In light of the recent uprise against the proposed repeal of Net Neutrality by the FCC comes a whole line of predicted changes following a successful passing—economic changes being the most concerning, especially for the crypto market. Now knowing how vital network dependency is for running exchanges in the cryptocurrency market, creating new regulations for speed throttling and control of data caps is a risk which could affect it negatively. What does ending Net Neutrality ultimately mean for the future of cryptocurrencies?
WHAT’S NET NEUTRALITY?
Net neutrality is defined as the principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites. In more basic terms, having net neutrality in place prevents ISPs from heavily restricting or limiting internet functionality and/or speed.
Keeping in mind that the result of the changes made to Neutrality are dramatic, the primary market directly (and inherently most) affected would be those keeping and monitoring networks. Comcast and AT&T, the leading advocates for the repeal, look to be able to throttle speeds, charge per site, and include data caps in their future business models. As a result, networks depending on high speeds (such as the cryptocurrency exchanges) will be directly affected.
One of the distinct “advantages”—or perhaps changes in the FCC’s favor—is the ability to limit internet traffic speeds, known as throttling. This aspect of Net Neutrality will allow companies, Comcast for example, to provide home internet subscribers a variety of plans with different speeds for any given reason. No longer do they have to justify (or base) the price from speeds alone, but they can even go as far as throttling down to specific sites, such as Facebook and YouTube.
This can be dangerous in the way that consistent, steady connections are necessary for streaming real-time updates and exchange rates in crypto trade markets. Having reduced speeds may prevent investors from making accurate trades in real-time. A simple way in which an ISP can affect the attractiveness of cryptocurrency investment is by slowing down broadband speeds of blockchain sites, which would in turn slow down transaction speeds. Yet, the speed (or lack thereof) of transactions has seemingly had zero effect on investment. Thus, cryptocurrencies themselves aren’t necessarily at risk unless ISPs conduct structural attacks on blockchain servers.
By nature, blockchains are immune to human intervention. However, the internet provider holds the ability to implement a partition or delay attack. These attacks could effectively create a blackhole, where all bitcoin transactions are lost and made impossible to track. This could lead to wasted processing power and doubled spending for miners. However, these concerns are coming from the lawyers and businessmen, not the engineers.
Engineers see this “problem” as a perfect example of why blockchain was designed the way it was. To them, repealing net neutrality regulations would invite the possibility of having to reposition themselves back onto an I2P network, like Kovri.
Another avid part of ending Neutrality is the ability being given to ISPs to include data caps to customers’ packages. Rather than having a perceived “unlimited” amount of network availability monthly, an ISP will legally be able to set limits to home networks, in the same way Verizon and AT&T set limits to cellular data through GSM/CDMA towers.
Given the ultimate power to handle connections however an ISP sees fit, blocking specific sites (or in this case, even specific cryptocurrencies) is hazardous to exchanges. Since ISPs look to compete with other providers, siding with an exchange of their choice may lead in the connection to other exchanges (sided with a competitor) being slowed down, or even blocked.
Net neutrality—while it does embody the decentralization mantra of blockchain—is far from a requirement for the functionality of blockchain. The future of the monetary system is a global currency free from human intervention. If Bitcoin fails to survive the coming storm, it would be because of structural errors, not ISP intervention. In addition, if the ISPs start a war against blockchain and cryptocurrencies, the internet may experience an accelerated evolution of decentralization. In the context of blockchain and cryptocurrencies, net neutrality could be a positive thing, forcing further development in the industry.
On the flip side, the potential damage is massive, especially considering the market size and growth to date. Two weeks from today, the decision will be made by the FCC whether net neutrality will live on, and only until it ends will we be able to see its true impact on the crypto market.