Web3 CMO Stories

The Battle for Decentralization: Safeguarding Web3 Integrity with Ashton Hettiarachi, Founder of Openmesh | S4 E39

• Joeri Billast & Ashton Hettiarachi • Season 4

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What if the core principles of Web3 are being compromised by the very infrastructure meant to support it?

Join us as we tackle this critical issue with Ashton Hettiarachi, the visionary founder of Openmesh. Ashton draws fascinating parallels between historical power structures and the current dominance of tech giants like AWS, revealing how centralization poses a serious threat to the integrity and accountability of the Web3 network. With AWS hosting a whopping 75% of Ethereum nodes, we are standing at a crossroads where the ideals of decentralization hang in the balance.

Listen in as we navigate the complexities of incentivizing independent node operators and making decentralized infrastructure a reality. Ashton takes us through the economic challenges of running nodes and the centralization roadblocks in node operation services.

Hear about the exciting journey of Openmesh, from its inception in 2020 to its innovative solutions today, including how it aims to democratize node operation with a decentralized, immutable cloud model. Discover how leveraging unused compute resources and bandwidth from independent providers can revolutionize Web3 infrastructure.

Don't forget to share this episode, follow our show, and leave your reviews to help us reach more listeners passionate about preserving the ethos of Web3.

This episode was recorded through a Podcastle call on September 3, 2024. Read the blog article and show notes here: https://webdrie.net/the-battle-for-decentralization-safeguarding-web3-integrity-with-ashton-hettiarachi-founder-of-openmesh/

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Ashton:

In June 2018, we raised like $40 million, which was a bad idea, and then the entire market crashed by 2018. We raised $40 million at around $500 to $600 Ethereum price and the liquidity that we collected. It all crashed by December $150. It was a really stressful time.

Joeri:

Hello everyone and welcome to the Web3 CMO Stories podcast. My name is Joeri Billast and I'm your podcast host, and today I'm joined by Ashton Hettiarachi. So, guys, if you don't know Ashton, he's the founder and the product architect at OpenMesh, and OpenMesh is building a decentralized data and computing infrastructure for the world, eliminating middlemen by utilizing a global network of barometer service and public cloud services. Ashton, when we were discussing the podcast, when we were preparing, you pointed out that three or four large companies control the majority of the data, of AI capabilities and infrastructure today. How did this centralization happen and why did so dangerous?

Ashton:

I think any centralized, any entity or individual, small group of people, if they're gaining a significant power. We've seen this many hundreds of thousands of years like pharaohs and kings and dictators gain lots of power, whether it's a knowledge or whether it's a military power. It is inevitable. There are corruption, there are censorship, there are a lot of corruption-related things that can happen. I think centralizationization by default. It comes with a lot of challenges.

Joeri:

Yeah, and certainly because now we live in the Web3 world, we are on the Web3 CMO Stories podcast. In Web3, over 80% of the infrastructure is controlled by centralized cloud providers. How does this reality conflict with the core principles of decentralization? Yeah, that's what we were supposed to do.

Ashton:

I think originally it meant to be decentralized, right? So what happened when it became like a thing where VCs start investing in funds and venture capital? Early days in, let's say, let's call it Semicon Valley, they wanted to have a proprietary technology. So the idea of building a vertically integrated monopoly. That was the motto, right? So once you have your product market fit, build a technology, keep it proprietary and just go crazy. So that motto allowed corporations to basically go from zero to 100 very quickly. That also gave them unprecedented resources, but also freedom to go from zero to 100. And that is what happened. So the industry the regulators or industry or even users, couldn't keep up with it. So a small group of companies like Google, facebook and, of course, microsoft and AWS services. They started gaining so much momentum.

Ashton:

And that is a big challenge that we saw in centralized world. Because if you look at in cloud space or ID infrastructure space, the 95% of all the infrastructure is controlled by four companies. We're supposed to trust and we rely on these four to three, three to four companies. And if you look at early days of Web3, we're talking about I got into Web3 like 2015,. I got into Web3 like 2015,. But if you go way back, like 2012, 2013, 2014,. The original idea is basically push back decentralization. Now, if you look at our Web3 space for the last maybe three to four years, we are seeing the same kind of a pattern. Because if you look at in Web3 space, critical infrastructure like databases, front-end RPC, and then if you were to run specific services because of convenient, you go to AWS or public cloud. So the challenge with that is, yes, it's convenient, but where's the decentralization, right?

Ashton:

So if you have, I think last December in Ethereum ecosystem, if you look at Ethereum ecosystem, it's one of the largest ecosystem, right? So if you combine everything together, you have a DeFi, you've got FTEs, you have GameFi, you have a lot of services built on top, and then you have a lot of users. You have developers, founders, daos, and then you've got financial products like ETFs built on top, and then you've got traders and speculators and advocates, and there's so many large ecosystem, so trillions of dollars worth of value and millions of users are basically rely on integrity and at least the decentralization aspect, right, the ethos of decentralization. But if the entire network, let's say the network's integrity networks, the actual accountability is controlled by the node operators, because in the past, node operators are proof of work, but now it's a proof of stake. Proof of stake is very easy, right? So if you were to run a TDM node, so you can have a delegated proof of work, but now it's a proof of stake. Proof of stake is very easy, right? So if you were to run Ethereum Node, so you can have a delegated proof of stake and validator support and then you can go into a very easy cloud environment and to spin up a Ethereum Node and with that, the challenge now anyone can run Ethereum Node quickly.

Ashton:

So what happens? Because of convenience, people start going to centralized cloud providers, specifically AWS. So what we are seeing for the last two years specifically the shift between used to be where all these nodes are distributed between public cloud and some privately owned data centers and also people run in their home used to be the case. But if you look at the evolution, or at least for the last maybe one and a half years to two years, it's mostly concentrated around AWS. So, based on our research, last year December, it basically AWS surpassed 75% threshold. So it's sad to see 75% of the nodes are on public calls, like GCP and AWS. So now you have to ask a question. So we're relying on the accountability and integrity of the network. So trillions of dollars worth of ecosystems have developed. You have millions of users are relying on this the critical aspects but then all the nodes are running on AWS. So that's why I wrote an article a couple of days ago. I mentioned it's not web three, it's AWS three.

Joeri:

Yeah, exactly, we can share this article, by the way, in the show notes with the podcast. You mentioned integrity a few times. Also, security is important, and how can we be comfortable that everything is secure if it's centralized?

Ashton:

I think security. Ethereum has a good security, like the consensus algorithms, and then the actual protocol itself is quite secure, even though you're running in centralized cloud providers. You have that sort of security. But you've got to understand. Take an example let's say you provide a decentralized service. So let's say you're providing a front end for you to access some sort of on-chain environment. So let's call it Uniswap. Right? So Uniswap has a front end to interact with a smart contract. Imagine I host that front end on AWS and if regulator want to shut it down, they reached out to AWS because in order for you to host a website on AWS, you have to sign up with AWS, you have to do KYC with AWS and you have to set up a credit card on AWS and it's basically tied to organization, entity or individual. So if regulators want to shut that down, they can reach out. Technically, right, they can reach out to AWS compliance team and say, hey, shut this down. Reality is it may not happen, but there's a choke point. It's against the decentralization and our Web3 philosophy.

Joeri:

So we need a lot of challenges that we are seeing that you have been mentioning. So what inspired you to create OpenMesh and how does it solve the problem of centralization in Web3?

Ashton:

I evolved into this project so to give you a bit of a background, so I got into Web3 back in 2015. I used to run Bitcoin and Ethereum meetups here in Sydney, 2015. 2015. I used to run Bitcoin and Ethereum meetups here in Sydney, 2015. And then, right after that, I started a kind of research firm called Blockchain Partners. It was a research firm slash hedge fund. What we did before we started creating like ICO evaluation reports. So we used to basically call out scams and we produced reports about these projects.

Ashton:

So I like to read technical papers to understand, but most of the technical details just go way, way behind my head. But I like the idea of how people present a solution. And then I like the idea of when people have deeper knowledge on a problem and when they articulate that problem in a way that makes sense. I love that. For me, it's really a way to actually learn, because imagine someone putting a even if it's a bullshit idea, but when they articulate this creative way to represent something, it allows you to actually expand your mind, keep your mind more open. I'm a futurist and I love technology. So seeing these kind of abstract concepts because some white papers are ridiculous, right, but reading those white papers and reading their justification why they build what they build. It was really fascinating for me. So I was doing that and started collecting a lot of data early days. So we built a tone analyzer back in the days when there was a direct correlation between what people talk on social media, specifically like Telegram and Twitter has a direct impact to liquidity on exchanges. So we were looking at, we were building tone analyzers to understand. So there were regional correlation between 2017, 2016,. Korea and China used to drive a lot of liquidity across exchanges centralized exchanges and then, while I was working for Blockchain Partners Holdings it's Australian-based research firm and through mutual contacts, I moved to Sydney and to the CBD and then I met some early people of Phantom. So Phantom a project that I also came across as an interesting project because it's the original vision it was Ethereum Killer. It's a DAG-based smart contract platform obviously just a white paper and then people who I worked with at that time they liked the project, they supported the project, so I joined Phantom late 2017 and beginning of 2018.

Ashton:

I joined as an advisor while I was running my research firm, blockchain Partners Holdings, and then in June 2018, we raised like $40 million, which was a bad idea. And then the entire market crashed by 2018. We raised $40 million at around $500 to $600 Ethereum price and the bad treasure management price crash, ethereum, the liquidity that we collected, it all crashed by December $150. It was a really stressful time, but at the same time, that also like that was the first time like I was experiencing like building a factory project how to deal with tokenomics, how to deal with the technology, how to hire people, how to get things done. It was a very stressful time, yeah, and then and during that period, I was so fortunate to basically meet people like Michael Kahn, andre Kornage so these guys are pioneers in building tech, but also have the mindset of get things done.

Ashton:

And then you know, so I worked with Phantom for a while. I was helping them with product and also to work with government related. So I was actually I was hoping at that time smart city or maybe offering a consensus as a service to a government might be a great way to showcase the real value of a blockchain. So I was like pushing that agenda and I remember Andre Andre was saying no, ashton, you're wrong. It should be something like on-chain. You have to build something native for the chain so you could actually bring value to the chain rather than saying hey, instead of building a government blockchain or a government blockchain as a service. And he was right about it, because right after that, the DeFi summer came, so, yeah, so after I left Phantom that was 2019, I started doing pro bono work for the government.

Ashton:

So while I was working for Phantom, I got in touch with Dubai government and Australian government, austrade and Smart Dubai. So Smart Dubai, they were looking for someone advisor to basically lead a project called Dubai Foresight Initiative 2020. So they hired me by Dubai Future Foundation to basically just run this project. And that was like a very interesting time because hearing from government perspectives, people working in the public sector seeing these technologies, because they always say we need a blockchain, but then when you sit down and try to break things down, you don't need a blockchain because blockchain can be just a distributed database. So why you need that kind of a blockchain? So I led that project government project for a few months.

Ashton:

I learned a lot with that project because I had to deal with regulators, I had to deal with people from various departments. Stakeholder management is a really difficult thing, right? So at the end, what was the outcome of that? We had to kind of a showcase where blockchain can apply, whether it's a tourism industry, whether it's a tokenization of, let's say, real estate, or applying blockchain into trade, finance or supply logistics, banking industry. So the most interesting one I think I liked, we managed to work with the DIFC, which is a Dubai Financial Center, an international financial center, and a Abu Dhabi-based regulator called ADGM to try to build sort of like a legal wrap for smart contracts and DAOs. So that's really interesting because how you build a legalized framework to host a DAO. So this is 2020.

Ashton:

After 2020, after I completed that project and I was looking for where are the bigger challenges? Web3 space right For me, Web3 space, if you want to accelerate Web3 space, I want to find a really fundamental problem to solve. And what I found, by not only speaking to people but also really kind of applying first principle thinking. One thing quite obvious to me because if you think about any distributor network, in order that distributor network to be distributed and decentralized, you need to have independent verifiers verifying your network. But the problem is, if you're the node operator's economic viability, if that is not sustainable, why anyone would support the network, right? So what I mean by so?

Ashton:

Let's say I'm Ethereum network and as Ethereum network, I want as many nodes possible in the network. I want independent node operators actually. And then as a network, I'm going to provide incentives in Ethereum. However, for node operator node operator, they have to pay for their let's say, buy hardware. If it's approval work, if approval is staked, they have to run their servers on AWS or their own computer or any virtual machines. And then so let's say they're hosting their node in AWS let's say $200 a month. So you calculate $200 a month, some 12, you look at that cost and then on top of that, any additional costs that you have to spend. So let's say that your overall costs about $2,500 per full for the year.

Ashton:

Now the question if you cannot even cover that $2,500 by basically Ethereum price, by selling it in a 12-month period, if it's not viable economically, why anyone would run a node in the first place, and what we've seen in our space, then there's two things. So either the the chain itself has to issue more tokens to incentivize. So there's a huge problem. So I was looking at okay, how do we address that problem? Because if you can bring the cost down as a node operation, because the problem, when you look at a node operation as a service, that was a huge industry but it's really centralized Back in the days and still it's centralized, like the top five node operators and RPC providers. The top five are private and privately owned. So to me, addressing that problem is one of a key element. So that's what we started working on. But, yeah, so that's the backstory.

Ashton:

But again, so to me, I wanted to do two things. I wanted to accelerate Web3. But again to me, I wanted to do two things. I wanted to accelerate Web3. In order to accelerate Web3, I thought, okay, so how would you improve the productivity or efficiency of a city? You need better transportation, you need hospitals, you need roads, you need to have an irrigation system. So the same way, if you treat our industry, we need to have a better infrastructure. So when I look at the node as a service, or our infrastructure, the core infrastructure underlying infrastructure, it's dial up.

Ashton:

So I thought, what if you bring fiber connectivity to Web3? So what will happen if you do that? Everyone called it deep in today, but back in the days I wasn't even know. I knew Vitalik was talking about it, but early days it was like okay, so we have 30 to 40 years of established data centers are running Web2 world efficiently and these are CPU, gpu and compute and bandwidth. They're helping Web2 world and it's working really smoothly. They're helping Web 2.0 world and it's working really smoothly.

Ashton:

But if you look at the Web 3.0 world, these data centers fiber connectivity, huge bandwidth, huge compute are not connected. So to me, if we bring this, I call these commodities right. These are digital commodities. In my opinion compute, storage, gpu, bandwidth and including data itself. If you consider, these commodities are more valuable than gold, oil and diamonds, in my opinion, right. So I could be wrong, but it makes sense. So, bringing those resources into our world, into Web3 world, and then able to accelerate our industry and able to provide cheap compute, cheap GPU, cheap bandwidth into our industry, to bring that in a way that not just like another cloud provider, if you bring immutable cloud where you have a full mesh kind of network topology, you have a consensus running on the network and it's like a Bitcoin kind of a network but you can run workloads on top, right, so it's a decentralized network, but then you can do workload management, you can run certain applications, you can do peer-to-peer compute and et cetera. So that has evolved into a lot more 2024.

Ashton:

Openmesh is much, much different and mature compared to 2020, early 2020.

Ashton:

But early 2020 for me was like okay.

Ashton:

So what was the fundamental problem?

Ashton:

And it was addressing the node operator viability, because node operators journey to me is really painful and it's not sexy and for me, I was trying to run nodes myself, supporting a couple of blockchains, just to see how I can run a node and get some tokens. Rather than buying tokens, it would be nice to run a node and try to support the network and return I could get some tokens. It was really, I thought, an obvious thing to experiment, but the journey wasn't easy and also I'm not a developer, so it's quite difficult to set things up and that's why OpenMesh, we try to actually bring that user experience. Today, if you want to run Ethereum Node, instead of taking half an hour to set things up, you can pick an Ethereum template on our Xnode Studio, on our XNode studio, and then within three clicks, you can go from picking the template and finding the provider and then go to just running a node in three clicks. So the time would be about less than two minutes. But yeah, so I know it's a bit of a brain dump, but yeah.

Joeri:

No, great to hear that. And you say that you are not a developer. But I see you have a lot of technical knowledge, maybe because of all the white papers you read and everything that you're doing to get educated. But what I always like to ask is what are you now the most excited about? Maybe for OpenMesh or for the Web3 world in general for the months or the period?

Ashton:

I think I'm very excited if we in Web3 space a lot of projects are experiments. I consider even Ethereum is an experiment. So I like the idea of Open Mesh Cloud. It's an idea where you could pull unused compute resources, bandwidth and GPU from independent provider like myself, I could rent my laptop if I don't use my bandwidth or if I don't use my hardware, so specifically, ram and storage. And also we connected to large data centers like Equinix and High Velocity and Volta, so you have a variety of options. The idea I'm very excited about, like the bringing like A, b and B for infrastructure concept, is really cool because today, if you're a Web2 or Web3 founder or a startup or a protocol or a DAO, you only have choices. When it comes to Web2 infrastructure or Web3 infrastructure, it's few providers, but if you allow anyone to participate in that network, it's really interesting, right? There are a lot of challenges, I should admit, but the idea of having A B and B for infrastructure is open up a lot of innovation. So OpenMesh Cloud I think the biggest value proposition for OpenMesh Cloud for me, specifically because I really love freedom, right. So I don't like, if I host a webpage, I don't want regulators to basically shut it off, or AWS basically shutting my website, because, for whatever reasons Like today with my digital assets I control my digital assets, right.

Ashton:

So I have my NanoLedger or MetaMask and I control my assets. The problem if I'm running a digital infrastructure whether it's hosting a website, having a database or anything in between I have to rely on a third party. But imagine I have a virtual machine, but virtual machine is attached to a, let's say, a nano ledger or my metamask, and I'm the only one can have access to it and I'm the only one can open that. I'm the only one can access to the core settings of that. That's very powerful because you could be sitting in Thailand, bali, sydney, wherever and you can have your service up and running.

Ashton:

And then you have your unique IP address, you have your load balancing done and you can offer services, whether hosting an e-commerce website or running, let's say, a decentralized exchange or even running like a node as a service. You can provide that service to the world. But who owns the core infrastructure? Is you, right? It's really powerful in that aspect, because the only person can shut it down is you. So I'm very excited about that. So the idea of immutable cloud is a really cool idea.

Joeri:

Awesome. I think you gave a lot of things to think about for our listeners, Ashton, and I really feel you could talk for hours about this subject. If people want to know more about you, about OpenMesh, everything that you're doing, where would you like to send them?

Ashton:

OpenMesh. network. I'm not quite active with Twitter but I am quite active on Medium and LinkedIn. So my Medium is medium. com and @openashton_ or you can go to OpenMesh. network and Medium is most of my Medium basically reposted on OpenMesh Medium.

Joeri:

Okay, amazing. Like always, there are show notes. There is a blog article which takes all the important things we said here during the podcast episode. Also, your links will be there. Ashton, it was really a pleasure to have you on the show. Thank you so much. Thank you, Guys. What an insightful episode again. If you feel like this is something that other people should know people around you, other people in Web3, people looking at Web3, people in technology, other entrepreneurs be sure to share this episode with them. If you're not yet following the show, this is a really good moment to do this. If you haven't given me a review yet, please do that, because it helps me even reach more people around the world and, of course, I would like to see you back next time. Take care.

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Joeri Billast

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