This will be a rather brief explanation of the inner workings of the Bitcloud protocol. For more technical details, you can take a look at the Bitcloud Protocol White Paper. Please keep in mind that this paper and the more technical paper are both in very early stages of development.
Bitcloud works on a variation of proof of stake known as proof of bandwidth. The nodes in this system are similar to the miners in the Bitcoin protocol in that they mine cloudcoins by providing bandwidth to the network. Instead of using a proof of work system where miners are looking for the solution to a complex mathematical equation, the nodes in Bitcloud are rewarded based on their share of the total amount of bandwidth used in the Bitcloud network. Each block reward is distributed among the nodes based on their share of the overall amount of bandwidth needed by the Bitcloud users.
Nodes will be able to subscribe to moderators who can decide the type of content that will be stored on the node's server. The difference between this and the current system of centralized cloud services is that there will likely be an endless number of moderators who have different types of restrictions when it comes to the type of data that can be stored on their nodes' servers. Perhaps some moderators will specialize in only allowing people to upload news videos, while other moderators will allow people to upload almost anything as long as it is encrypted and not shared with many other people. This is a way for the nodes to remain neutral and follow the laws of their own countries.
In addition to the option to have moderators pick what can be stored on their servers, nodes will also be able to choose to host unmoderated content. There are both advantages and disadvantages to this option. The data will be routed through many different nodes before it gets to the end-user, so cloud storage will be more expensive. On the other hand, the unmoderated network will allow people to host and share content that will not be traced back to the uploader or the node. The data will be sent through a variety of different nodes in a manner similar to Tor.
There are still many key decisions that need to be made in the Bitcloud protocol. We have a basic idea of how everything will work, but we need assistance from programmers and thinkers from around the world who want to help this project. We've tried to come up with specific solutions as a two-man team, but there are simply too many aspects of the protocol for us to tackle alone. Head over to #bitcloud on Freenode IRC or /r/bitcloud on Reddit if you'd like to join us.
If you're unfamiliar with decentralized applications or distributed autonomous corporations, then you may want to look read this simple, nontechnical article by Kyle Torpey. For more in-depth analysis, you can read explanations from the Mastercoin Foundation and Invictus Innovations.
The Bitcloud protocol is a decentralized application that provides the services of cloud storage and bandwidth sharing. Users will interact with this service in a variety of different ways, but the main idea behind the protocol is that people will be able to store data in the cloud in a way that limits censorship, surveillance, and centralization. Moderators and nodes are providing a service to their users, and they need to be paid to cover their costs. Cloudcoins are the currency of the Bitcloud protocol, much like bitcoins are the currency of the Bitcoin protocol. You need bitcoins to use the Bitcoin payment system, and you need cloudcoins to use Bitcloud in certain ways. For example, someone who wants to advertise on a public video that is streamed from a Bitcloud node will have to pay for that advertisement in cloudcoins. Another example would be someone who wants to pay for personal cloud storage on the Bitcloud network. By monetizing the system, nodes can get paid for their willingness to share bandwidth, provide cloud storage, and allow for direct streaming to stored content. Adding the profit motive to the equation gives this project a chance to succeed where many others have failed in the past. Donations can only take you so far when you are trying to create something of this magnitude.
In a way, cloudcoins can be viewed almost as stock in Bitcloud. Investors who purchase cloudcoins in the early stages of development will notice that they get a return on their initial investment once more users begin to use the network. Cloudcoins will become more valuable as more people use the Bitcloud network because the number of cloudcoins needed to pay for certain services on the Bitcloud network will increase as more people are bidding for those services. This setup also encourage growths of the Bitcloud network because early adopters will want to tell everyone about the Bitcloud platform due to the fact that they basically hold stock in the distributed autonomous corporation. A similar incentive exists in Bitcoin.
WeTube was the basis for the creation of the proof of bandwidth idea. WeTube can act as a replacement for YouTube, Netflix, Hulu, Soundcloud, Spotify, and other audio and video streaming systems. The decentralized nature of WeTube will allow users to share content with the world without having to worry about censorship or privacy concerns. In addition to the ability for nodes and moderators to get paid through this DAC, artists can also get paid by opting to get a cut of the advertising revenue that is generated on their content. They can also opt to have their content remain ad-free while it is being hosted by the nodes, but there may be a fee for this service.
Another app that can be built on top of Bitcloud would deal with personal cloud storage. Using an unmoderated form of cloud storage would be possible through relayed, Tor-like connections. This means the user wouldn't know where their files were stored and the nodes wouldn't know who sent them the files. The files would also be encrypted, so the nodes won't know what they are storing either. There could also be moderated forms of cloud storage where different types of files are allowed to be stored at different rates.
In a form of unmoderated web hosting based on the Bitcloud protocol, it would be impossible for a web server to be shut down because it would be distributed to many different anonymous nodes across the world.
There have many different mesh networking projects created over the years, but there hasn't been a huge incentive for new nodes to connect to the various meshnets. A variation of Bitcloud could be used to create a mesh network that pays nodes in the network for routing traffic. This means that users would make extremely small micropayments to nodes throughout the mesh network as their packets get sent to a computer on the other side of the system. With the correct structure, this network could be preferred over the centralized Internet that we have now, which is controlled by the likes of Comcast, AT&T, and other ISPs all over the world. This is nothing more than a theoretical, long-term goal right now because we currently need to work on the basics of Bitcloud. Perhaps this is something that will be seen in Bitcloud 2.0.
There are definitely many other applications for Bitcloud that we haven't thought about yet. If you have any ideas, don't hesitate to contact us.
Website (coming soon): www.bitcloudproject.org
Twitter: @bitcloudproject
Freenode IRC: #bitcloud
Reddit: /r/bitcloud
Javier Sobrino, Original Creator, Programming Inquiries: liberman@riseup.net
Kyle Torpey, Marketing/PR/Nontechnical Inquiries: kyletorpey@riseup.net