By Jon Rice, former editor-in-chief at Cointelegraph, Blockworks, and Crypto Briefing
Part One: The State of Play
If you think that technology appears to be making everything worse, you’re not alone.
The enshittification of the internet continues. Web3 is a minefield of broken promises and dubious projects. Artificial intelligence is blurring the line between fiction and reality — and not in a good way. There’s an app for everything, and none of them work together. Your digital media isn’t yours, because now everything is a subscription — to the extent that we look back fondly (!) to the good old days of cable TV bundles.
Ad companies track every website you visit and sell your data to the highest bidder. Security breaches are so normal that we have half a dozen identity-monitoring services active at any given time. Even your car is snitching on you to your insurance company.
You know all of this, of course. You have to suffer the small indignities of this digital salad every day.
Technology is basically fucked, and there is one common denominator: Centralization.
The potential of the internet was real. It just wasn’t realized.
The design had a vulnerability. An attack vector. It was a decentralized communications protocol, but it didn’t have a decentralized financial system. It didn’t have decentralized applications. This left space for centralized companies to exploit the strengths of the internet to grow exponentially, to outcompete, and to take control.
Blockchain can mitigate this attack. Bitcoin added digital money to the internet. Ethereum added decentralized applications and a financial system. Countless other blockchains have made iterative improvements to the digital world, although I will argue that they have not taken the vital step from ‘incremental improvement’ to ‘revolutionary leap forward’.
The problem with previous blockchains is partly that, like the internet, they have centralization vulnerabilities.
The Proof of Work (PoW) consensus mechanism that powers Bitcoin puts miners with large compute resources in control. Proof of Stake (like Ethereum) puts large stakeholders in control. And the transaction fees give those in power the lever to extract wealth from the system.
And the other failure is that pretty much every blockchain has an absolutely dreadful user experience, primarily because they all charge fees to use the chain — which means that any given user has to jump through a plethora of intrusive and counterintuitive hoops just to obtain the tokens they need to use these chains.
These volatile fees make the user experience of blockchains unacceptable to everyday people, but they remain the dominant paradigm because, well, that’s how the people in power make money. If you believe that incentives matter, this should not surprise you.
While the design decisions made in Bitcoin and Ethereum were perfectly reasonable and noble at the time, it’s high time we reevaluate those decisions.
Because after years of excuses and scaling solutions and new features, blockchain advocates are still saying the same damn thing. Mainstream adoption is just around the corner! Just give us more time! Give us more money! Use our L2s! Use our L3s!
When the developers of Koinos started out on their journey in 2020, they had one simple thesis; No matter what crypto people said about mainstream adoption being just around the corner, as long as gas fees were present everyday people would not (and in many cases, could not) use the blockchain.
Koinos has been designed to mitigate that problem, while remaining truly decentralized and fair.
It does away with traditional gas fees. It isn’t controlled by venture capitalists who keep extracting more and more money from crypto investors. Its design means that anyone, anywhere, can use the blockchain without even realizing it.
Koinos is the evolution of Web3, and the first blockchain that truly offers the opportunity to deliver on its promise.
And if Koinos can deliver Web3, and Web3 can deliver more agency to the users of technology, then Koinos is the first step toward the internet we always wanted and deserved.
So what is Koinos?
Part Two: Changing The Paradigm With Koinos
Koinos is a blockchain.
It was developed by a handful of folks at a company called The Koinos Group who had previously worked on Steemit, which was a big deal in the crypto industry a few years ago until it suffered a hostile takeover by a rich guy called Justin Sun (boo, hiss).
As a result of their experiences with Steemit, the architects of Koinos — which comes from the Greek word for ‘common’ — decided to gift this blockchain to the world, as, quite literally, a common good.
They didn’t keep anything for themselves. They didn’t give any tokens to venture capitalists. They didn’t give any to friends, or to family, or even to me. They literally built it from the ground up and gave it away because:
a/ They figured they could build a business on this new blockchain, and that this new business would become profitable (it’s at koinos.pro if you want to check it out), and:
b/ They are committed to the idea that Web3 should be for everyone.
(Also, this way they wouldn’t get into trouble with the SEC for accidentally being both American AND entrepreneurs, which is a whole other story.)
Like any blockchain, it needs digital tokens to work. Anyone with a computer was able to join in the minting of new tokens over a 6-month period in 2021 and early 2022. The mining announcement was featured in Hacker Noon, Cointelegraph, and on the Bitcoin Forum. And lots of people duly went off and mined their portion of the 100M tokens that would go on to power the Koinos blockchain (including the Koinos Group).
Koinos went live on November 5th 2022 — a date selected at least partly for its revolutionary significance — and it’s been humming along nicely ever since.
And Koinos, at least to the best of this author’s knowledge, is the only blockchain in the world that has these three things going for it.
It adheres to the original decentralized and fair ethos of crypto
It’s technically capable of delivering on the promise of crypto
It opens crypto to everyone, whether they own tokens or not
Seems simple, right? It’s not.
Crypto is a horrible, horrible, horrible industry full of thieves, scammers, get-rich-quick artists, more thieves, finance bros, sketchy influencers, even more thieves, vulture capitalists, and other assorted scumbags. I know, because I’ve interviewed half of them.
So when I say that Koinos epitomizes everything good about that original ethos of crypto, it’s flying in the face of almost everything that’s happened since Satoshi Nakamoto gave us Bitcoin.
And even when there ARE good people and good projects and good intentions (I’ve also met hundreds of these people, who rarely get the credit they deserve) they tend to get overlooked because the rich thieves and scammers and vulture capitalists are so busy flooding the market with their awful shitcoins.
No wonder so many people think twice before giving up their bank information and parting with their hard-earned cash. But Koinos addresses this, as we shall see.
As for technical capability?
Web3 is a collection of technologies which promise an improved internet, one in which individuals have a greater degree of agency, and centralized authorities are not all-powerful.
In practice, this means that digital ownership, data sovereignty, and value exchange will become easier and less reliant on intermediaries. And hopefully, it will usher in an era of de-enshittification of our digital world.
But in order for that to happen, blockchains and the smart contracts that operate on them will need to be:
Feeless
Frictionless
Familiar
I’ll get into these in more detail later, but in summary, and as I wrote in Cointelegraph last year:
“Free” means free for the user, “frictionless” means as easy as opening an app or playing a video game, and “familiar” means we need to stop asking regular people to change their behavior to meet the limitations of our tech. We need to meet them where they already are.
Right now, we are zero for three. In fact, we’re so far away from where we need to be that we’re not even trying to address these problems seriously — we’re busy making small, incremental improvements to dysfunctional tech rather than addressing the root of the dysfunction itself.”
Be honest. Would you want to give up your bank details so you could buy tokens to search on Google?
Do we expect everyone in the world to learn how to operate a hardware wallet, go to an exchange, find a token, purchase it, blind sign their transactions, blah blah blah just to get access to their health data, or their real estate title, or to transfer some money?
And do we expect them to learn this super nerdy tech stuff from scratch in an age of misinformation (and the aforementioned thieves and scammers)?
The only thing worse than the scammers, are the user experiences that give them the opportunity to BE scammers.
Crypto delivers the worst user experience in tech, ever, bar none. And that’s coming from someone who grew up with VHS recorders.
There is no blockchain in the world that solves these problems. Except Koinos.
Because Koinos is a blockchain that ordinary people can use, without actually needing to go buy tokens on an exchange and hold them in a wallet.
Crypto skeptics tend to focus on the fact that blockchain technology hasn’t yet led to a scalable social network, or to a scalable payments system, or even interoperable gaming solutions.
And that’s a fair critique, because it’s true. And I will argue here that the reason for that is very simple.
No blockchain until Koinos has solved the problem of allowing ordinary people to use it in a manner that is free, frictionless, and familiar.
In order to show how Koinos solves the problems that crypto has today, we need to refresh our memories on what crypto is supposed to actually do, and take a look at why existing blockchains don’t do it.
Part Three: The Promise Of Crypto
The first blockchains were fundamentally just digital ledgers. They accounted for who owns what.
Later came smart contracts on blockchains: Self-executing pieces of code triggered by predetermined conditions, the results of which can be immutably stored on chain.
Put them together and you have an extraordinarily powerful combination.
Tracking the provenance of a Picasso? That’s a job for blockchain!
Automatically finding the best price for an asset across multiple venues? That’s another!
Anywhere you might need trust, there’s the potential for a blockchain application. Trust in people is supplanted by trust in the integrity of the chain, and the smart contract that sits on it.
(This is where a lot of the crypto crime you read about occurs. Any smart contract that handles significant value can become a target for hackers: By trusting a smart contract, you’re trusting that the coder is smarter than the hacker. This is sadly not always the case.)
And it’s not always just about money or goods. I remember editing this piece on a blockchain project to aid the Rohingya people of Myanmar, who lack a centralized authority that issues the papers — passports, birth certificates and so on — that most people take for granted.
“When the Burmese Army staged a coup in 1982, the Rohingya were delisted as an official ethnicity by the state in a new citizenship law. Essentially, their citizenship was removed and they were rendered stateless. The [blockchain-based] Rohingya Project uses digital identity to recognize the individual’s origin and allow them to gain access to services. It is not meant to be a competitive identity card to existing state-based identity systems, but a digital ‘proof of existence’.”
Smart contracts (when coded correctly) can’t cheat, lie, steal, betray, or any of the other insalubrious things that people do every day.
The real promise of crypto, therefore, is to replace human weakness and vulnerability with trustless code.
And while some of the applications may seem frivolous — like owning a unique shirt in a metaverse — some of them could fundamentally change human society.
Which leads us to one of the reasons I believe crypto has found ‘product-market fit’ in its philosophy and potential, even if it hasn’t yet solved the problem in practical terms.
Defense Against Surveillance Capitalism
The rise of surveillance capitalism and the monetization of our data by tech platforms has influenced the general evolution of the cryptocurrency industry as much as the financial crisis gave rise to Bitcoin.
Countless lawsuits against tech firms have resulted in billions of dollars in fines and settlements for illegally harvesting data, targeting us with ads, selling our private information and so on. But the data they gather is too valuable, the lawsuits are simply the cost of doing business, and unless you have a degree from Harvard law, you wouldn’t understand the terms and conditions you agree to every day even if you bothered to plow through them.
So they just seem to keep on doing it.
Here’s one from a few weeks ago, a class action against Larry Ellison’s Oracle that was just settled for $115M.
“In the course of functioning as a worldwide data broker, Oracle has created a network that tracks in real time and records indefinitely the personal information of hundreds of millions of people… This process provides Oracle with a virtual panopticon: Oracle purports to have vision on virtually everything ascertainable in electronic form about Class members, from where they live, to the media they consume, to the things they buy, to the views they hold.”
$115M seems a lot? Ellison is the second-richest person in the world, according to Bloomberg, and $115M represents 0.00055% of his wealth. To put that into context, Oracle’s fine for recording almost everything about you is equivalent to someone with $100,000 in the bank paying a $55 parking ticket.
Lots of people who are attracted to crypto don’t want every detail of their life — their browsing history, their purchases, their political views — packaged and sold for profit.
Actually, lots of people in general don’t like it, whether they’re into crypto or not. But that is what Big Tech does, and it does it with a quite staggering level of efficiency.
Whatcha gonna do? Stop using Microsoft and Google and TikTok and Facebook?
The bigger and more effective these companies became, the more data they could harvest, which made them more money, which made them bigger and more effective…
(I’m writing this on Google docs right now. Shakes head ruefully.)
Data sovereignty is “the idea that individuals and organizations have the right to control their data, including how it is collected, stored, shared, and used.”
But the problem here isn’t just data harvesting. It’s not even just ownership — of your data, your digital media, your creative output.
(As Facebook notes: “Specifically, when you share, post, or upload content that is covered by intellectual property rights on or in connection with our Products, you grant us a non-exclusive, transferable, sub-licensable, royalty-free, and worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works of your content.”)
It’s also that these companies are so gigantic, that they are so ubiquitous, and that our world is now so interconnected, that the tech companies have become too big to fail.
No lawsuit will bring the data thieves to their knees. No government can truly take on Big Tech. They own us. They own every detail of our lives, and at some point this is likely to lead to Very Bad Things.
Only a mass exodus of their users will change their business models. And that requires a fundamental change in how we use the internet.
This is what Web3 is supposed to do: Change how we use the internet — in fact, change what the internet IS — so that we’re not all at the mercy of Big Tech, Big Banking, Big Government and so on. And so that we can return to a world in which we own what we own, without exchanging it for the dubious benefit of accessing Facebook.
(There’s an excellent — and very fair — primer on the promises and challenges of Web3 in this article from the Harvard Business Review.)
So — aren’t existing blockchains already doing this? Ummm… No.
Oh, Bitcoin!
Imagine if Bitcoin was actually useful.
Okay, that’s a pretty hardcore statement for someone who has a special attachment to Bitcoin, particularly in the context of talking to an audience of people who probably also have an affinity for the original cryptocurrency.
But let’s acknowledge that Bitcoin has moved beyond its original purpose, which was to facilitate peer-to-peer cashless payments.
Today, Bitcoin is a trillion-dollar asset because it is, in fact, somewhat useless.
It’s not a good way of paying for products and services. It doesn’t lend itself well to smart contracts. It is an inelegant solution for artists, or gamers, or payments, or the internet of things, or… well, you get my point.
It’s hard to produce, inefficient, and it’s not programmable.
But partly because of its intrinsic scarcity, its decade-long journey to true decentralization, and the fact that it laid the groundwork for a multi-trillion dollar industry, Bitcoin performs one function very well indeed.
It continues to morph into a jolly effective Store of Value, complete with capitalization (and market capitalization) to fit. I won’t go into the reasons for this, because plenty of other people have written cogently and persuasively on the subject and the evidence is overwhelming. Bitcoin is digital gold, and it’s very good at being digital gold.
And like gold, not a whole lot is really expected of it other than to lie around in vaults being worth a lot of money.
But of the many possible reasons early adopters chose to mine or buy their bitcoins, storing their wealth in this digital asset most certainly wasn’t one of them.
Ironically, Bitcoin’s failure to be fit for its original purpose is why it’s worth so much now.
If it were a great way to transact — if we bought our coffee every morning with bitcoins instead of dollars — it would not have become the valuable asset that it is today.
We’d have spent it.
Ok, what about Ethereum?
Now imagine if Ethereum was actually useful.
Whoa, tiger!
I realize I’ve now made ‘unfit-for-purpose’ assertions about the two most popular and valuable assets in our industry. But hey, we’re all friends here. So let’s just be honest.
Ethereum isn’t the answer.
Ethereum was the first digital asset to introduce smart contracts, those self-executing pieces of code that have enabled the rise of Web3.
And rather like Bitcoin, Ethereum’s first-mover advantage (plus the generous allocation of the assets granted to themselves and the Ethereum Foundation by its highly-motivated founders) have helped it dominate the smart contract space, even though over the years it has proved to have very significant problems that newer technology has solved.
Ethereum is slow. It is expensive.
It is about as far from being an efficient processor of validated smart contracts as you can get.
And the user experience is, to put it charitably, absolutely awful — something it has in common with all other blockchains.*
(*You don’t need to look to the bottom of the page for the caveat here… I’ll help you out. Koinos is the exception. Yay! But I’m getting ahead of myself.)
In short, Ethereum does not allow for the majority of decentralized applications we can imagine today. Because, quite simply, it’s too expensive.
Sure, there are now “layer-2” solutions that can considerably lower the cost of a transaction. But it’s at the expense of further complexity, potential concessions in security, and other undesirable side-effects.
As Andrew Levine of Koinos Group rather elegantly put it, layer-2s are “a bug masquerading as a feature”.
So if Ethereum is so useless, why is it so valuable?
Forgive me. I didn’t in any way intend to imply that Ethereum is useless. It’s actually incredibly useful, but rather like Bitcoin, it’s useful in a way that isn’t exactly what its progenitors intended.
For instance — and it’s just one example — if you’re adding your hard-earned crypto to a yield-bearing protocol controlled by smart contracts, you’re more interested in the security of that protocol and transaction than the few bucks it might cost you. So for DeFi (decentralized finance) participants, the stability, reliability and proven track record of Ethereum are extremely attractive.
Ethereum’s interoperability, ubiquity, and security are all advantages — and they might last for years. Or they might not. It kinda depends on the crypto industry’s real appetite for mass adoption of Web3 technology, which is oft-cited in marketing materials and seldom-evidenced in action.
Anyway, my point is that both Bitcoin and Ethereum emerged to solve problems that they didn’t end up solving, even if they solved other ones along the way.
And of course, this is not a dig at either protocol. Bitcoin is why I’m in crypto. Ethereum is an elegant work of staggering genius. But I suspect that in 20 years, both will be seen as the forerunners of something else.
In other words, it’s okay to hold two ideas in one head. We can revere Karl Benz and Henry Ford as extraordinary pioneers, while accepting that the Model T isn’t the pinnacle of modern automotive technology.
What about all those other blockchains?
Since Ethereum launched in 2015, plenty of foundational blockchains have launched with the promise of faster, cheaper transactions.
Solana, Avalanche, Algorand, Internet Computer, Binance Chain, Ton, NEAR, Aptos, Sui… the list goes on and on.
And some of them do indeed provide major advantages over Ethereum — lower costs, faster times to finality, more transactions per second.
Essentially they provide iterative improvements over their predecessors.
But — and this point is absolutely crucial to my argument for Koinos — there is a difference between ‘cheap’ and ‘free’ that radically changes the accessibility of Web3.
And it’s not just the cost.
Plenty of people in the world of crypto claim that because Solana fees, for example, are a fraction of a cent, Solana has ‘solved’ the issue of Ethereum transaction costs.
This is somewhat true for crypto-natives. We’ve been conditioned to accept that every transaction has a financial cost, and that to pay for it we need to hold a native token. So we send our passports and KYC details to an exchange, followed by our fiat cash, which we exchange for the token (paying the exchange for the privilege), which we send to a wallet, where we authorize a transaction… and we deal with it.
But this is not the way the rest of the world works.
Crypto folks love to say that mass adoption is right around the corner. How many times have these platforms used phrases like “onboarding the next billion users” to promote their offerings?
So let’s consider what ‘mass adoption’ really means.
For the internet, probably the closest historical analog to crypto, it meant abstracting away all complexity. And keeping it free.
Here’s CERN (Conseil Européen pour la Recherche Nucléaire) in 2023, celebrating 30 years of the open internet following Tim Berners-Lee’s development of the HTML concept he created in 1989:
“The release of the World Wide Web was launched by an internal document, addressed “to whom it may concern” and signed by Hoogland and Weber. Back In 1993, copyright licensing standards were in the very first stages of development. In this first release, the document states that “CERN relinquishes all intellectual property rights to this code, both source and binary form, and permission is granted for anyone to use, duplicate, modify and redistribute it.””
“If we had not had that document, we would not have the Web,” said Berners-Lee in 2003.
It’s strange to think that the internet we take for granted could have been a closed-source, paywalled platform open to just a few scientists.
But if it had been closed source and paywalled, it would never have grown at the rate it did. It would never have had the level of developer adoption that it did.
Experimentation and iteration allowed us to find the most valuable applications… and no entrepreneur wants to pay to experiment and iterate beyond what’s necessary when there’s a cost involved. Any paywall at all, even a solitary cent, would have dramatically reduced adoption (and opened an opportunity for an alternative free solution).
Instead, today there are around 5.45 billion people connected to the internet. The five most valuable companies in the world are all tech companies.
The internet turned into kind of a big deal.
But that one decision — to keep it open source and free — is the reason. It gave the Sergeys and Larrys and Steves and Bills and Jeffs and Susans of this world the chance to build products that people really wanted.
Browsers made it virtually frictionless. And although we may pay fees to companies that connect us to the internet, and those that provide specific services we want to use… the internet itself is free.
Contrast the experience of opening a browser and typing (or telling your AI companion) the address of a website, with the user experience that crypto delivers today.
It’s not in the same league. It’s not even the same sport.
And it’s why crypto is stuck in a rut (and why Koinos digs us out of it).
Instead of being free, frictionless, and familiar, crypto is paid, complicated, and confusing.
What we really need, if we truly value the concepts of decentralization, data sovereignty, and disintermediated value exchange, is to be able to use these clever blockchain-based ideas with the same user experience as the internet. So that the market for applications is not just a few million nerdy enthusiasts, but a few BILLION regular human beings.
So let’s summarize this.
People don’t want to pay for what should be free.
They don’t want to do difficult things that should be easy.
They don’t want to change their behavior to fit crypto’s limitations.
And if we agree on that, we really can move on to how Koinos solves these problems.
Part Four: Feeless Begets Frictionless Begets Familiar
Solving the first problem — fees — is literally the way Koinos solves the other two problems.
Every other blockchain charges the user to transact. Which means they need to hold a token to pay for that transaction.
If the blockchain is free-to-use, then you don’t need to hold a token to use it. It’s Feeless.
If you don’t need to hold a token, you don’t have to go through the education and onboarding mess that I’ve already described. You can just open an app and use it. It’s Frictionless.
And if you don’t need to go through that whole onboarding nonsense, you can design apps that are just like the ones we use today. It’s Familiar.
The way this works is actually pretty simple. It’s an ownership model. When you own something, you don’t need to pay someone else to use it. You can just use it.
Bitcoin solved the problem of owning digital tokens in that you, and only you, can do whatever you want with that asset. But it doesn’t give you ownership over the network because in order to use the network you must pay block producers a fee.
Arguably the most transformational feature of Koinos is that it extends digital ownership to the network itself.
Owning the token is equivalent to owning a percentage of the network.
There are around 100 million KOIN powering the network. If you have a million KOIN, you should be able to control about 1% of the network. If you want to use the network yourself, you should be able to use about 1% of the network’s resources. If you want to let other people use the network for free, you should be able to let them use about 1% of the network’s resources.
That’s how you get tokenless access to the blockchain.
This is huge, because it means that owning KOIN is more like owning a piece of digital real estate. And it can accrue value to the holder in four ways:
You can develop an app that has a blockchain component, and then charge users for access to that app — without having to pay for access to the blockchain yourself.
(Think of other blockchains as similar to the App Store: Usually, integrating blockchain means there is a COST to use the network, just like the 30% you have to pay to Apple. But with Koinos, there is no fee.)
You can offer free access to users to maximize growth, while charging for products and services — just like traditional online businesses.
(Removing friction and fees from the onboarding process gives you a much better chance of building a scalable and profitable business. This is why Google doesn’t charge you to search on its homepage, and instead moves the monetization of the platform elsewhere.)
You can rent out your KOIN’s mana to other developers.
(This would allow developers to build blockchain-based apps without even needing to secure their KOIN first, lowering their startup costs and allowing them to scale as demand increases. And the owner of the KOIN can garner a yield on their holding.)
The value of KOIN may appreciate as the network becomes busier.
(This is the other half of the dual-revenue model of which real estate landlords are so enamored, because even as they monetize their asset through rent, that asset is also appreciating in value over time — especially if the neighborhood becomes more popular.)
There are costs to maintaining any online business, but most don’t try to recoup that cost the moment a potential customer “comes in the door.” Google doesn’t do that. Amazon doesn’t do that. But other blockchains do.
Koinos changes the paradigm. It lets you choose your monetization strategy as a developer or entrepreneur, and eliminates the pain points that stand in the way of acquiring customers.
Understanding Mana — The Key To Free
The way Koinos has solved the fee problem is by introducing mana, which is a property of the native token of the Koinos blockchain — KOIN.
As noted above, holding KOIN entitles you to a share of the network, in perpetuity, for as long as you hold the asset.
Mana is not a separate token, but it’s used to pay for transactions on the Koinos blockchain. Every KOIN ‘contains’ mana, and some of that mana is depleted when you execute a transaction.
But — here’s the clever bit — the mana regenerates over a few days.
While it’s regenerating, the KOIN that contains that mana is locked. It can’t be transferred until the mana is automatically replenished.
In other words, as the sharper minds will have deduced, you’re paying for your transaction with time — not with money.
And in time, your mana regenerates, giving you back your KOIN.
How does this solve the problem of friction and familiarity? Well, it gets even more clever here.
Anybody who’s building an application on the Koinos blockchain can DELEGATE their mana to a smart contract… which means that they can pay for their users’ transactions.
So if you want to build, say, a social network… you can figure out how much KOIN / mana you need to pay the transaction costs of the first 10,000 users. Let’s say you expect 10,000 on chain transactions in one day (because, for example, each user gets to mint one non-fungible token (NFT) every day).
Then you would need to hold a certain amount of KOIN to provide that mana to your users.
But the user experience would be entirely unlike any other crypto experience that exists today.
All the user would have to do is open the app, click on MINT NFT… and it’s done. You have now established ownership of your post or picture on the Koinos blockchain.
No exchange. No KYC. No token. No friction.
You had the Familiar experience of opening an app and simply using it.
Gamers have always had a particular skepticism about crypto — after all, why complicate things? So we can’t move our hard-won battle rep from one game to another, that sucks, but oh well, it is what it is.
Well — what if you could? Once something like this becomes possible, the next step is for it to become probable, and then it becomes ubiquitous… I know plenty of blockchain gaming advocates who are utterly convinced that in five years, most video games will incorporate Web3 elements like data portability.
And of course, these are just two of countless potential consumer users of a feeless blockchain. I won’t even begin on the potential B2B uses — but any kind of microtransaction would be fair game.
All of this user-friendliness would be fantastic for crypto adoption even if it made the people who invented the technology a lot of money.
But in fact… There’s a lot more to Koinos than simply creating a Web3 experience that can work for everyone.
Part Five: Koinos & The Original Ethos Of Crypto
Decentralization
There are many reasons behind the rise of cryptographically-secure digital assets. But among them, three proximate factors stand out.
1 — The global financial crisis of 2008
2 — The rise of ‘surveillance capitalism’ as enabled by centralized tech companies
3 — An urgent and debilitating worldwide shortage of monkey jpegs
Sorry. Just wanted to make sure you’re paying attention.
You can read about these phenomena elsewhere, so I’ll just remind you of what was inscribed in the Bitcoin genesis block — a headline from the Times of London:
‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.’
Bitcoin was posited as a decentralized alternative to banks and government-controlled money. As Nakamoto wrote, “The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
So we can infer that Bitcoin was a reaction to the financial collapse even if Nakamoto him, her, or themselves was not particularly political in their writings (although they did reference libertarianism).
The Bitcoin white paper by Satoshi Nakamoto opens with these words:
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
While there are many reasons for the financial crisis of 2008, and that dictated the efforts to mitigate it, there is one thing they all have in common: Centralization.
Small groups of bankers got us into the mess. Small groups of regulators failed to see the potential issues of subprime mortgages. Small groups of politicians deregulated the industry and bailed out the banks. And at every step, the response to the economic meltdown that impacted billions of people worldwide was overseen and managed by the people responsible for the policies and procedures that led to it.
Bitcoin was always supposed to be decentralized, even if the word never actually appears in the white paper. No one person or entity was in control.
It’s important to note here that one of the most important qualities of decentralization is censorship-resistance. The more decentralized a network, the harder it is to shut down. At the time of writing, even Google isn’t immune to this threat — as a centralized company, it’s the target of a Department of Justice antitrust suit that could break up the business.
Koinos is completely decentralized. Nobody owns it, nobody controls it, nobody received tokens at launch unless they mined them or paid for them.
And it is completely community-governed. (Governance is entirely on-chain, and has been from day one.)
Fairness
Bitcoin launched with a Proof of Work mechanism that allowed almost anyone to mine it — at least, at the beginning.
And that’s exactly how Koinos launched, too.
The term ‘fair launch’ may seem pervasive in crypto today, but for years and years this was not the case.
In fact, over the last decade crypto founders have found innumerable ways to give themselves a distinct — and unfair — advantage over their users. The decentralization that was so important to Nakamoto has been perverted by ICOs, IDOs, IEOs, pre-mines, and various other clever-but-deeply-centralized mechanisms for launching cryptocurrencies, all of which have one thing in common: They have enriched the few at the expense of the many.
But Koinos is different.
After announcing the mining period, the people who built the blockchain released a CPU mining software that ran a Proof of Work consensus algorithm. The more computing power that early miners put into the mining, the more KOIN they minted. The resulting KOIN were originally created as Ethereum-native ERC-20 tokens, and after the mining period users could claim their ERC-20s for an equivalent number of native mainnet Koinos tokens.
Mining continued for around 6 months, until around 99.74 million tokens had been created.
During this time, enterprising folks created pairs on Uniswap, a decentralized exchange, to buy and sell the ERC-20 tokens. So anyone who held KOIN at mainnet either mined or bought their tokens at market rate, with none held back to be doled out as ‘free money’ for founders or investors.
It should be noted here that even the original PoW mining was made as fair as possible: Most mining these days is performed on expensive graphics cards (GPUs) that the average computer user doesn’t necessarily have available. The Koinos mining used the central processing unit (CPU) — something that every computer has, by definition.
Environmental considerations
Bitcoin is not very environmentally-friendly these days. And this might be fairly considered to be a ‘failure of fairness’.
After all, why should residents of towns in Texas have to deal with the constant hum of Bitcoin mining farms? Why should the population of the world have to suffer amplification of human-caused climate change, as the energy required to produce bitcoins continues to ramp up? The only winners here are the miners themselves. Which doesn’t seem very fair at all.
There are plenty of arguments that make it clear that Bitcoin mining is neither as bad for the environment as it’s made out to be, nor anything like as good as it should be.
But Koinos neatly side steps that entire minefield.
After the initial Proof of Work mining period, the blockchain launched with a novel Proof of Burn consensus mechanism that allows people to run the blockchain on their existing hardware, barely increasing energy use at all.
Proof of Burn differs very significantly from Proof of Work, because it doesn’t require a major investment into the ASIC mining rigs that Bitcoin requires. All the ‘mining’ of new KOIN (which increases the supply by about 2% a year, rewarding miners for securing the network) is done virtually. No capital equipment or intensive energy use required.
You can read all about this process in the official documentation, but for the sake of simplicity here are the more important advantages of Proof of Burn, each of which enhances the inherent fairness of the blockchain — not just for its users and miners, but for the world at large.
It does not require a capital investment into mining hardware.
It does not require intensive electricity usage.
It does not require that a miner locate to a region with cheap electricity, thus promoting geographical decentralization as well as financial fairness.
Only miners who have committed their KOIN to the network in this way are able to participate in governance, which ensures that decisions are not necessarily made by those with the most money — but by those with the most commitment to the network.
Part Six: Other Koinos Advantages
Now that you have an idea of the problem that Koinos solves, and the kind of people who built it, you won’t be surprised to hear that there are other slightly more technical improvements over other blockchains.
For instance — if you want to code smart contracts on Ethereum, you need to learn a specific programming language, Solidity.
Some estimates suggest there are up to 200,000 Solidity developers in the world. Electric Capital tracks developer statistics, and suggests that there were just under 7,900 active Ethereum developers in December of 2023.
Stack Overflow estimates that Solidity is used by around 1.1% of developers, compared to the 62.3% of devs who use JavaScript. Restricting the pool of developers hinders innovation.
So, if one of the goals of Koinos is to bring Web3 to everyone — well, that includes developers.
The key to meeting developers where they are is using the technologies they already use, including the programming languages they already know.
Koinos was built from the ground up on top of widely used, open source software, with robust language support. Technologies like WASM and Protobuf were created by the biggest tech companies in the world (like Google) and continue to be foundational technologies within their infrastructure — which means they are continuously improving.
This means Koinos is constantly getting performance improvements, new tools, and software enhancements with zero effort or cost.
And because these technologies are widely used and designed for new language support, Koinos can also get new programming languages.
Koinos already has TypeScript and C++ smart contracts (the two most common programming languages in the world) and C and Rust have been added to the roadmap. Many more languages are possible.
So instead of trying to bludgeon developers into learning an obscure and proprietary language, Koinos takes the best principles of open source technology and applies them to blockchain.
There are other technical advantages: Koinos does not need to fork to upgrade the blockchain, for example. This negates the need for all kinds of hassle and limits the possibility of unpleasant potential outcomes (Bitcoin SV, anyone?) and you can read about the governance procedure needed to do this here.
There are other features of Koinos’ architecture that take it significantly beyond earlier blockchain capabilities, but explaining them is better-suited to technical documentation — available here.
The takeaway is that Koinos is thoroughly modern in its design, and that it’s fast, scalable, secure and upgradeable.
Part Seven: Why Koinos: Web3 For Everyone
In this essay I’ve argued several points.
The internet — and technology in general — has become enshittified, and it’s getting worse.
This is a failure of centralization.
Web3 is a collection of technologies that have the potential to return agency and power to users.
Existing Web3 platforms have a terrible user experience due to their reliance on fees, which creates an insurmountable obstacle to mass adoption.
People in general don’t want to pay for what should be free, or to abandon ease of use in favor of a poor user experience.
Koinos is a feeless blockchain that allows builders to create familiar and frictionless experiences akin to how we use the internet today.
Koinos is truly decentralized and fair, which mitigates the potential for any single entity to change its nature for their own benefit.
Koinos is a logical foundational step toward Web3 for Everyone.
I’m not suggesting that the internet will be magically fixed next month if everyone hops over to Koinos. Or to Web3, for that matter. The evolution of self-sovereign technologies might even take longer to come to fruition than the internet itself — instead of a blue sky opportunity, this is a road already paved by Google and Meta for their own benefit. They’re going to make it tough for Web3 to break through.
But I believe that some version of Web3 is inevitable. At least, it is if it can deliver the same user experience as the existing internet, but with the security, privacy and ownership that blockchain-based solutions can deliver.
The backlash against Big Tech may seem contained for now, but human beings have something of a habit of revolting against usurious and oppressive systems.
Bitcoin arose from the ashes of the global financial crisis of 2008. And while I hope that it won’t take a similarly painful experience for us all to recognize that the tentacles of Big Tech have reached too far into our lives, it’s precisely because of the continuing failure of centralization that we need to take back control of our data, our interactions, the reality-based information we need to make informed decisions, and of course, our finances.
