Nowadays, it seems like everyone is into video streaming. The pandemic accelerated the growth of streaming platforms across the globe, and popular video streaming platforms like Hulu, Disney+, and HBO Max have benefitted as a result. However, there are also many examples of failed attempts, including Quibi and CNN+.
Video streaming is one of the most cutthroat businesses out there. When it comes down to it, there are two types of video streaming platforms, ads-based and subscription-based platforms. An example of an ads-based platform is YouTube, while Netflix is an example of a subscription-based platform.
Centralization is the connector between these two platforms. While subscription-based platforms are facing more and more competition, and Netflix is losing its dominant position in the market, ads-based platforms are still under the YouTube monopoly.
Dissenters usually criticize YouTube for its algorithms, which can censor content. Without getting into politics, the current ecosystem’s lack of transparency is breeding new types of platforms with mantras that emphasize decentralization.What’s interesting about these new decentralized platforms is how they implement technology as a guarantor of their ideals, preventing censorship or control of the entire network by a single entity.
In this article, we’ll explore the technical side of these decentralized platforms.
Video streaming is decentralized when a single entity cannot control a streaming service’s content delivery. It’s important to note the difference between decentralized and distributed video streaming.
While distributed video streaming means that the content delivery network spreads across the globe with one entity behind it, decentralization removes that control entirely. It creates a network where participants can reach a consensus on what the network will do, adding an extra layer of democracy and giving more power to the community.
Decentralized video streaming platforms are usually community-owned. Blockchains enable ownership within the platform and are a basis for decentralization, providing the perfect base layer for applications. The blockchain layer acts as a thin layer that connects all the pieces through a single decentralized ledger.
All transactions off-chain must submit proof to the blockchain layer to verify if the transaction is legitimate. Therefore, the blockchain becomes the single source of truth. Still, because blockchains cannot store complex data sources like videos or images, off-chain solutions like IPFS or simple peer-to-peer storage makes the data available.
While the blockchain becomes the base layer, a peer-to-peer protocol like IPFS or BitTorrent is a prerequisite to full decentralization. Blockchains are inherently decentralized, and anyone will be able to hold a copy of the entire blockchain if they decide to run their own node. On the other hand, filesystems, which are usually centralized, can become increasingly difficult to use without a peer-to-peer protocol.
Services like Google Cloud Storage, Amazon S3, and Azure Storage serve as examples of how effective centralized storage can be. But, to give the users a fully-decentralized experience, you can’t rely on those technologies within the decentralized ecosystem.
Monetization remains the glaring problem for decentralized video streaming platforms. Compared to the convenience of centralized platforms like YouTube, decentralized video streaming doesn’t stand a chance.
However, in this section, we’ll explore the technical problems rather than pure business model issues. The first problems that come to mind include file storage and rights management. In addition, a decentralized ecosystem is not free from the necessity of protecting copyright materials created by original artists. Creators must consider implementing checks and balances to disincentivize malicious users that try to disrupt the ecosystem.
In a peer-to-peer network, users need to store video files and provide a strong internet connection for peer connections. Finally, there is the issue of content-specific monetization schemes. Let’s explore these in more depth, analyzing the possible solutions.
Peer-to-peer filesystems will always run into the problem of file availability. Storage is expensive, and without clear incentives, users will not host files on their systems, let alone maintain a healthy internet connection for other users to access.
As an alternative to a file-sharing ecosystem, peer-to-peer file sharing can fail because of the lack of providers. You can only get your files when another peer is online and is willing to provide you with the file. Therefore, you would need at minimum one other peer for file sharing. In a peer-to-peer ecosystem like this, the creators can resort to a central relay node to provide missing files when all peers are disconnected.
However, doing so would lead to the original centralization problem. If there is a centralized force that can provide for the entire community, what are the incentives for the community to be self-sustainable? In this case, many projects provide a solution for persistent decentralized data sharing. Projects like Arweave, Filecoin, and BitTorrent provide different solutions to the same problem.
Arweave is a permanent, decentralized data storage system that is mainly used for archiving the web. Arweave relies on a one-stop payment scheme to ensure the availability of the archive. Users pay upfront to archive their files within the network.
Filecoin is a protocol that allows users to rent out available hard-drive space. Filecoin serves as a peer-to-peer filesystem that builds on top of IPFS to allow users who have excess hard-drive space to rent out their system to mine for Filecoin. Filecoin might sound like a pay-as-you-go system, similar to Google Drive. It is one of the best alternatives for peer-to-peer file systems in my opinion.
You can also use IPFS, InterPlanetary File System, to store data. But, plain vanilla IPFS still requires you to host your files or pay for a service to host your files if you want to keep them available within the network. DTube, a decentralized video streaming app that is a direct competitor to YouTube, utilizes IPFS for file storage and uses the Steemit blockchain to incentivize its creators to create quality content.
BitTorrent is the most interesting of the five options in my opinion. BitTorrent is a peer-to-peer protocol that doesn’t rely on users to host nodes. Instead, it uses a concept called seeders and leechers. Seeders are users who have downloaded files and are providing them to the other users, essentially using their network bandwidth to upload the files to the network. Leechers are the users requesting a file and downloading the files into the filesystem. A swarm is an aggregate of seeders and leechers in the BitTorrent ecosystem.
In BitTorrent, seeders are rewarded BitTorrent coins for their contributions to the network. In contrast, leechers will need to spend BitTorrent tokens to download files or increase download speeds.
While BitTorrent might sound like the most decentralized option compared to the rest, it relies on a central tracking server to record the IPs of the seeders and give them to the requesting leechers of a file. Like any other peer-to-peer file sharing protocol, you cannot download files if there aren’t any seeders.
Theta is a blockchain infrastructure that provides decentralized video streaming and is the leading and most well-known infrastructure project among the ones mentioned. Theta uses a centralized peer-to-peer storage solution called the Theta EdgeStore. As part of its storage solution, Theta’s decentralized storage is compatible with centralized cloud infrastructure, including AWS S3 and Google Cloud Storage. The centralized cloud provides high-reliability storage, while the decentralized portion functions as a fault tolerance if the cost of using centralized systems is too high.
Theta will also have a peer-to-peer sharing network to assist in the streams delivered. However, the peer-to-peer sharing network does not store videos but will only assist in delivering the content.
Once you have the persistent storage figured out, the next major problem would be copyright. You cannot leave copyright material out in the open for everyone to see without infringing upon the rights of the original creators. This is one of the main issues behind peer-to-peer file sharing. While the technology behind peer-to-peer file sharing isn’t illegal, using it to share copyrighted material is still illegal.
Unfortunately, you can’t rely on the honesty or kindness of strangers to protect your copyright. Ideally, you’d find a way to protect your files directly without impeding how you can monetize them. A rights management application usually encodes and encrypts your content, making it unusable for anyone who has direct access to the files in the storage. But, if you want to encode the content, a separate transcoder will transpile it.
There are many examples of content encryption within peer-to-peer file sharing solutions. Usually, those relying on pay-per-view architecture require file encoding to prevent content from being siphoned out of the network. There are currently three well-known platforms that provide these services: LBRY, Livepeer, and Theta.
LBRY is a decentralized content-sharing platform built to counter centralized content-sharing services like YouTube and create a user-owned ecosystem. LBRY users build their applications on top of the platform, with Odysee as a good example. Before a user stores content on their decentralized ecosystem, LBRY encodes the content by splitting it into smaller chunks and encrypting it. Each chunk could be in separate servers, and LBRY does the reverse to watch the video. Then, it will gather all the smaller chunks together, decrypt them, and concatenate them into a single file.
Livepeer is a protocol that incentivizes decentralized live video streaming. Livepeer provides economic incentives to store the content and to have users host transcoders that can transpile the content. Compared to LBRY, Livepeer monetizes both the content storage and content transcoding process. Storage monetization uses IPFS/Filecoin, with users paying the storage providers to persist their data. However, the novelty in Livepeer’s solution is in their transcoding process.
Livepeer implements a proof-of-stake mechanism for transcoding. Each transcoder will have to stake a certain amount of Livepeer tokens to receive transcoding jobs from the Livepeer ecosystem. Instead of using cryptography, Livepeer relies on incentives to keep the content protected. Transcoders will have full access to the entire Livepeer media library. Still, it is important to note that to earn money, each transcoder will have a reputation to maintain. Transcoders stake to disincentivize Livepeer nodes from dishonesty by slashing their stake if negligence is proven.
Among the three mentioned, Theta is the most developed, with multiple distributed and decentralized systems in its overall infrastructure. Theta has a Metachain that will be the single source of truth. While all operations within the Theta ecosystem are off-chain, Theta utilizes zero-knowledge proofs to verify data submitted into the Metachain.
Theta’s content-encryption platform relies heavily on the Metachain. To authenticate themselves and view paywalled content, users must purchase an NFT.
The encoding process is similar to Livepeer’s solution. First, a single Theta Video API will serve as an abstraction layer for encoding and delivery infrastructure. A key-server within the encoding infrastructure will store all the existing decryption keys for each piece of content.
Through the Theta Video API, a consumer must purchase an NFT and authenticate their ownership with the Metachain. If the validation is successful, Theta Video API will retrieve the decryption key. Once the Theta Video API retrieves the decryption key, it will connect to the delivery infrastructure to decrypt the content for the consumer.
Content encryption is a problem shared by centralized and decentralized video streaming applications. Copyrighted materials are valuable and need to be encrypted. By far, decentralized content protection is the hardest problem to solve.
When using a peer-to-peer video streaming ecosystem, you trust the other computers in your network to give you correct, untampered data. But, how do you enforce that in a peer-to-peer ecosystem? Projects like BitTorrent, IPFS, and Arweave are relatively safe software. However, you have to be diligent enough to double-check what you are downloading from these platforms because the dangers are mostly the files themselves.
To avoid negligent storage providers and malicious protocols, Filecoin slashes its rewards to incentivize good behavior.The key is for providers have skin in the game, therefore having incentives to persist files.
Because you’ll stream videos, you’ll only accept the video extension file type. While file reliability will still be an issue, you can brush it off easily as a potential vulnerability risk if you receive a different file extension.
Additionally, most decentralized video streaming platforms don’t let you access files directly. Instead, you interact with them through their web application. It gives you an extra layer of security to know that you won’t execute videos on your device, and the browser copies the videos without saving them.
Blockchain-based video streaming platforms transcode videos for each device. So, each platform needs a secure way of transcoding files to the consumers. Transcoding itself could become an issue in decentralized ecosystems because there is no guarantee of the reliability of each transcoder. However, by incentivizing good behavior, many transcoders who have skin in the game will comply or risk having their rewards slashed. Or, in the case of Livepeer, they risk having their stake slashed.
Livepeer’s proof-of-stake transcoding mechanism is similar to proof-of-work, requiring you to stake a sufficient amount of Livepeer Tokens as collateral. By having the tokens locked, each transcoder has tokens that they will lose if they do not behave appropriately, making it very expensive to attack the entire ecosystem.
Creating a trustless ecosystem requires incentivizing the most important players to perform appropriately. If there are no punishments for bad behavior, the entire ecosystem becomes unreliable with malware and bad user behavior.
Content creation is not cheap, and creators need to earn revenue for posting their content on a platform. Income streams are different per platform; some use the subscription model, and others use the pay-per-view or ads-based models. Although not all business models are created equal, some income streams are better than others, given the conditions.
For example, if you want the platform to be free-to-use, YouTube’s ads-based model might be the best approach. A good example would be Chainflix.
Chainflix is a decentralized video streaming infrastructure that can act as the all-in-one package for ads-based streaming. Video streaming content is not cheap, requiring a lot of effort to produce. Chainflix focuses on creating incentives for users to create good content while also giving watchers a free-to-use content platform. Its business model is similar to YouTube because they rely completely on ads to make revenue for the creators.
The difference is that Chainflix uses a decentralized architecture to relinquish control over the content published on its platform and utilizes a proof-of-view (PoV) blockchain to monetize its ads. The PoV mechanism’s benefit is that it safeguards the system from being gamified by bots who seek to profit by viewing the videos. While PoV sounds like a revolutionary concept, there has been growing competition with other projects. At the time of writing, Verasity is leading the space.
To control the flow of content, Chainflix uses controllers to connect the client-side with the decentralized backend storage using APIs. Chainflix also uses artificial intelligence to increase storage efficiency and create a smarter decentralized storage scheme. The Chainflix ecosystem centers on efficiency rather than true decentralization, utilizing the blockchain to monetize and store content, unlike LBRY, which uses the pay-per-view model.
LBRY has its own token called the LBRY Token (LBC). LBRY has two income streams, proof-of-work mining within their network and a pay-per-view model. The main income stream for content creators would be the pay-per-view model. You can lock your content and set a minimum price for consumers to view it. But, LBRY is not limited to pay-per-view. Consumers can also tip you using LBC. You don’t need a third-party Patreon account to have tipping enabled.
Mining transactions can also be profitable. The LBC mining period is over 20-years, and block rewards will increase for every 100 mined blocks, peaking at 500 blocks and slowly declining after. However, mining rewards are not limited to block generation, as miners will also receive LBC from the transaction verification fee. To incentivize miners to validate each transaction, LBRY has a pay-per-publish model. It also disincentivizes creators from spamming the blockchain with low-quality content. The only downside to this model is that you need capital to publish on LBRY, although the fee is small.
Ads-based and pay-per-view or subscription models are the standards across the industry. However, a third option that is still relatively new is content rewards.
Steemit is an incentivized public content platform building on the Steem blockchain. Users on platforms that build on Steem will receive rewards for every piece of content they post. The better the content, the more rewards they will receive. Steem measures quality content by its popularity, mainly using upvotes and downvotes to determine the rewards.
It is a fairly new concept, with the main downside being that Steem tokens can essentially be created out of thin air. The video streaming platform DTube uses Steemit, but it is not clear whether it is still profitable. Creating an economy based on content posted and the reputation of the content doesn’t bode well because there are no incentives for people to make quality content over quantity. The parameters behind defining quality content on Steemit can easily be skewered using bots. A study even shows that 16% of Steemit cryptocurrency transactions are bots.
Creating the right incentives for content creators can be difficult depending on what kind of model your project is pursuing. Each has its downsides and can breed different types of communities.
Free sites usually will go with an ads-based system, while a paid site will inevitably rely on the quality of the content to earn views. The new method of creating content to get rewards, or content mining as I like to call it, is a novel method, but how it will withstand the test of time is still up for debate.
Out of all the blockchain video streaming projects, the infrastructure mostly remains the same. Each blockchain video streaming infrastructure will usually consist of a smart contract, file storage, a content transcoder, and finally, an API layer.
While the common infrastructure commonly utilizes these four components, projects like Theta also have an extra blockchain runtime to properly scale their underlying infrastructure. But, how do all of these interact with each other?
Typically, a user looking to stream a video will first access the content through the platform’s application interface and the API layer. Then, when the user finds the content they are looking for, they will purchase access to it using a smart contract and pay using cryptocurrencies.
The platform can then use one of two approaches for authentication: either an expirable NFT, or they can serve the content immediately without any more authentication.
Users then retrieve the content through the API layer, connecting to the content transcoder and accessing the raw data inside the file storage. The content transcoder functions as the content gateway, decrypting content as the user needs it.
While this all sounds simple and might make a lot of sense for many people, creating a decentralized transcoder connected to decentralized storage is still a huge challenge for most. How can content creators trust that the transcoders are fair? Decentralized content transcoders are not run by corporations who have incentives to safeguard videos. They can be run by normal people like you and me.
Livepeer tries to solve this problem by creating a PoS-based transcoding ecosystem where anyone who hosts a transcoding server will have to stake a sufficient amount of tokens to be allowed into the network. If a malicious transcoder violates the ecosystem, their stake will be slashed, and the staking rewards will be nonexistent.
The next problem is the API layer. Although it is one of the simpler components of the project, the API layer still needs to be centralized. Reliability is a factor that most projects need to consider, and if the API layer is decentralized, you’ll run into the problem of where you’ll store all of the data.
Of course, you can say you can query the smart contract. But, what if the smart contract is on a platform like Ethereum with high gas fees?
You might consider creating a new blockchain runtime. Although this is possible, you end up adding an extra layer behind your API layer, adding more complexity to the project itself. Querying NoSQL or relational databases is quicker than querying blockchains, and you can even create complicated queries in databases, while it is difficult or nearly impossible to do so effectively in a blockchain.
Even after all this fuss, we still haven’t touched the issue of decentralized file storage. You need high reliability for video streaming, but how can you be so sure your decentralized file system is up to the task? What if it frequently fails on you?
You will need to add an extra layer to the videos you serve. You can either use a CDN or even external storage. But, having videos on external storage outside of a decentralized file system kind of defeats the purpose. Even Theta uses cloud providers as an essential building block for their video streaming ecosystem.
Sure, peer-to-peer storage is a viable alternative, but peer-to-peer can never beat the consistently reliable cloud storage available to developers in the modern world. It is an interesting predicament.
Conceptually, truly decentralized video streaming platforms might be one of the hardest feats to achieve engineering-wise. Without the reliability of some cloud services like cloud storage, centralized APIs, and databases, it is hard to provide a viable streaming platform that can compete with giants like YouTube and Netflix.
The blockchain is revolutionizing the video streaming industry with cutting-edge technology and solutions. In this article, we explored several decentralized video streaming infrastructure projects, including Theta, Livepeer, LBRY, and Chainflix. Additionally, we explored other related blockchain projects for storage like IPFS, Arweave, Filecoin, and a social blockchain project Steem that incentivizes content creation.
Finally, we broke down how common blockchain-based video streaming infrastructure works conceptually and the issues that arise from making a truly decentralized streaming platform.
Cryptocurrency opens a wide range of new incentive models to maintain order within the chaos of decentralization. The most interesting thing about the blockchain video streaming space is the number of projects experimenting with different models trying to find the most profitable and sustainable model. But only time will tell which projects survive to last.
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