Bob Metcalfe, Creator of Ethernet: Web3 Will Have All Kinds of “Network Effects”

When Bob Metcalfe was selling Ethernet to the world as a new networking technology in the 1980s at 3Com Corp, he had a clever selling point: You’ll get more value out of the product if you buy more of it.

What was once a cheeky argument hid a deeper element of truth: networks are more valuable the more things they connect.

Later, Bob Metcalfe refined what he was talking about, formulating what has been called “Metcalfe’s Law”. This law says that “the value of the network increases as the square of the number of entities participating in the network”, the entities can be computers, but also humans, as in the case of Facebook. The value is squared because it is the number of connections that can be formed.

According to Bob Metcalfe, things that get better in this way have what he calls “network effects,” a kind of centripetal force where more and more participants induce even more participation, in a virtuous cycle. Facebook is proof of this: The more participants, the more other participants.

“The key is connectivity”

Bob Metcalfe is still fine-tuning his case for his law and learning along the way. “There’s going to be all kinds of network effects in Web3,” Bob Metcalfe said in an informal meeting in New York City on the sidelines of a knowledge graph conferencea conference where enthusiasts share technologies, techniques and best practices.

“For the first time, I’m trying to say exactly what kinds of value are created by networks,” Bob Metcalfe told ZDNet at the event. “What I learned today is that knowledge graphs can go so much further if they’re decentralized,” said Bob Metcalfe. “The key is connectivity.”

Earlier in the day, he had given a talk on the main stage of the KGC, titled “Network Effects in Web3In this talk, Bob Metcalfe explained that “networks are valuable” in many ways. They provide “data collection” value, the ability to get data from many participants. Sharing, such as sharing hard drives or files. Netflix, according to Bob Metcalfe, has “distribution value – they distribute content and it has value.”

There will be new forms of value creation, believes Bob Metcalfe, based on startups that combine knowledge graphs with connectivity. The event was organized by one such startup, OriginTrail, founded in 2013, with official headquarters in Ljubljana, Slovenia, and offices in Gibraltar and the United States. Bob Metcalfe is a consultant with OriginTrail.

A decentralized knowledge graph

OriginTrail creates what it calls the first “decentralized” knowledge graph, a knowledge graph whose nodes can be networked.

The basic idea is that while blockchain “layer 1” technologies authenticate items, OriginTrail’s distributed knowledge graph “layer 2” technology allows you to query and interact with items that have been authenticated. Anything unique has a Universal Asset Locator (UAL), analogous to URLs on the web. UALs are intended to conform to the W3C specification for “decentralized identifiers“. The form looks like an HTTP address, preceded by the identifying tag “dkg://”, for “distributed knowledge graph”, followed by the address of the particular element.

Transactions can occur when people “publish” things on the internet with a unique UAL – through a simple “create” statement – which is then recorded by the decentralized knowledge graph of the nodes, currently numbering two thousand. .

Everything published is a single asset, a digital twin, so it can represent real-world objects, like sneakers or whiskey. It can be sold to another party, which “takes control of the state of that graph,” as Rakic ​​explains, by giving the person the NFT that has the UAL.

The nodes each have graph databases that contain pieces of the collective graph, and they all operate permissionless, peer-to-peer, analogous to how blockchains operate. As with blockchains, those who run nodes to verify published items are rewarded by the people who publish those items.

Semantic Web3

OriginTrail’s knowledge graph relies on several layer 1 blockchains, but the company will soon introduce its own blockchain, operating as a function of the Polkadot blockchain. As co-founder and CTO Branimir Rakic ​​explained during a technical presentation, “blockchains are not good databases.” Blockchains can be queried, but only in a limited way, Branimir Rakic ​​said.

What is needed, argues Branimir Rakic, is a “semantic network” on top of blockchains. This is what the company offers with its distributed knowledge graph.

By combining Tim Berners-Lee’s notion of the semantic web with Web3, you will get “The Semantic Web3”, said Branimir Rakic.

OriginTrail’s approach hailed by creator of Ethernet

“I like the direction OriginTrail’s approach is taking,” Metcalfe said. “All of these elements – DeFi, DOA, cryptocurrencies – all of the decentralized elements of Web3 are going in the direction of value sharing,” Bob Metcalfe said.

Bob Metcalfe has also indicated that decentralized knowledge graphs will make possible a kind of eternal spring for artificial intelligence. “AI was invented around 1968 when I was a graduate student,” he said. “And for years, AI was going up and then down, and it was going down because the AI ​​was running out of data,” Bob Metcalfe explained, “AI is about data.”

“Well, it’s not going to fall, it’s going to keep going up, because decentralized knowledge graphs are going to give AI more and more data. »

Bob Metcalfe, who served as a startup contest judge for a decade, was asked by ZDNet how he rates OriginTrail’s chances of success as a business. “It’s weakness is that it’s too complicated to explain” to ordinary people, Bob Metcalfe said of the technology. OriginTrail technology is a bit like middleware, a category that only tends to be of interest to a handful of people. “Yes, and I am one of them,” he added.

Despite the complexity of the technology, “what they are doing is in step with the evolution of things”. More importantly, he has accepted the role of advisor because he is learning from what the company is doing, learning about the new forms of value that will be there.

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Bob Metcalfe, Creator of Ethernet: Web3 Will Have All Kinds of “Network Effects”

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