OK I will try to explain the problem they are addressing and how the problem is addressed in their best case scenario.
Problem: A whole suite of internet services cannot be made available or can only be made available at user inconvenience. Because there is a tiny little cost for each additional user of the service, like a thousandth or millionth of a penny cost, and there is no way to bill users in that small of increments.
So we have this fundamental problem with bringing services to people, services that would improve their lives, that would improve society, that would make everyone happier, more productive, less inconvenienced, what have you. But those services canât be provided, even though they were used billions of times by millions of people, because the total cost for all that would only be, say $1 million. And there is no way for 100 million people to pay $1 million aggregate, with individual payments, to a service provider for 10 billion transactions. Because each transaction is billed and paid in the average amount of $0.0001, and although computing power has long surpassed the point where it costs far less than a hundredth of a penny in electricity to process the ledger entry, invoice generation, and all the processing of the transaction, the financial system as a social institution, has not kept up the pace and provided a mechanism as of yet to effect the transfer of that hundredth of a penny from the service recipient to the service provider.
These transactions have value, (demand), but they cost resources to provide (supply). So they canât be made free for everyone to use. This is called the tragedy of the commons. It was solved in Western society by common law beginning with the magna carta, ensuring strong property rights immune to takings without compensation, but this is a lecture about the future, not the past.
I bring up the past because there are long-standing problems with computers and humans coexisting on a network, many of which the maidsafe project has had to struggle with, and one of bitcoinâs major innovations was the use of proof of work to solve sibil attacks and peer to peer network architecture to avoid ddos attacks.
So the tragedy of the commons is central to these attacks. As a conceptual thing, you can think of a game preserve, a well, a river, an ocean.
This is turning into a book and Iâm tired of typing and have other things to do, soâŚ
Internet of things is going to require objects like your car, 3d printer, cell phone, microwave, oven, washing machine, whatever object to be able to pass an âare you a _____ machineâ? test like we currently rely on âare you a humanâ tests to do, which can really only be done with secure handshakes that accomplish device authentication. Because machines canât do captcha, so they need to have some store of value that they can use to stamp handshakes or else handshakes could be faked for free by emulators, since the chip in your car is never going to be 1/100 as smart as the chips in your botnet.
