Metcalfe, Creator of Ethernet: Web3 Will Have All Kinds of “Network Effects”


“For the first time, I’m trying to say exactly what kinds of value are created by networks,” Ethernet inventor Bob Metcalfe told a small group at a side-event at The Knowledge Graph conference. . He predicts that decentralized knowledge graphs, which combine knowledge graph databases with connectivity, will create new forms of value.

Arnold Safanova

When Bob Metcalfe was selling Ethernet to the world as a new networking technology in the 1980s at 3Com Corp., he had a clever sales pitch: you’ll get more value out of the product. the more you buy.

What was a cheeky argument concealed a deeper element of truth: networks are more valuable the more things they connect.

Later, Metcalfe refined what he was talking about, formulating what has been called “Metcalfe’s Law”. The law says, The value of the network increases as the square of the number of features participating in the network, where the entities could be computers, but also humans, as in the case of Facebook. The value is squared because it is the number of connections that can be formed.

Things that get better this way, Metcalfe said, have what he dubbed “network effects,” a kind of centripetal force where more and more participants induce even more participation, in a virtuous circle. . Facebook shows that: The more people who join, the more others are likely to join.

Metcalfe is still refining his case for his law and learning along the way. “There are going to be all kinds of network effects in Web3,” Metcalfe said, during an informal meeting in Williamsburg, Brooklyn, on the sidelines of The Knowledge Graph conferencea conference where knowledge graph enthusiasts share technologies, techniques and best practices.

“For the first time, I’m trying to say exactly what kinds of value are created by networks,” Metcalfe said. ZDNet at the Williamsburg event. “What I learned today is that knowledge graphs can go so much further if they’re decentralized,” Metcalfe said. “The key is connectivity.”

Earlier in the day, Metcalfe had given a talk on the main stage of the KGC, “Network effects in Web3. During the conference, Metcalfe explained that “networks are valuable,” in many ways. They provide value as “data collection,” Metcalfe said, the ability to get data from many attendees There was also the sharing of value, the sharing of disc players, Netflix, Metcalfe said, has “distribution value – they distribute content and it’s valuable.”

There will be new forms of value creation, Metcalfe believes, based on startups that combine knowledge graphs with connectivity. The event in Williamsburg was organized by one such startup, OriginTrail, which was founded in 2013, is officially headquartered in Ljubljana, Slovenia, and has offices in Gibraltar and the United States. Metcalfe is an OriginTrail Advisor.


Metcalfe, left, at the KGC conference on Tuesday with OriginTrail general manager Juri Skornik, center, and CTO Branimir Rakic.

Arnold Safanova

OriginTrail creates what it calls the first “decentralized” knowledge graph, a knowledge graph whose nodes can be networked.

The basic idea is that while blockchain “Layer 1” technologies authenticate items, OriginTrail’s Distributed Knowledge Graph “Layer 2” technology allows you to query and interact with items that have been authenticated. Anything unique has a “Universal Asset Locator”, or UAL, an analog to web URLs. UALs are believed to conform to the W3C specification for “decentralized identifiers.” The form looks like an HTTP address, preceded by the identification tag “dkg://”, to distributed knowledge graphfollowed by the address of the particular item.

Transactions can occur when people “publish” things to the internet with a unique UAL – via a simple “create” statement – which is then recorded by the decentralized knowledge graph of nodes, currently a few thousand.

Everything published is a single asset, a digital twin, which can represent real-world objects, such as sneakers or whiskey. It can be sold to another party, which “takes control of the state of that chart”, as Rakic ​​explains, by giving the person the NFT that has the UAL.

The nodes each have graph databases that have pieces of the collective graph, and they each operate in a permissionless, peer-to-peer fashion that is analogous to how blockchains operate. Similar to blockchains, those who run nodes to verify published things are rewarded by the people who publish things.

OriginTrail’s Knowledge Graph is built on several Layer 1 blockchains, but the company will soon introduce its own blockchain, operating based on the Polkadot blockchain.

As co-founder and CTO Branimir Rakic explained during a technical presentation on Wednesday, “blockchains are not good databases”. Blockchains can be queried, but only in a limited way, Rakic ​​said.

What is needed, Rakic ​​argues, is a “semantic network” on top of blockchains. This is what the company offers with its distributed knowledge graph.

By combining Tim Berners-Lee’s notion of “The Semantic Web” with Web3, Rakic ​​said, you will get “The Semantic Web3”.

“I like where it’s going,” Metcalfe said of OriginTrail’s approach. “All this stuff — DeFi, DOA, crypto — all the decentralized Web3 stuff, it’s all going in this direction of value sharing,” Metcalfe said.

Metcalfe told the group at the Williamsburg party that decentralized knowledge graphs would make possible a kind of eternal spring for artificial intelligence.

“AI was invented around 1968 when I was a graduate student,” he said. “And for years, AI was going up, and then it was going down, and it was going down because the AI ​​was running out of data,” Metcalfe explained, “AI relies on data.”

“Well, it’s not going to go down, it’s going to keep going up, because the decentralized knowledge graphs are going to give the AI ​​more and more data.”

Metcalfe, who for a decade served as a start-up competition judge at SouthbySouthwest, was invited by ZDNet how he rates OriginTrail’s chances of success as a business. “The weakness of this one is that it’s too complicated to explain” to ordinary mortals, Metcalfe said of the technology. OriginTrail technology comes across as a bit of middleware, which is a category that only tends to be of interest to a handful of people. “Yeah, and I’m one of them,” Metcalfe said.

Despite the complexity of the technology, “what they are doing is in line with where things are going.” More importantly, he has taken on the role of advisor because he learns from what the company is doing, learns about the new forms of value that will be there.

The Knowledge Graph conference is in its fourth year, having started life as a small affair in a ballroom at Columbia University in 2019. This year, after two years of virtual-only proceedings, the conference has moved on. transformed into a sprawling hybrid event, with dozens of panels as well as live sessions at the Cornell Tech campus on Roosevelt Island in New York. The program runs until May 6.

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