Napster was the way I found decentralization. I was 19, and music was my symbol of freedom. But music wasn’t free. Albums were very expensive and controlled by a middle-man: the record labels. Each week, I’d go to my local record store, pay $14.99, and return home with a physical album. A CD.
Napster changed all that. In the summer of 1999, my college roommate installed the music file sharing app on my computer. Instantly, I could connect with strangers and share music freely.
Napster’s decentralization killed the middlemen, or at least significantly shrank their power.
As a result, album sales cut in half over the next decade. The world memorialized the industry’s precipitous downfall, “The Year the Music Dies” (Wired 2003), “The Rise And Fall Of The Music Industry” (NPR 2009), and “Music’s lost decade: Sales cut in half” (CNN 2010).
During the Napster era, I was enrolled in college as a Music Industry major. My life path changed the day I saw Napster. For me, coding, and hacking had become the new rock & roll. That fall I left my music studies, and began to study computers.
Today, there’s a new rockstar turning heads: blockchain. Like Napster, blockchain has its own set of challenges — speculation, funding, regulation, censorship, etc. But these challenges aren’t necessarily new. Blockchain and Napster are both just chapters in a much longer story: the story of decentralization.
Decentralization continues to disrupt global institutions, and gives life to new ones. If you understand the causes of why it’s happening you will be positioned to make wiser decisions in the future. Wisdom, as defined by Aristotle, is an understanding of the principles and causes of our knowledge. He wanted us to ask why things are a certain way.
My goal here is to show you why things are a certain way.
The story of decentralization isn’t new. It begins all the way back in the Cold War. Let’s start there…
Act I: The Early Settlers of Cyberspace: 1945–1969
The first version of the internet begins with a rivalry between two superpowers from The Old World: The United States and the Soviet Union. To summarize the disagreement:
They each wanted to spread their belief system to other countries around the world. Each side was 100% certain that they were right. And they both had huge missiles pointing at each other!
This rivalry is known as The Cold War. “Cold” because it wasn’t fought on a battlefield (It was fought by scientists in the lab!). And although it was called a “war” it was more of a race — a race between the U.S. and the Soviets to see who could invent the most revolutionary technology.
They were neck and neck in the race until 1957 when the Soviets pulled into first place. That’s the year the Soviets launched the first-ever satellite into space: Sputnik. Sputnik showed the world that the Soviets had missiles capable of reaching any part of the world. Americans were terrified, as is seen in this ad for practical low-cost nuclear fallout shelters.
President Dwight D. Eisenhower, in direct response to Sputnik, requested the funds from Congress to start two new agencies: The Advanced Research Projects Agency (ARPA), and the National Aeronautics and Space Administration (NASA).
Whereas NASA would send the first man to space. ARPA would bring the first taste of cyberspace to man.
The Beginning of ARPA: Washington, DC
In 1963, a man named J. C. R. Licklider (known by his peers as “Lick”) working for ARPA suggested that we create an Intergalactic Computer Network. The main gist of Lick’s argument was that for the United States to compete in the technology race we needed to double-down on computer research.³
The problem with computers, as Lick saw it, was that they were too expensive! One computer could take up an entire room. Lick proposed a solution called time-sharing. With time-sharing, you could have one central “brain” computer which could communicate with lower-cost computers. Essentially, what we today refer to as networking.
Lick’s suggestion was implemented, and the future intergalactic computer networking was off to a fabulous start!
Except for One Problem: Enter Paul Baran
In 1964, a guy named Paul Baran, at the U.S. government funded RAND Corporation, pointed out a deadly design flaw with Lick’s time-sharing.
Baran wrote a report to the U.S. Air Force where he made the argument: the U.S. government must upgrade communications from the centralized model to a newly-designed decentralized model.⁴
If the Soviets bombed the main computer, the entire network goes down!.⁵
Let me explain his thesis using friendly photos of The Muppets. This (below) is an example of a centralized network. As you can see all communications need to pass through Kermit. So if Kermit were to be attacked, then Fozzie Bear could no longer connect with Ms. Piggy.
But with Baran’s new proposal, if Kermit were to be attacked, Fozzie and Miss Piggy could still communicate!
Baran’s idea for decentralization was revolutionary. Baran’s influence would soon find its way to Lick where, together (along with a team of engineers), they would build the first version of the internet, which was known as the ARPANET.
Decentralization! It’s Alive!
The big innovation with the ARPANET wasn’t just that you could send messages. Before the ARPANET people were already sending written messages via Morse code, telegraph, and windmills (yes, windmills). With the ARPANET two computers could now send messages to each other. What was amazing was how they did it.
To explain, I think it will do us some good to dive deeper into how decentralization works. Let’s start with cats.
If Kermit sends Fozzie a cute cat pic, that image is broken up into smaller pieces called packets.
The packets travel along a variety of different routes: through wires, over land and sea, and eventually reassemble when they reach their destination. The cat image above is broken into only four packets, but in real practice it would be thousands of packets.
Each of the letters represents a server (aka. like a computer) between Kermit and Fozzie. In geek speak, we call them “nodes.” If node “D” and “G” were to fail, then the packets can just reroute through other available nodes.
Declaring War on Decentralization — 1969 to 1999
By the winter of 1999, there were many speculative claims about the future of Napster. Everything from, “Napster is going to kill the record industry!” to “The government is going to regulate file sharing, it’ll never last.”
Ultimately, both happened. Over that next decade, the RIAA (The Record Industry Association of America) made it its mission to destroy Napster! They used their strongest weapon, money, to fund a litany of lawsuits against Napster founders Shawn Fanning and Sean Parker. Two years later, Napster officially shut down to comply.
What the RIAA didn’t know is that decentralization flows like a parade of ants. Step in their way, and they naturally find a path around your feet.
With Napster shut down, hundreds of Napster-copycats popped up: BitTorrent, Gnutella, Kazaa, Limewire, the list goes on. The RIAA tried to hit down each of these like a game of whack-a-mole. But they hit one down, and two more popped up!
In the decade between 2000 and 2009, the RIAA would spend $58 million dollars serving lawsuits to both founders of file sharing companies, and the individual users downloading music in their homes.
Eventually, in 2009 the RIAA ended their war against decentralization. They couldn’t fight the power of the network. Somewhat ironically, the war against file sharing ended the same way the Cold War ended: Not with a climactic battle, but from exhaustion.
How Control Exists After Decentralization
The what-a-mole seems random if you’re just swinging the mallet from above. But peer down below the surface, and you’ll find there is an order. It’s not random.
If you take some time to study the machine you may start to see the pattern.
Next up — Part Two: The Secret Code of Hackers. In the next chapter we attempt to understand the pattern by looking more closely at the the people who created it. What do Licklider (the ARPANET), Shawn Fanning (Napster), Steve Jobs (Apple), and Satoshi Nakamoto (Bitcoin) all have something in common? They are all hackers. Hackers are guided by a shared code of ethics. Crack the code, and guess their next move.