back power from the centralized entities that currently dominate the internet landscape and return it to us—the users. 

A recent paradigm shift has seen users demand control of their data, while an incredible uptick in open-source developments has given rise to a medley of technologies like Tor, BitTorrent, and blockchain, which many see as the fundamental building blocks of the DWeb. 

To better understand the current state of this rapidly emerging set of technologies, we at Fluence took up the task of surveying more than 600 individuals, two-thirds of which cited a direct tech background, and 231 were actively working on DWeb projects. From these responses, we distilled some interesting and sometimes sobering insights and opinions about the current states of the DWeb. 

Editor’s note: The following article is a guest post from Evgeny Ponomarev of  Fluence Network and Polygrowth.io. The article frequently references a 2020 Decentralized Web Development Report by Fluence Network. 

As with many potentially disruptive technologies, a great deal of work usually needs to go into building out a variety of other precursors, and synergistic technologies before the full capabilities of a newer technology are entirely made clear. 

Source: Fluence Decentralized Web Report 2020

Source: Fluence Decentralized Web Report 2020

This is undoubtedly the case with the DWeb, which will likely be formed from a wide array of accessory technologies, which might include P2P communication protocols, privacy-focused networks, and decentralized DNS, among others. However, many of these are still in an early stage of development, while some significant technical challenges for the DWeb are yet to be solved.

dweb study

More than half of survey respondents agreed that P2P file sharing, content-addressable storage, and P2P communication protocols would be necessary to achieve DWeb. Conversely, this figure drops to just 40.5% for data-ownership protocols like Solid and 35% for blockchain.

Despite this, similar to the results of our 2019 Dapp Survey, almost half (44%) of those in the DWeb sphere highlights a lack of documentation and learning resources as the most frustrating thing about DWeb tech. This was closely followed by the difficulties involved in applying (42%) and integrating (40%) the technology. Curiously, a small minority of respondents (11%) believe the technology simply doesn’t work. 

Nonetheless, some current open-source DWeb projects have managed to gain significant traction among respondents—of these, IPFS and Ethereum are used by 36% and 25% of respondents respectively, whereas Dat (14%), ActivityPub (13%), WebTorrent (12%), and Libp2p (12%) also stand out as popular platforms and protocols for DWeb development. 

Overall, like many emerging innovations, technical challenges combined with the simple fragmentation of resources and information make up the majority of the issues faced by DWeb developers. 

Although technical challenges are a significant obstacle to the development and growth of the DWeb, around 70% of respondents believe that a general lack of user understanding is another significant roadblock. Comparatively, 49% believe that tech immaturity is one of the biggest obstacles, while 42% cited the resistance from tech giants as one of the biggest obstacles moving towards the DWeb. 

decentralized web

Scaling further in, we asked projects about their challenges in achieving mass user adoption, to which 59% cited a lack of maturity, 35.5% found it challenging to onboard and educate new users, and 24% believe the low number of total DWeb users is a significant factor. One respondent puts it like this:

“The biggest barrier to adoption is making the tech easy to use. Right now, for non-techy people, it’s difficult even to understand what DWeb is, let alone use the tech.”

These challenges might explain why many DWeb products have failed to achieve significant user adoption, with only 2% of 228 respondents saying their project has between 10,000 and 100,000 monthly users. In comparison, 35% haven’t launched yet, and around 21% have under 100 monthly users.

Although growing pains are to be expected with new technologies, challenges resulting from complicated user experiences and stiff competition from more fleshed out centralized options have proven to be significant obstacles to growth. 

While a one-size-fits-all solution to the challenges of developing the DWeb would undoubtedly be a welcome development, the issues are so multiplex that this is unlikely to be the case. 

Instead, our survey indicates that 75.5% of respondents believe data sovereignty issues with the current web implementation should be tackled first. In comparison, data privacy (59%), tech resilience and resistance to interruption (56%) and security issues (51%) were also popular picks for the first lines of development. 

These results fit firmly with the burgeoning narrative of users increasingly looking to take their privacy and security into their own hands, shunning the data mines and centralized hubs that underlie many of the biggest gripes with the current web—such as censorship, covert data monetization, and privacy abuse. 

Though blockchains represent perhaps the most versatile peer-to-peer system in current usage and are frequently touted as the solution to data privacy, interference, and centralization concerns suffered by many systems, the majority of survey respondents (58%) believe that the technology isn’t a silver bullet solution to the challenges associated with the DWeb.

decentralized web

Opinions of the blockchain from the study.

Nonetheless, we found that many respondents do believe blockchain has its uses, as 54% agreed that it’s useful for decentralized currency, 36% said it’s useful for decentralized identity applications, and 33% believe the technology has a variety of use cases related to the DWeb. 14% believed that blockchain is a “waste of time.”

This tells us that there is still a stark divide on the potential of blockchain—a technology that remains unproven in many aspects but still widely lauded as the future of many industries. Two quotes we received perfectly sum up the wildly contrasting opinions of our respondents. 

“Interesting solution, but not practical due to its massive energy needs. It also does not scale!” said one respondent. “Possibly useful for P2P systems where people can contribute resources (e.g. storage) to a pool or pay to use it,” said another. 

We found that the business models surrounding the DWeb remain one of the major hurdles for developers, many of which have struggled to identify a viable way to monetize their projects.

decentralized web

Decentralized web report

Overall, only 15% of respondents cited their project included a paid product, whereas just 1% gets by with advertising revenue—drastically different from that seen by centralized data monetization methods. Instead, a whopping 30% do not extract money from their project at all and a further 22.5% plans to figure out monetization at a later date.

Accordingly, more than half of these Decentralized Web projects are self-funded, while almost a fifth are VC/Angel funded.

All-in-all, though it is clear that there is a great need for DWeb technologies and significant support lying in wait, a range of technical hurdles, UX challenges, and roadblocks will need to be addressed to truly compete with the simplicity and functionality offered by the centralized models in popular usage today. Nonetheless, the vision of DWeb is certainly one worth pursuing, and the foundations are slowly, but surely being laid today.

Source: https://coincentral.com/state-of-the-decentralized-web-2020/

Blockchain

Shiba Inu’s days in the sun may be over; here’s why

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In a market full of investment-worthy coins, there are a few meme-coins such as Shiba Inu that do not offer much value, be it in terms of use-case or a strong network. Thanks to its strong community though, SHIB managed to surprise the entire crypto space.

However, it seems the community is not what it used to be anymore.

Shiba Inu sees a dump

On September 16, SHIB got listed on Coinbase pro, and people went into a frenzy. The meme-coin witnessed a 28.87% growth in 1 day.

This is the highest single-day growth since May and even then, SHIB could not breach its long-established resistance level of 0.00001010. SHIB has been stuck under it since May.

Shiba Inu’s price rose by 28.8% 48 hours ago | Source: TradingView – AMBCrypto

But that did not stop the SHIB supporters from reacting strongly. Within 48 hours, over 6.04 trillion SHIB was bought out of the market, figures that were last seen on July 26. This further led to the supply on exchanges falling to a 4-month low.

Shiba Inu’s supply on exchanges at a 4-month low | Source: Santiment – AMBCrypto

Why you should stay away from SHIB?

This kind of behavior is the exact reason why SHIB is an untrustworthy asset because it is literally treated like a pump and dump asset. The instances observed yesterday are similar to what we saw at the beginning of the July rally.

Its own community does not take it seriously and only appears during a price rise to cash out as much as possible. Active addresses and transaction volumes remain dormant and pretty low, regularly, and rise only when there is a price rise.

Shiba Inu’s transactions volumes | Source: Santiment – AMBCrypto

In fact, long-term holders cash out at the first sign of profits, too. Yesterday over 3.3 quadrillion coin days were destroyed, levels similar to which were earlier noticed, in July, showing the movement of old coins. If they had kept their holdings instead, the price would have remained stable.

Shiba Inu’s coin days destroyed | Source: Santiment – AMBCrypto

Adding to the pump and dump narrative, is the fact that in less than 24 hours, MVRV fell. Down from the strength of 2.0 into the negative zone at press time.

Shiba Inu’s MVRV in the negative zone | Source: Santiment – AMBCrypto

Simply put, there is no real value coming into the coin from the very loyal SHIB community as of now. However, due to its fanbase and hyped DOGE, it will keep blipping on the crypto radar every now and then.

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Source: https://ambcrypto.com/shiba-inus-days-in-the-sun-may-be-over-heres-why

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Blockchain

Making sense of Solana’s ‘extremely rapid’ growth

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When Solana experienced a crash right after hitting a new all time high on 9 September, traders and experts tried to make sense of the event. On “The Best Business Show,” investment expert Anthony Pompliano interviewed Kyle Samani, co-founder and managing partner at Multicoin Capital, to discuss the rising star-turned-meteor, that Solana has turned out to be.

From 4 cents to over $200

Pompliano began by discussing Multicoin Capital’s investment in Solana. He calculated that the initial investment had gone up roughly 3750 times since the initial round, when one SOL had been at $0.04.

For his part, Samani said,

“Solana today is growing at an extremely rapid pace. Users being on-boarded, assets being issued, stablecoins going into it – all of these things. Look at the last nine days: it’s just a vertical line from, call it a billion in assets to like 10 billion.”

While listing out possible factors for Solana’s success, Samani cited Solana’s speed and network, its NFT platform Metaplex, the rise in SOL’s price, and the stablecoins issued.

Network > Price

Inevitably, Pompliano brought up Solana’s crash – though he admitted calling it so was “hilarious,” in the context of the alt coin’s growth. However, Samani’s answer was a surprising one. He claimed that he tried to ignore prices and didn’t refer to Coin Gecko or Coin Market Cap. Rather, he preferred to focus on Solana’s network and its growth. He further explained,

“Our time horizon is measured in years, not weeks or months. So the question we will always ask ourselves, is you know, is this network compounding at a sufficiently fast rate? And if you really go dig into developer activity, user on-boarding, dollar flow in the system. . .all of those things right now are compounding at an astounding rate and I don’t think that’s going to slow down.”

Furthermore, the following infographic presents data on Solana transfers.

Could Solana kill Ethereum?

Samani spoke about Metaplex and how the NFT platform came during the NFT Boom of summer 2021. He noted Ethereum’s high gas fees and how many users saw Solana as a faster alternative. Even so, Samani admitted that he thought it was “improbable” for Solana to displace Ethereum. Instead he suggested the two would likely co-exist.

Samani also addressed a common criticism aimed at Solana, regarding the its centralized nature, due to the number of validators and the expensive hardware required to run it.

Samani called the criticism “valid” but “irrelevant,” pointing out that the trade-off meant better performance for users, reiterating the network’s rapid growth.

At press time, there were between 974 and 1000 validators on the Solana mainnet. Samani’s assessment of the alt coin was simple but memorable. He said,

“I don’t think there’s going to be another Solana.”

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Source: https://ambcrypto.com/making-sense-of-solanas-extremely-rapid-growth

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Will Bitcoin make a pitstop at $85,000, before racing to $100,000

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Even though Bitcoin has been making no major moves of late, the market’s bullishness on the coin continued making headlines, and all for the right reasons. After all, the king coin surprised the market before, with massive its moves that rendered skeptics silent. 

Bitcoin to $100K, by the end of the year is a much-anticipated move by the market. As we enter the last quarter of this year, Bitcoin is expected to push towards that major psychological barrier. However, even though Bitcoin presented a solid recovery from the May crash, at the time of writing, the effects of the September 7 flash crash hadn’t completely worn out. 

Nonetheless, as BTC presented around 3% daily gains and traded at the $48.5 level at press time, the market once again eyed BTC for some major moves. But before Bitcoin actually makes a move towards the $100K, its last stop would be the $85K mark which will confirm an upward move to $100K. 

The above observation was part of a market report by trading platform Decentrader ,which presented bullish signals in the near term, for BTC. It presented how we it could be setting up for a major run that first reaches $85,000 before breaking through the psychological barrier of $100,000, thereby making for an explosive Q4 2021. 

BTC looking hyper bullish 

In spite of BTC trading below $50K throughout the week, on-chain metrics have led analysts to stay bullish on Bitcoin price action. A report stated that the constantly decreasing supply of BTC on exchanges put upwards pressure on price in the medium term. With demand increasing as supply reduces, the price would go up. 

Further, another factor that contributed to Bitcoin’s bullish mid-term trajectory was its SOPR which presented a similar trend to the months that followed the March covid crash. After the summer crash where SOPR was heavily printing green candles, some minor selling at a loss was observed on this pullback from $50,000 too. Thus, SOPR flashed a sort of buy-the-dip opportunity as final sellers get flushed out before it moves higher, as was observed in Q4 2020. 

Additionally, Active Address Sentiment Indicator had reset with price change lower than active address change. With a pullback in prices alongside constant network growth, the market will look to catch up with network growth by noting price gains. 

Thus, the report presented a hyper-bullish possibility of Bitcoin reaching $85K by the end of Q4. However, Bitcoin’s options market didn’t look too big on gains at the moment with funding rate flashing negative signs. Further BTC’s global open interest by expiry indicated year-end expectations of around $65K which is almost $20K less than the target of $85K. 

So, is $100K too far?

Well, not really. The reason being that, from the July local low of around $30K Bitcoin registered almost 75% gain to reach the multi-month price high of over $52K. Notably from the current consolidating prices, another 75% price gain would land Bitcoin to $85K. So a rally like that over the next three months won’t be a big surprise. 

Thus, while BTC was consolidating, a squeeze upward should characterize the remainder of this year, similar to events from 2020. 

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Source: https://ambcrypto.com/will-bitcoin-make-a-pitstop-at-85000-before-racing-to-100000

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