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The plot to replace the internet

'Ethical hackers' in Fulham think they have a way to make your online life truly private, secure and anonymous. The world will be very different if they succeed

28 March 2015

9:00 AM

28 March 2015

9:00 AM

The internet has changed its character dramatically several times over its short life. It started in the late 1960s as a military project, morphed into an academic network in the 1980s and was transformed into a vehicle for commerce in the 1990s, before being invaded by social media in the 2000s. Now it’s on the verge of a change that puts all the others in the shade.

An alternative way of organising the internet is being built as we speak: an internet where no one is in control, where the government can’t find you or shut you down, where big tech companies aren’t able to learn everything about you. A decentralised net that is both private and impossible to censor.

This revolution is being plotted in snazzy offices just off Fulham High Street in south-west London — not what I was expecting, since you associate hackers with hoodies, basements and graffiti. But the Ethereum project isn’t a typical hackers’ collective: it received around $12 million of crowd-funded support when it was founded a couple of years ago, by a 20-year-old Russian-Canadian programming wizard called Vitalik Buterin. That’s been enough to hire 40 of the smartest geeks you’ll ever meet, and house them in comfort in Amsterdam, Berlin and London.

‘Welcome to Web 3.0,’ says Vinay Gupta, a hacker-cum-poverty-activist who’s part of the Ethereum team, as I arrive. Web 1.0 was all static websites. Web 2.0 was interactive social media platforms like Facebook. This third iteration is about encrypted peer-to-peer networks. It sounds dry, but Ethereum — which is launching part of its software this spring — has London’s tech crowd purring. Last year it won the World Technology Award for IT software. IBM has already used it to build a washing machine that orders its own soap.

But these people aren’t in it for the money. Ethereum is an open-source project which is available to everyone, and its employees will slink off when the project is complete. They’re doing it because they want to transform the internet — and, by extension, society.

In practical terms Ethereum does two things. First, it’s what Vinay calls ‘deep infrastructure’. It’s building a new web out of the spare power and hard-drive space of millions of connected computers that its owners put on the network. What they say of the brain is true of your computer — you only ever use a small amount of it. Ethereum links all that spare power and space and allows
people to build apps, websites and software that other users can access. Because it runs with strong encryption and the network is ‘distributed’ across all those individual computers, it’s more or less impossible for anyone to censor or control what’s on it.

Second, it allows people to create immutable, public transaction records. (Bear with me on this: it’s very important.) The problem with digital records is that they can be copied and so are not really owned by anyone. Borrowing the idea from the digital currency bitcoin, Ethereum uses something called a ‘block chain’ to record information on a public database in a chronological way that prevents copying, tampering, fraud or deletion. It’s a new anonymous, decentralised, uncensored internet, and a new way of controlling and storing information. This is why the tech crowd are excited.

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Ethereum is one of many initiatives trying to change the way the internet works, making it easier to prevent censorship, monitoring or control (another is called MaidSafe, based in Scotland, which works to similar principles). Many people have been stirred by Edward Snowden’s whistleblowing or by growing unease about the creeping power of Google and Facebook.

When you open a browser and surf the web it feels seamless, but there are invisible rules and systems in the background: domain name servers, company servers, routing protocols, security protocols. This is the stuff that keeps the internet going: rules that route your request for traffic, servers that host that web page you’re after, systems that certify for your computer that the site you’re trying to access isn’t bogus.

All these little stages and protocols create invisible centres of power: governments who can monitor what you do; big tech companies that collect all your data in large centralised servers and sell it; invisible US-based regulators exercising control over what happens on the net. People are getting worried. Andrew Keen, in his new book, The Internet Is Not the Answer, reveals how a tiny sliver of insanely rich Silicon Valley adolescents are capturing the world’s wealth by snaffling up all your data. Public concern about online privacy is on the up. More people are using tools and techniques to cover their digital tracks — heading to the so called ‘dark net’ where surveillance is difficult. And then there are the people like Vinay who think the answer lies in redesigning the whole damn thing so it’s less centralised and harder to control.

Ethereum supporter Jessi Baker
Ethereum supporter Jessi Baker

Greater freedom online will have vast consequences in the real world. Take the Tor web browser — originally a US Navy research project and still funded by the State Department — which allows its users to surf the web without revealing their location. It has had a hugely beneficial effect on free expression around the world, and played a pivotal role in the Arab uprisings. In 2011 it won the Free Software Foundation Award because it has allowed millions of people to access the net while retaining control over their privacy. And it’s not just in dictatorships that privacy matters. In most democratic societies, privacy creates a sphere of freedom for the individual, which allows for political, social and personal expression.

In this sense, Ethereum is artillery in the running battle between technology and governments. The Ethereum team seem like a leftish anarchic bunch, but the idea that the internet could secure a libertarian utopia by rendering man-made law redundant has always appealed to internet pioneers. Doesn’t Ethereum undermine the ability of democracies to manage their societies? Vinay sees it the other way around: ‘Democratic societies are stifling free expression. Democracies generally have constitutions to protect political rights that no law can ever cancel, and I see these technologies as a way to guarantee the rights we already have. We are maintaining the status quo of, say, reasonable expectation of privacy in letters, not creating some kind of new pirate utopia.’

Perhaps. Technology has always created naive expectations which are usually disappointed. When the internet went mainstream in the early 1990s there was a blaze of optimism about humanity’s imminent leap forward, spurred by connectivity and access to information. Harley Hahn, an influential technology expert, predicted in 1993 that we were about to evolve ‘a wonderful human culture that is really our birthright’. Nicholas Negroponte — former director of the illustrious MIT Media Lab — declared in 1997 that the internet would bring about world peace and the end of nationalism. How’s that been working out, guys?

The frustrating truth is that the baddies are often enthusiastic adopters of anything that can help them avoid getting caught. According to researchers at the University of Luxembourg, 44 per cent of websites on the dark net — which is accessed using the Tor browser — deal in illegal pornography and drugs. Serious child pornographers use encryption and anonymous browsers to stay one step ahead of the law, making it more or less impossible to rid the net of their images. Terrorists keenly follow the growth of difficult-to-censor networks: Isis now routinely shares information about the best way to dodge government surveillance using tech designed for journalists — which is one reason its propaganda is always online. It’s inevitable that Ethereum or Maidsafe or anything like them will make the job of policing the internet far more difficult than it already is. That’s not the inventors’ fault, and it’s not scaremongering. It’s just the way of things.

But for all this talk of terrorists, whistleblowers and libertarian dystopias, Vinay reckons Ethereum will benefit the typical Spectator reader as much as a Syrian freedom fighter. There are lots of bad people doing bad things online: conmen trying to part you and your bank details, internet trolls trying to bully you, hackers trying to take control of your computer. Anything that helps create a secure network is a good thing.

One person who’s spotted the beneficial potential of Ethereum is Jessi Baker. She was working on her computer science PhD in supply chain data when she heard about block chains and Ethereum, back in 2013. She took a break to found Provenance to offer what she calls ‘block chain-powered product histories’. The idea is simple: give people a way to see how the things they buy are made. Provenance, a small team based in north London armed with angel investment, plans to use Ethereum to make opaque supply chains transparent.

Imagine you want to buy a diamond, but not of the blood variety. With Provenance your freshly mined rock would be given a unique digital ‘tag’ (a very long number) which is put in the Ethereum block chain. Each stage of the production process would then be recorded under that tag in the block chain record — it could be a certificate, a photograph, a piece of text, a contract — in chronological order, with each new addition verified by someone at the next stage of the process. By the time it reaches your finger mounted on a gold ring, you also get a record of the diamond’s entire life. Far better than a flimsy certificate or a fair trade stamp — both of which could be added to this block chain anyway — this is a mathematically perfect, immutable record for the ages.  Provenance is starting small with a dozen or so of what Jessi calls ‘good suppliers’ who want to demonstrate to customers how their products are made and workers are treated, including a fashion retailer whose supply chain spans the globe. But who knows where next? If the frozen food company Findus had used Provenance, we’d have known exactly where, or what, that lasagna meat had come from. Palm oil? Supermarket produce? Perhaps even refugees?

It’s difficult to predict where this will all end up: the evolution of the net is immune to forecast. The early 2000s saw several similar efforts at peer-to-peer software which never quite took off. But the combination of new technology and public demand make this a step-change in the internet’s endless evolution. Vinay thinks the big social media companies will feel the pressure, because someone will set up a social networking site on Ethereum that doesn’t collect your data, perfect for privacy-conscious users. Then there’s all the online marketplaces. When you buy something on eBay or Airbnb, a cut goes to the company for facilitating the transaction. A handful of programmers are planning to build an online marketplace on Ethereum where buyers and sellers can connect without a third party and their commission. Vinay also has estate agents in his sights. With Ethereum, you could create an immutable record of your house deeds, and then simply transfer them over to a buyer using encryption verification. As someone who’s dealt with their Kafkaesque administrative costs, I find this idea hugely satisfying.

It feels like Ethereum is pushing us closer to the future: a world where technology becomes more powerful, and by extension, so do all of us who wield it. There are great challenges ahead: 3D printing, drones, artificial intelligence, biological weapons being produced on DNA synthesisers. ‘We’re going to have to deal with a world in which there is unbelievably powerful technology on every front,’ explains Vinay, who looks far less worried than I do. The truth is that no political party has the foggiest idea what to do about any of this. Neither does Vinay, although he admits that ‘how we deal with information will have to change dramatically. Ethereum will force us to respond sooner’. So what’s a best-case scenario, I ask before I leave. ‘By the end of the year, we’ll be responsible for 5 per cent of the world’s internet traffic.’ And the worst? ‘Someone else will have done what we’ve done, only better. Either way, it’s going to happen.’ I’m unsure whether to be excited or terrified.

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Jamie Bartlett is the author of The Dark Net

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Show comments
  • https://ethereum.org Konstantin

    Great read. My only comment is that calling Ethereum a team of “‘Ethical hackers’ in Fulham” is incorrect. The team is mostly based in Berlin, Germany with a small communications hub in Putney

  • http://www.ursium.com/ Stephan Tual

    If you’re interested in further reading on this ‘decentralized web’ – Gavin Wood (Ethereum’s lead developer and CTO) distilled his vision for the project in April 2014 at http://gavwood.com/web3lt.html. Although it’s a year old, it’s still a very relevant – and visionary – read. I myself authored a series of non-technical use cases at https://medium.com/@ethereumproject/ethereum-a-social-operating-system-4790bf5f7743

  • http://karybee.com/ kary bheemaiah

    Ethereum’s decentralized processing infrastructure is an evolutionary step in distributed computing since TCP/IP. When Vitalik first described it on Bitcoin magazine, it was portrayed as a platform for Decentralized Apps (DApps). But as the project nears completion and as the scripting language becomes Turing complete, the platform is no longer just a decentralized way to communicate, but also a way to exchange value without any 3rd party intervention. It is quite possible that in a few years time MIST will be as popular as Chrome. This shows how cryptocurrencies have evolved over time and that the true invention is the Blockchain and not just Bitcoin/Alt-coin , etc. In spite of all this progress, schools are yet to teach about it and focus mostly on the digital currency aspect. For a simple introduction to the technicalities,the jargon and the future possibilities, check out the following video, where I have done what I can to explain it in simple terms: https://youtu.be/xWb168iMJmA.

  • Provenance

    If you’d like to find out more about Provenance, please visit provenance.org

  • http://www.BIGbtc.ca Merchant Integration

    Well researched and written. One salient comment ” The truth is that no political party has the foggiest idea what to do about any of this.” is an understatement. Decentralization is revolutionizing the worlds financial systems and has governments scrambling to understand how in 5 short years, Bitcoin and the Blockchain has changed the rules.

    The author does not make clear that without Bitcoin and the Blockchain, there would be no Ethereum. Without Bitcoin, there would be no $15 Million cash raised to fund development of Ethereum.

    I met my fellow Canadian Vitalik Buterin at the Miami Bitcoin Conference in January 2014. At a controversial and standing room only track he introduced Ethereum and in some discussions suggested the “ether” coin was only weeks away. At that time I wasnt convinced Ethereum was anything but another “doge coin” but as time went on and the Toronto Meetups gained momentum (with everybody and their brothers claiming to be Ethereum co-founders) I saw the potential. Hackathons bringing great ideas like Airlock – smart contracts for opening locks, – a perfect fit for AirBNB.

    Other great web 3.0 technologies are going unnoticed and MaidSafe is one. Raising $6 Million USD in 5 hours (bitcoin and mastercoin), one of the first real crypto-crowdfunded IPO has the potential (and some interesting patents) to unseat Cloud Storage behemoth DropBox as the go-to decentralized data storage service.

    It remains to be seen how well Ethereum and its underlying currency Ether will fare and its been established that early 2015 we will see the launch of Ethereum but one thing is for certain decentralization is here to stay.

    Good luck Vitalik and Team Ethereum

    BIGbtc ca – Bitcoin Integration Group – Toronto, Canada

  • OneMillionGateways

    Ethereum is a platform, that makes it whatever you want it to be…

  • https://twitter.com/Matthijs85 Matthijs

    “The truth is that no political party has the foggiest idea what to do about any of this.”

    Maybe you should learn about the Pirate Party? Decentralization basically is our core principle. More info:
    http://falkvinge.net/pirate-wheel/
    http://www.pp-international.net/
    http://www.newsweek.com/pirate-party-now-icelands-biggest-political-party-315068

    Or feel free to contact me :) matthijs@piratenpartij.nl

    • Ivan Ewan

      I voted for you guys at the 2010 GE. I hope you get a lot more votes this time round!

    • http://www.worldhouse.org Curtis Faith

      Vinay is very looped into the Pirate Party in London. He knows Falkvinge, I’m pretty sure. So don’t read into his comment that he isn’t aware of you.

    • http://www.ursium.com/ Stephan Tual

      I have a signed copy of Rick’s book in my house, so don’t worry, we’re fully aware of the PP :)

  • JamesDonnyT

    The challenge of a purely peer-to-peer world is trust.

    Let’s take the ebay example. Yes, they charge a fee. But they also give you reason to trust that your transaction will be honoured. What you’re paying for is effectively insurance against bad faith on the part of the person you are dealing with.

    In some regards, the block chain acts as a trust repository for Web 3.0 – but I expect we will find that there is still room for ebay-like agents in the brave new world.

  • Ivan Ewan

    Ethereum. It’s got a bit of a cyber-punk attitude. I like that. When governments and corporations overreach their boundaries and make us feel like mice in a maze, it’s only fair to have the rug swept from under them.

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