A startup co-founded by a graduate from the Lahore University of Management Sciences (LUMS) has received $4 million in a new round of funding led by Union Square Ventures and Lux Capital. The decentralized internet and web developer platform, Blockstack, is making a more secure parallel universe to what we know as the web.
Other investors included Digital Currency Group, Compound, Version One, Kal Vepuri, Rising Tide, and Naval Ravikant of AngelList. This new round of investment brings the company’s total funding to $5.3 million altogether. It was incubated at Y Combinator, which Fortune magazine has called “a spawning ground for emerging tech giants.”
Blockstack is using bitcoin technology called blockchain to make a new web infrastructure that takes control of data on the internet from the hands of giant corporations such as Google and Facebook and gives it back to the users. Blockstack does this by bypassing the need to make accounts in every other website. For sites that have been made using Blockstack’s technology, you simply give them access to a profile that only you control and whose access you can take away at any time.
Muneeb Ali, co-founder of Blockstack, explains that the company is more about enabling a direct relationship between app developers and users. Currently, there are a few large companies like Google or Facebook have a monopoly on internet services. “If you’re a small startup that requires access to user data on Google or Facebook then you can get shut down any day. It’s more about removing these large third parties from the picture,” he says.
Tom Simonite in his article One Startup’s Vision to Reinvent the Web for Better Privacy says that Blockstack uses the digital ledger called blockchain to make an independent identity system for everyone. This system will be able to track and record usernames as well as the associated encryption keys that would allow a person to have control of their own information and identity.
“This private key is so secure that if someone wants to randomly guess it or crack it, they would need more energy than is present in this entire solar system,” said Ali in a TEDx talk delivered earlier this year. “This is mathematics and cryptography keeping you secure.”
Technology giant, Microsoft, is already collaborating with Blockstack to build the blockchain-based ID system.
Using Blockstack’s open source software, you can still use existing browsers such as Google Chrome or Internet Explorer to use any websites or applications that been made with it. Blockstack is also making the first major browser for this blockchain-backed internet. The browser will be will be released later this year, Ali adds.
With such a decentralized system, however, come concerns about the lack of a central authority being there to intercede and resolve disputes. Blockstack gives some of this authority to app developers. Say a decentralized app doesn’t agree with the user “patrick.id“, then they could add patrick.id to its list of banned users. But an external party like Facebook (or any government) will not be able to interfere with the relationship of the app developer and the user. On the other hand, if an app is banning users without any good reason, some other app developer could step in and users could also switch to the competitor.
Users will also get more choice between apps as the bar to develop apps goes down, and it’s easy to build new apps and get access to user data. Ali says, “Lowering the friction to switching apps and removing dependency on big third-parties helps everyone in the ecosystem.”
A blockchain-based solution like Blockstack also makes it harder for any government to tamper with core internet infrastructure. In the past, governments like Turkey, China, and Pakistan have (intentionally or unintentionally) interfered with the domain naming system (DNS) and public-key infrastructure (PKI). In 2008, Pakistan unintentionally blocked YouTube for foreign countries by announcing false Border Gateway Protocol (BGP) routes to it. Pakistan has blocked YouTube (at the DNS level) several times since 2008 as well.
Ali says, “We have not yet explored securing BGP routes with Blockstack, but we have implemented a fully-functional DNS and PKI that is much more resilient to tampering than traditional DNS/PKI.” Since Blockstack users own their own identity outside the control of any central authority, it will be harder to censor individual users.