How Decentralized Is The Internet?

The State of the Internet

In the digital asset industry, we often talk about how crypto and the Web3 space have developed so far and how they make finance and digital services more accessible for people.

Indeed so.

Public blockchains like Bitcoin, Ethereum, and Solana can easily be accessed by anyone, no matter where they live, how much they earn, their employment status, or whether they have a bank account or the documents to create one.

A compatible device – a smartphone, a desktop computer, or a laptop, for example – is needed along with a relatively stable internet connection to join a blockchain ecosystem and utilize the plethora of dApps within.

Given the minimal requirements and how easy it is nowadays to get one, most crypto users won’t likely face any device-related problems in terms of accessibility.

On the other hand, recent world events – such as regional outages in Ukraine amid its conflict with Russia and a volcanic eruption in Tonga causing a cut-off from the web for five weeks – highlighted how fragile local internet infrastructures can become in times of crisis.

At the same time, the rapid development of technology offered states and large corporate players the tools to increase their control and oversight over internet users.

Now, the question is: even if we have a perfectly permissionless money in the form of Bitcoin or another cryptocurrency, how decentralized and resilient is the internet that is needed to access it?

Let’s find out by exploring how the internet evolved throughout the years and where the current infrastructure is standing now in the field of resilience and decentralization.

The Road to the Modern Internet

To understand our topic, it’s essential to travel back in time to the early years of the internet.

As we have already explored how the World Wide Web evolved from Web 1.0 to Web 2.0 and how it is currently transitioning to a decentralized Web 3.0, we will put more focus on the infrastructure-related developments from the inception of the internet to modern times.

Where It All Started

As its name suggests, the internet is a global system of interconnected computer networks that utilize the TCP/IP protocol (also known as the internet protocol suite) to communicate between the various (sub)networks and devices within the ecosystem.

With its history dating back to the 1960s, early forms of the internet like the US Department of Defense-Funded ARPANET featured very small ecosystems that could only be accessed in a few countries at first. In fact, only 12 computers and 75 terminal devices were attached to the UK-based National Physical Laboratory’s NPL network project between 1969 and 1976.

Between the 1960s and 1980s, numerous local “internets” were in operation, which finally merged under the World Wide Web in 1989 thanks to the work of Tim Berners-Lee, who is considered the inventor of the WWW.

After 1989, the internet ecosystem has gone through significant development, attracting nearly 5 billion users – around 62.5% of the global population – around the world by January 2022.

During this period, the web has evolved from being an exciting new technology and the hobby of a small group of early adopters to what most of us utilize today for numerous activities within our everyday lives. This can include anything from work, entertainment, news, communication, and learning to sharing memes and topics with friends.

At the same time, 4.62 billion users are active on social media platforms like Facebook, Instagram, Twitter, and TikTok. Utilizing a wide variety of devices (e.g., smartphones, laptops, smart TVs), a great share of the world’s population can conveniently access fast broadband internet in their homes and workplaces as well as public WiFi and mobile networks on the go.

From Dial-Up to Broadband Internet

Many years ago, it wasn’t as easy to access the internet as today. In fact, there were only 16 million global web users – 0.4% of the world population- in December 1995.

Throughout the 1980s and most of the 1990s, one of the most common ways for users to access the internet was through their computers or workstations via dial-up connections.

This method seemed extremely convenient for internet service providers (ISPs) at the time. It required the usage of the telephone network (that has been widely available) and a few devices, such as modems and servers used to make and answer calls.

On the other hand, dial-up connections were super slow (with a theoretical maximum transfer speed of 56 kbit/s). At the same time, they were rather unstable since they utilized the phone line to modulate digital data into an audio signal and transfer it to a receiving modem that would demodulate it to digital data.

Furthermore, just like with regular phone calls, dial-up connections were not continuous, as ISPs had to terminate them to free up access for other people.

The increased popularity of broadband internet was where the development of the internet’s infrastructure really took off. Unlike dial-up, broadband offers continuous access to the internet along with much higher speeds and reliability by transporting multiple signals at a wide range of frequencies and traffic types.

However, while its predecessor utilized an already built-out operating infrastructure in combination with their own, ISPs had to dedicate their resources to establish a framework from the ground up for connecting users to broadband internet.

A medium, such as coaxial cables, optical fiber, wireless internet via radio waves, twisted-pair cabling, and satellites, has to be utilized to establish a connection between users’ homes, workplaces, or other premises and the internet service provider.

At the same time, ISPs and other participants of the internet ecosystem utilize highly reliable and high-bandwidth mediums like optical fiber to connect their networks with many others – and the billions of people within them.

How Do We Connect to the Internet?

Now, as we have briefly explored how the initial version of the internet evolved into a massive, interconnected network that serves billions of people, it’s time to see the technologies we can use for connecting to the web.

To be more precise, this is how our ISP provides us access to the internet, along with the required devices and mediums for us to establish a web connection. Numerous technologies can be utilized in this field, such as:

  • Fiber-to-the-premises (FTTP): As of today, optical fiber is considered the most efficient medium for data transfers that is in widespread usage. With FTTP, the fiber optic cables are laid all the way to the premises, which ensures high-speed internet for users that typically range between 1 Gbit/s and 10 Gbit/s. Overall, FTTP offers ISP customers the best performance and convenience but at higher prices and with limited availability.
  • Mobile (4G/LTE, 5G): While FTTP is among the best ways to maintain a fixed connection to the ISP, it’s not an efficient way to surf the net on the go. And that’s why service providers have developed their own mobile broadband networks, typically through 4G/LTE or the relatively new 5G technology. Delivered through cellular towers, users can connect to mobile networks via their smartphones, tablets, laptops, and other digital devices that feature built-in portable modems.
  • Cable internet: Similar to how dial-up utilizes the telephone network to establish a connection, cable internet leverages the cable television infrastructure to connect users to the worldwide web, with coaxial cables used as the medium. While this type of service tends to be slower than FTTP, it is usually more widely available and costs less than fiber.
  • Satellite internet: In rural areas and places with natural barriers (e.g., mountains, bad weather, etc.), it is very difficult and expensive to establish a wired internet infrastructure, such as FTTP, cable internet, or even dial-up or DSL. Here, satellite internet is the best – and often only- option for users who utilize a satellite dish to access the web by establishing a connection with ISP’s satellites orbiting the Earth. While traditional forms of satellite internet are considered slow and expensive, providers like SpaceX’s Starlink leverage modern technology and a massive number of low-earth orbit satellites to offer higher speeds at a reasonable price for their subscribers.
  • Digital subscriber line (DSL) and its variants (ADSL, VDSL): Despite the rapid technological development and the increasing share of FTTP and cable internet, many internet users still utilize telephone lines to access the web via DSL-based services of ISPs. However, unlike dial-up, digital subscriber lines feature continuous broadband internet access, with the bit rate of consumer services reaching as high as 100 Mbit/s. While it is much slower than most options, and you have to be located relatively close to your provider to maintain a stable connection, DSL is available in most places and is by far the most affordable option for users.

No matter the type of internet service you utilize, some form of data communications equipment is required to establish a connection with your ISP. In most cases, this is usually a modem or a network terminal connected to the service provider’s infrastructure via a medium like optical fiber used for sending and receiving packets.

For fixed wired internet, you also need networking hardware, such as an ethernet cable that you can use to connect your devices to a modem or a router. The latter is a piece of equipment responsible for routing traffic between the internet and the devices in your home. At the same time, most routers also allow you to connect wirelessly to the web via local WiFi.

Importantly, your network, a public IP address assigned to your router, and all your devices (private IP addresses for all your internet-connected devices) within are given their own IP addresses via the Internet Protocol. IP addresses are unique numerical identifiers that contain location information and allow devices to communicate with other interconnected devices on the web.

For these reasons, it’s a crucial element that provides the necessary framework for transferring data between different networks and devices connected to the internet.

The Internet Infrastructure and its Resilience

In the previous section, we have explored the various technologies your ISP can utilize to get your home online and how you can access the internet via your devices.

Now the question is: how do internet providers access the web in the first place, and how resilient is their infrastructure?

The Internet Backbone: The Heart of the Web

As discussed earlier, the internet consists of numerous smaller networks linked together as part of one huge infrastructure on our planet (and even in space via satellites).

The core of this infrastructure is the internet backbone that links together the largest and fastest networks providing the most coverage for citizens worldwide. In some way or another, your ISP leverages this backbone to connect your home and several others to the web.

Interestingly, the core providers of the internet backbone are also ISPs. However, unlike those that provide services directly to consumers and smaller organizations, backbone ISPs are on the highest tier (Tier 1) of the web ecosystem.

Tier 1 ISPs operate massive networks that reach numerous countries across the globe. Featuring their own high-speed infrastructure using fiber optic cables – on land and even underwater –, Tier 1 carriers rarely provide services to end-users. Instead, they serve Tier 2 ISPs.

Most importantly, Tier 1 ISPs are so large that they do not have to pay Tier 1 ISPs for routing traffic over their networks. Instead, they sign peering agreements with providers on the same level to interconnect their ecosystems and extend their reach. On the other hand, they charge Tier 2 ISPs for transmitting data via their infrastructure.

Providing services on either a regional or a national level, Tier 2 ISPs are the most common internet service providers that sign settlement-free peering agreements with other Tier 2s and purchase access to Tier 1 networks at the same time.

Finally, Tier 3 ISPs are the ones that directly connect consumers and some organizations to the web. However, unlike the ones on the higher levels, Tier 3 providers do not have an infrastructure of their own. Instead, they purchase IP transit from Tier 2 services and are responsible for establishing the connection leading to consumers’ homes or businesses premises.

Internet Exchange Points

While the three-tiered model of internet service providers offers web access for most parts of the world, the infrastructure needs additional tweaks to do this efficiently.

For example, despite the high-speed technology utilized by ISPs, data packets from one provider to another in the same city can travel the country or region to be exchanged due to inefficient paths. And this is the exact reason why internet exchange points (IXPs) have been created.

Operated primarily by non-profit organizations, internet exchange points represent physical locations on the edge of different networks that web infrastructure firms (e.g., content delivery networks, ISPs) can leverage to connect with each other.

By connecting directly to IXPs through the Border Gateway Protocol (BGP), entities can establish shorter routes for internet traffic and improve the local web infrastructure by making it more resilient, cost-efficient, and faster.

Potential Vulnerabilities and Caveats

While the internet infrastructure has significantly developed since the early days and the backbone remained relatively resilient, there are still many caveats that could wreak havoc and compromise integrity on the local level.

A part of the internet infrastructure’s vulnerabilities can be exploited (either on purpose or by accident) via human intervention.

For example, in the course of a war, the spread of information over the internet could provide an advantage to one side. As a result, one side may decide to purposely destroy the local infrastructure that effectively limits digital communication between not just the military, but also the citizens.

In the early stages of the Russo-Ukrainian conflict, Russian forces destroyed 3G and 4G towers as they moved into the country, causing disruptions in mobile traffic even for their own forces. At the same time, it’s only due to the huge number of ISPs in Ukraine and the unified efforts of the government and internet companies that prevented serious nationwide outages. Although, citizens in Ukraine could still experience regular connection-related problems or remain without one in areas with intensive conflicts.

In some cases, there doesn’t even need to have a war to cause significant internet outages. In 2011, a pensioner in Georgia damaged the fiber optic cables leading to Armenia while scavenging for copper. As a result of a single person’s actions, the country’s citizens were disconnected from the web for several hours, as all three wholesale ISPs were unable to serve their customers.

During the 2011 Egyptian revolution, it was the government itself that shut down fixed and mobile internet networks in the whole country. While the exact method is yet to be known, the ruling regime could have possibly managed to turn off one of the largest IXPs that led to the isolation of Egypt’s network.

At the same time, natural disasters like the one we have explored regarding Tonga could easily cause major disruptions in local internet infrastructures, especially in nations with a limited number of service providers or routes to other networks.

Furthermore, global warming could present a new challenge for the internet backbone. According to a 2018 study by the University of Wisconsin and the University of Oregon researchers, a climate change-driven sea-level rise could take over 1,000 nodes or connection points underwater, causing serious damage to the US infrastructure in at little as 15 years.

In addition to the above human- and nature-related vulnerabilities, the global internet infrastructure has one significant caveat in the field of accessibility. This is called the digital divide, representing a gap between people with effective access to the web and other IT and communications technology and those who have no or very limited access to these.

While over 87% of the citizens of developed nations were connected to the internet in 2020, only 51% of developing countries’ populations were online, according to a recent report by International Telecommunications Union (ITU). In Africa and the least developed countries (LDCs), this is even worse, where only 27% and 22% use the internet.

Of course, there are many reasons behind this phenomenon. In some cases, local laws limit or prevent citizens from accessing the internet. For example, in North Korea, only a very small group of residents can access the global internet, as it requires special authorization from the government. The rest of the population can only use the nation’s domestic-only intranet.

Location is also a crucial factor influencing the digital divide. According to the ITU’s study, the share of global internet users in urban areas is twice as high as in rural areas, possibly due to the underdevelopment of internet infrastructure in the latter.

Furthermore, while digital literacy can also play a role in this field, the cost of connecting based on the price of internet services compared to gross national income (GNI) is usually higher in developing nations (4.4%) – and much higher in LDCs (20.1%) – than in developed jurisdictions (1.2%). If there are no affordable options, a greater share of the population will refrain from going online.

At the same time, even with decent internet coverage and affordable services, reliability is also crucial to encourage people to connect to the web.

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