Today is a special day for me. I’m thrilled to share my first angel investment in 3Box Labs the developers of Ceramic Network.
Since I entered crypto I’ve always wanted to be an angel investor and I’m excited to continue investing in founders building the future of Web3.
Composable Data
Data is monopolistic, that is to say, it tends to converge to a single location. This is because data has gravity.
“As data accumulates (builds mass) there is a greater likelihood that additional services and applications will be attracted to this data.” - Dave McCrory”
The winner-take-most reality of social networks compounds the principle of data gravity leading to natural data monopolies. Google. Meta. Apple. Amazon. Twitter. The more data companies collect, the more services and applications that become feasible. More data improves analytical capabilities thus yieldings better insights. These closed data flywheels spin creating marginally better products and applications.
In order to increase their competitive moats, all of these data monopolies keep their data siloed within in their walled kingdoms. These data siloes selectively release information (via APIs) to the public only to reseal the siloes or demand payment for access once a third-party developer or startup finds something valuable amidst the company’s treasure trove of 1s and 0s. The inability for developers or startups to innovate or compete with these tech giants has become a fatal flaw amidst our society’s technical prowess.
The underlying problem with Web2 – if it was possible to narrow it down to one – is that data is not composable. Information doesn’t flow freely and corporate gatekeeping prevents developers and entrepreneurs from accessing that data to build better applications and platforms. Composable data – data that is open, portable, and accessible – facilitates the innovation flywheel.
Ceramic Network: A Composable Data Layer
Ceramic is an open, permissionless data layer that enables composable data. With Ceramic, data becomes public, portable, and easily accessible.
When we examine how applications are built today, the power of composability becomes clear. Data isn’t composable – and companies do not have an incentive to share data – so Medium and Substack both rebuilt a similar platform. Both companies maintain servers for writers to manage their contact/email list and store the same user metadata (i.e. interests, preferences, follower lists, etc). They create similar – yet slightly different – editors based on markdown. This list of replicated infrastructure goes on. The lack of composability creates a warped developer experience that requires two platforms (competing on different models) to build much of the same tech stack.
Users (readers + writers) receive a less convenient experience where they have to redo every task on each platform (e.g. this piece is hosted on Revue & Substack).
The importance of convenience for users is akin to composability for developers. When developers have access to composable software, they don’t have to rebuild everything from scratch, enabling them to focus on single services, interfaces, or applications which results in better experiences.
The crypto ecosystem has already experienced the power of composable financial data. Zapper acts as an interface layer for an individual’s financial identity – combined wallets and positions – across various protocols (i.e., Maker, Aave) on a variety of Layer-1 blockchains (i.e., Ethereum, Polygon, Avalanche). However, there are a host of applications and platforms that aren’t built around financial data and therefore require a composable layer for user-centric data. A user-data-centric protocol like Ceramic becomes a foundational component for applications built around social networks, identity, reputation systems, and more.
How it Works: Ceramic Network
The 3Box Labs team has been building decentralized standards and applications for years culminating into the Ceramic network. As a result, Ceramic leverages other key pieces of decentralized infrastructure:
Query Layer – advanced indexes on top of Ceramic to improve the query/information extraction experience.
Ceramic – open data layer comprised of nodes and mutable data structures – and Streams (e.g. documents) – that are accessible via public APIs
IFPS – Ceramic specifically uses IPLD for creating data structures for Ceramic Streams and relies on lip2p for discovering data & communication across nodes.
Storage Layer – Ceramic focuses on mutable data whereas networks like Filecoin and Arweave focus on immutable data. These layers can be utilized as backups for data on Ceramic.
Layer-1 Blockchains – Ceramic anchors – timestamps – commits to its network on Layer-1s (currently Ethereum) which helps resolve conflicts in the consensus of the current state.
Importantly, Ceramic focuses on dynamic documents versus static documents. Ceramic builds on top of existing decentralized file systems to transform static data into mutable – updateable – data.
Ceramic nodes maintain the state of all documents that they choose to update. Since documents (e.g. data) on Ceramic is designed to be changeable a core question becomes how can you trust when a document (and its data) is altered. Ceramic nodes track the alteration (changes in state) so that once a document is updated and signed, the state update is shared over libp2p and the data within the document syncs over IPFS.
The Ceramic Network
Finally, as stated earlier every update is also anchored onto a one or more blockchain networks. It’s important to note that Ceramic nodes will select which blockchains to anchor and so some nodes may only anchor to Ethereum while other nodes choose to anchor to multiple chains (i.e. Ethereum, Solana, Bitcoin). And while most developers will rely on nodes or anchoring services to make commits, anyone is able to submit a transaction of the updated network state. This is a bit of an oversimplification of Ceramic, but is helpful for understanding the basics of Ceramic.
In essence, Ceramic enables developers to store user and application data on an open network of data-hosted nodes controlled by users rather than siloed application servers.
User-Centric Data
Another powerful tenant of Ceramic is that data is user-centric – it stems from a singular decentralized identity (DID).
3Box Labs has already developed a variety of useful standards and data structures on top of Ceramic network. IDX is an identity standard – analogous to the ERC20 standard on Ethereum – that allows developers to associate any type of data to a user (e.g., DID).
To understand the importance of IDX, let’s examine how mapping data to a user works in Web2. Most companies store user data in their own proprietary, siloed user tables – database with a person’s identifier (e.g. username) and the subsequent metadata about that user. This information, which is often the same for a given user, is replicated across a number of databases and applications.
Effectively, Twitter, Instagram, and Google all end up storing a version of the same information –
{ user profile: [first name: "Mason", last name: "Nystrom"],
Social account: [Twitter: "account", Instagram: "account"],
Avatar Image: [image 1: "punk", image 2: "BAYC", image 99: ".." ],
Interests: [Web3, long walks on the beach, Dwayne Johnson movies, writing], etc.. }.
IDX takes a user-centric approach, replacing this user table with an index of information – linked to one decentralized identity – that stores all the subcomponents (metadata) of an individual that can be used across different applications.
Source: 3Box Labs
Ceramic will enable users to connect and use a single DID for all Ceramic applications and across multiple blockchains. The core benefit of user-centric data is twofold. First, users will control their own information they create online, but this is extracted away from the individual. Users don’t want to control their own identity, they want it to be controlled natively in a protocol (convenience at its finest). Second, applications can share composable data via open standards and data models which further compounds innovation. This open data layer of user-centric data can support a variety of new types of applications and there are already dozens of applications and tools building on top of Ceramic.
Final Thoughts
Data’s monopolistic tendencies don’t have to work against users or developers. Ceramic takes advantage of data’s gravitational pull by creating a permissionless data layer with composable data and open-source data structures. An open data layer can become the gravitational well that breaks down data siloes and untethers the data flywheel to facilitate greater innovation.
I’m incredibly excited to invest in 3Box Labs and support Ceramic. If you’re interested in building this future, the 3Box Labs team is hiring.