<figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*oH89SLHMFnlUSg3jmZ4Y4w.jpeg"><figcaption>Image source: <a href="https://hbr.org/2019/09/will-we-realize-blockchains-promise-of-decentralization">https://hbr.org/2019/09/will-we-realize-blockchains-promise-of-decentralization</a></figcaption></figure>Anyone who hasn’t been living under a rock has heard of Bitcoin. People have been debating for a long time about whether Bitcoin is “just a fad.” We don’t claim to be economists nor mind-readers. But what we will say is that many analysts are missing an important factor: that Bitcoin is just part of a larger revolution that hopes to completely liberate the internet.
What are we talking about? In one word: decentralization.
<h3>What is Decentralization?</h3>
By decentralization, we mean any situation in which the operation of a computer network is controlled not by a central authority, but by the community at large. Examples of decentralization are: Bitcoin and other cryptocurrencies, IPFS, and the BitTorrent protocol.
The word decentralized is often confused with the word distributed. A distributed system in one in which multiple computers share resources and computing power to accomplish a task. The key idea that separates decentralized from distributed is that decentralized systems are not controlled by a central authority (such as the owners of a server farm) and are instead self-regulating. Distributed systems can be centralized, but decentralized systems are always distributed.
Decentralized is also confused with the term peer-to-peer. Peer-to-peer (P2P) systems are distributed systems in which no node has more privilege than another. Networks usually must be peer-to-peer to be considered truly decentralized.
Decentralized systems must contain a mechanism for determining the true state of the system, in case a malicious actor attempts to tamper with it. Bitcoin uses the blockchain data structure to achieve this; it is essentially a tamper-proof ledger and the persons who record transactions the quickest are assumed to know the true state of the system. The true state of the system can also be determined through voting and consensus.
So why do we think decentralization is the future. In short, it gives power to the people!
<h3>History of Decentralization</h3>
Before we go into the benefits of decentralization, it would be helpful to go over some examples.
<h4>The Early Days</h4>
In 1980, the decentralized discussion platform <a href="https://en.wikipedia.org/wiki/Usenet">Usenet</a> was launched. Users could read and post messages to categories known as newsgroups. These newsgroups were hosted on a variety of servers, usually owned by internet service providers (ISPs). Usenet is a direct precursor to the internet forums we know today.
Many social apps (Mastodon, PeerTube, etc.) have been developed in a similar vein to Usenet, and together comprise an entire ecosystem of decentralized social apps known as the Fediverse.
In 1999, the peer-to-peer music sharing platform Napster was released. Reaching its peak in 2001, it was faced with a number of lawsuits because it facilitated the sharing of pirated materials. In mid 2001, it was forced to shut down its entire network and has since been rebranded as a music store and a music streaming service.
In 2001, the decentralized file sharing protocol known as <a href="https://en.wikipedia.org/wiki/BitTorrent">BitTorrent</a> was released. When a file is added to the BitTorrent network, it is split into pieces and distributed across multiple computers on the network. A client wanting to download the file would retrieve all of the pieces and reassemble them. Like Napster, BitTorrent is infamous as a platform for sharing pirated media, but continues to survive for this day.
The difference is that unlike Napster, the BitTorrent protocol is entirely decentralized and cannot be shut down by a single authority. To destroy BitTorrent would be to ban all BitTorrent clients available on the web, of which there are many. Contrast this to Napster, which had a single, proprietary client. If Napster was not a for-profit and made its client open-source, perhaps it would exist today.
<h4>Bitcoin</h4>
In 2008, a person or group of people known only by the pen name Satoshi Nakamoto released the <a href="https://bitcoin.org/bitcoin.pdf">original paper for Bitcoin</a>. In it they describe a digital currency in which transactions are recorded in a tamper-proof ledger known as a blockchain.
Everyone on the network has a copy of the blockchain. Like we discussed earlier, the “correct” version of the ledger belongs to the user that can record and verify transactions the fastest. This process is called mining. Miners are rewarded in Bitcoin; this is how Bitcoin is introduced into the economy. Every 210,000, the reward for mining is cut in half, so there is technically a finite supply of Bitcoin.
Bitcoin is what really pushed decentralization into the mainstream. There is an estimated 200 million Bitcoin wallets in existence. As of writing this article, a single Bitcoin costs about $32,000. Special computer parts have been developed for the purpose of mining.
<h4>Ethereum</h4>
<a href="https://ethereum.org/en/">Ethereum</a> is the most popular cryptocurrency behind Bitcoin, but what it offers is much more than a digital currency.
Going live in 2015, Ethereum introduced an innovation that elevated crypto to the realm of traditional finance: smart contracts. These contracts were self-executing code that, like normal transactions, were recorded on chain and thus were binding and tamper-proof.
What Ethereum introduced was the ability express concepts like loans and interest in the form of its smart contracts, making it as powerful as traditional currency. All of the instruments of traditional finance could be reinvented, forming an ecosystem of DeFi (Decentralized Finance) applications. Smart contracts could also be used to write entire applications on chain, known as Dapps.
Finally, Ethereum introduced Non-Fungible Tokens (NFTs), which are individual units of data stored on chain, used to certify the uniqueness of a digital asset (photos, music, video game items, etc.). NFT’s have most famously been used for selling original pieces of digital art. In 2020, a series of works by the artist Mike Winkelmann called “Everyday — The First 500 Days,” was <a href="https://en.wikipedia.org/wiki/Everydays:_the_First_5000_Days">auctioned in the form of an NFT for 69 million dollars.</a>
<h4>Decentralized Storage (IPFS, Storj, FileCoin, etc.)</h4>
If you follow tech news, you’ve probably read about a government or mega-corporation whose records were leaked by hackers.
Decentralized storage protocols provide a number of security benefits over traditional cloud storage providers. These protocols tend to encrypt, split up and distribute files in a similar manner to BitTorrent, so workstations hosting your files are unable to view them. They are also fault-tolerant in that a single compromised node does not bring down the entire system. Finally, these protocols store files redundantly such that lost data can be easily recovered.
<a href="https://ipfs.io/">IPFS</a> is special in that it is not just a storage system but an entirely decentralized version of the web. IPFS is able to host web pages that can be accessed through your browser. IPFS already hosts search engines, messaging platforms, crypto wallets, databases, and more….
<h3>The Case for Decentralization</h3>
The beauty of decentralization is that means independence from Big Tech, governments and financial institutions. It means the ability to communicate and exchange assets without any middlemen. It means the ability to speak freely without fear of censorship.
Let’s start with the issue of censorship. Consider a person living under a repressive regime who wants to speak out against the government. If he uses a state-approved social media app, his communications will be monitored and censored, and he will possibly face legal consequences. What if he uses a decentralized social app like <a href="https://joinmastodon.org/">Mastodon</a>? His posts won’t be in the hands of the government, but in a server belonging to a gracious individual. What if the government finds who is operating the server and forces it to shut down? He can use a serverless, blockchain-based app instead of a federated one.
The point is that decentralization makes the internet un-censorable. There are plenty of “alternative” social media apps (Parler, Gab, etc.) that claim to stand for free speech, but can they really be trusted if they aren’t decentralized? Keep in mind that it’s not just the social media company that controls what appears on the app; it’s also the server owner, the government, and the app store operator in the case of mobile apps. The iPhone version of <a href="https://www.msn.com/en-us/news/technology/parler-returns-to-apple-app-store-with-new-hate-speech-censorship/ar-BB1gPCDT">Parler now censors hate speech</a> so it can appear on Apple’s App Store, for example. (We are not condoning the use of hate speech. We are simply stating that no centralized app can be trusted to protect it, along with more benign speech.)
This brings us to the biggest controversy surrounding decentralized networks: what is there to prevent illegal content from being uploaded? In the case of federated social media apps, the server owners are in charge of moderation, but what about serverless models like <a href="https://ipfs.io/">IPFS</a>? The truth is that there is no easy answer. Consensus can be used to determine who is allowed to post, but if existing social media is anything to go by, “upvote” systems can be abused.
While illegal content is a legitimate concern, we personally don’t see this as a reason to shun decentralization entirely. If worse comes to worst (keep in mind we’re talking about very new technology), the centralized and decentralized web will coexist in a similar fashion to the “surface” web and the “dark” web. But we don’t believe that this will happen. A more likely scenario is that server-based protocols will simply overtake serverless ones in popularity. Just like the “normal” web, there will be sanitized and un-sanitized places to accommodate all kinds of users.
Let’s move onto cryptocurrency. Crypto has essentially ushered in a new economy free from the influence of banks and financial regulations. Middle-men have been completely cut out of the equation and the money supply is controlled by a fixed algorithm. The result is the pinnacle of free trade.
Why is this a good thing? It lowers the barrier of entry into finance. It can be used to <a href="https://www.reuters.com/technology/iran-uses-crypto-mining-lessen-impact-sanctions-study-finds-2021-05-21/">bypass economic sanctions</a>. It offers an alternative currency for countries suffering inflation. There are lower transaction costs. A limited money supply means it can’t be devalued.
Of course, there are many concerns surrounding crypto, some more legitimate than others. <a href="https://bariweiss.substack.com/p/the-case-against-bitcoin">Skeptics</a> have pointed out crypto’s volatility, the environmental effects of mining, the prevalence of scams and criminal activity, the fact that private keys can still be stolen, the fact the governments are already cracking down on it….
We won’t go over all of these issues right now (perhaps in another article). We admit that crypto in its current state is in need of improvement. But there is no reason to assume that none of these holes will be patched up. <a href="https://minaprotocol.com/about">Blockchains are already being developed</a> to reduce energy consumption and improve security and scalability. Because of decentralization’s rise in popularity, there’s no reason to believe that the cryptocurrencies of tomorrow will be identical to Bitcoin or Ethereum.
<h3>Conclusion</h3>
We’ve discussed two major use cases for decentralization in the section above, but the possibilities are truly endless. There is decentralized voting, gaming, gambling, databases, etc. etc., all free from government and corporate oversight for the most part. Decentralization is a way to bypass the various inconveniences and restrictions that limit our freedom and keep us from interacting directly. We will go into even more detail on decentralization in future articles.
Like we said at the beginning of the article, we are not economists. We’re not here to tell you that decentralized software will make you a millionaire (although we have no obvious reason to believe otherwise). We are interested in decentralization because of the undeniable humanitarian benefits which we believe are catching on!
<h3>SafeHouse</h3>
SafeHouse believes in the mission of decentralization and hopes to use it to protect small businesses. If you enjoyed what you read, consider checking us out at <a href="https://safehouse.dev/">https://safehouse.dev/</a>.
<img src="https://medium.com/_/stat?event=post.clientViewed&amp;referrerSource=full_rss&amp;postId=7170dd0d7b56" width="1" height="1" alt=""><hr>
<a href="https://medium.com/codex/why-decentralization-is-the-future-7170dd0d7b56">Why Decentralization is the Future</a> was originally published in <a href="https://medium.com/codex">CodeX</a> on Medium, where people are continuing the conversation by highlighting and responding to this story.

Why Decentralization is the Future

AES: How the Most Advanced Encryption Actually Works

<figure><img alt="" src="https://cdn-images-1.medium.com/max/1024/1*ZEwXotDGMjL_xB2FH58oQw.jpeg"><figcaption>Image source: <a href="https://securedcommunications.com/download--secured-communications.html">https://securedcommunications.com/download--secured-communications.html</a></figcaption></figure>In our <a href="https://devsafehouse.medium.com/">many articles about how the internet works</a>, we left out an important detail. Many common internet-facing applications secure data before it’s sent out into the world. But how? With an ingenious protocol known as TLS.
<h3>What is TLS?</h3>
In the olden days of the internet, communication was completely unencrypted. This meant that eavesdroppers could potentially see all of the data sent over the internet. People had to be very careful when sending sensitive information.
This problem was recognized as early as 1994, so the SSL (Secure Socket Layer) protocol was developed. SSL encrypts data at one endpoint and decrypts it at the other, such that data passed between computers was completely unintelligible. Keep in mind that this protocol does not protect data sitting on your computer (“at rest”); it only protects data in transit when two computers connect to each other.
TLS (Transport Layer Security) is a similar protocol to SSL and shares the same purpose. The first version was developed in 1999 and based on SSL 3.0. When SSL 3.0 was found to be insecure, it was completely replaced by TLS. TLS is used for web browsing, but can be used for a variety of services. Today, TLS 1.3 is the latest version of TLS and earlier versions should be avoided.
You may have noticed when browsing the web that some URLs start with “http” and others with “https.” HTTP stands for Hypertext Transfer Protocol, and it is the protocol that retrieves HTML and other media to be displayed by your web browser. HTTPS is a version of HTTP with integrated TLS/SSL. In other words, accessing an “https” website means that your communications with the server are encrypted. It’s recommended that every website switch to HTTPS by purchasing an SSL certificate.
<h3>How Does TLS Work</h3>
The first question one might ask about encrypted communication is “how do both parties know how to decrypt the messages? Surely they can’t just send the key over the web!” In fact, they can, and we will explain how step by step.
Suppose you are a web browser and you want to connect to a website’s host. The browser will conduct a conversation with the server to establish a secure channel. This conversation is called the TLS handshake.
Step 1: The client will send a “hello” message to the server, containing the TLS/SSL versions it is using, a list of supported cipher suites, and string of random bytes (called the client random).
What is meant by “cipher suite?” We’ll get to that. First of all, a cipher is simply an algorithm to encrypt a message. For example, replacing each letter in a message with a number is a type of cipher. But the ones used by TLS are far more complicated and impossible to break by humans or computers alike.
A cipher can be symmetric or asymmetric. A symmetric cipher is one in which a single key is used to encrypt and decrypt the message. They are most useful when only you want to see the contents of the message, since sharing the key is a security risk. The most common symmetric cipher used by TLS is <a href="https://en.wikipedia.org/wiki/Advanced_Encryption_Standard">AES (Advanced Encryption Standard)</a>.
Asymmetric ciphers require separate keys to encrypt and decrypt the message, and they are the most important component when establishing a secure session. What makes these algorithms work is that an attacker cannot decipher the message with the encryption key; he must have the decryption key. Therefore, the encryption key, also called the Public Key, can be freely traded between parties without posing a security risk, as long as the decryption key (a.k.a. the Private Key) is not revealed. The principle asymmetric ciphers employed by TLS are <a href="https://en.wikipedia.org/wiki/RSA_(cryptosystem)">RSA (Rivest–Shamir–Adleman)</a> and DHE (<a href="https://en.wikipedia.org/wiki/Diffie%E2%80%93Hellman_key_exchange">Diffie–Hellman</a>).
Now we can define “cipher suite.” A cipher suite contains:
<ol>
<li>A symmetric encryption algorithm (such as AES)</li>
<li>An asymmetric encryption algorithm (such as RSA)</li>
<li>A Message Authentication Code (MAC), used to authenticate messages</li>
</ol>
Step 2: The server generates a public/private key pair and responds to the client with: the cipher suite it wants to use, the TLS version it wants to use, a digital certificate, the public key, and another string of random bytes (called the server random).
The digital certificate is supplied by the server’s domain name provider. The client will check with them and ensure that the server is the actual owner of the domain.
After this message is sent, the client and server will use the highest TLS version and the most secure cipher suite available to both.
Step 3: The client generates another string of random bytes (called the pre-master secret), encrypts it with the server’s public key, and sends the result to the server.
Step 4: The server decrypts the message sent by the client with its private key. Now both the server and the client have the unencrypted pre-master secret.
Step 5: The server and the client use the pre-master secret, the client random and the server random to generate another key, called the session key. They should both generate the same key.
Keep in mind that the session key is different than the server’s public/private keys. The former is a key for a symmetric algorithm such as AES, whereas the public/private keys were either RSA or DHE.
Step 6: The server and client will exchanged messages encrypted with the session key to ensure that the handshake worked.
Step 7: If the handshake was successful, the client and server will use the session key for the remainder of session. The MAC is used in conjunction with the session key to authenticate messages.
Once a secure connection is established, there is no need to keep the private key, public key, or pre-master secret.
And that’s it! Except for one small detail: this is how TLS works with RSA. With DHE, there are a couple changes:
<ol>
<li>Along with the public key, the server sends a message encrypted with the private key to prove that the two keys are indeed pairs. The message contains a string known as the DH parameter.</li>
<li>Instead of the client generating the pre-master secret randomly, both the server and client use the DH parameter to generate it.</li>
</ol>
<h3>Summary</h3>
This was a lot to take in. If there’s anything you derive from the preceding information it’s this:
We use an asymmetric encryption algorithm to exchange information that generates a symmetric encryption key.
The real genius lies in how the encryption algorithms work, so if you’re a sucker for math we highly recommend you checking them out. We will probably explain how they work in future articles.
<h3>SafeHouse</h3>
SafeHouse will use the techniques shown in this article for its own software. If you found what you read informative, consider checking us out at <a href="https://safehouse.dev/">https://safehouse.dev/</a>.
<img src="https://medium.com/_/stat?event=post.clientViewed&amp;referrerSource=full_rss&amp;postId=7a9558d98e5d" width="1" height="1" alt="">

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Why Decentralization is the Future

AES: How the Most Advanced Encryption Actually Works

How TLS Protects Your Web Activity

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Fool, learn, and conquer

Trustless identity for small businesses

Get SafeHouse

Read Our Blog

Compromised credentials are the leading cause of hacks.

The solution? Ditch the password and embrace decentralized identity.

Granular

Specify authentication conditions

Decentralized

Confirms identity through concensus

Secure

Authentication impossible to bypass

Disclaimer

This is a placeholder site for a product in development.There is no pricingIn the meantime, check out our blog!

Recent blog posts

Why Decentralization is the Future

AES: How the Most Advanced Encryption Actually Works

How TLS Protects Your Web Activity

There is nothing to purchase right now.

Pricing information is not available at this time.

Basic

$XX.XX

Enterprise

$XX.XX

Get the world's most advanced decentralized identity solution

Get SafeHouse

Read Our Blog

SafeHouse

Trustless identity
for small businesses

This is a placeholder site for a product in development.
There is no pricing
In the meantime, check out our blog!