TL; DR: VideoCoin, a blockchain-based infrastructure for the decentralized internet, is leveraging unused compute resources to revolutionize cloud-based video services. The video encoding, storage, and content distribution system provides distinct benefits for media producers, ecosystem participants, and resource operators, including a dramatic reduction in costs. With plans to onboard new developers and introduce a channel for crypto mining, VideoCoin is furthering its commitment to defining the next generation of cloud services.
When it comes to cable TV, many Americans are cutting the cord in favor of streaming content services, such as Netflix, Amazon, Hulu, and YouTube, among the other 130-plus competitors on the market.
The number of U.S. households that did not pay for traditional cable TV reached 33 million as of the fourth quarter of 2017 — a figure that is predicted to nearly double by 2022. On the other hand, 55% of U.S. consumers subscribe to paid video streaming services, compared with 49% in 2016 and just 10% in 2009.
But, on the content production side, storing and delivering massive 4K ultra HD media files over a common wifi network is nearly impossible without paying high costs to providers like AWS or Google Cloud. These high costs are hindering innovation on streaming platforms, leaving consumers wanting more and the emerging industry at an inflection point.
The team at LivePlanet Inc., a provider of the first all-in-one system for live streaming, recording, and delivering stereoscopic video content to VR platforms, learned this firsthand before CEO Halsey Minor began working with a team of advisors to implement the VideoCoin Network.
Today, the decentralized video encoding, storage, and content distribution system runs on blockchain to facilitate an entirely new hosting market that even supports the demands of virtual reality.
“Nearly every corporation, large or small, has a datacenter with unused compute resources,” said Devadutta Ghat, CTO at Live Planet and Principal Architect at VideoCoin. “We built a decentralized blockchain solution to tie those resources to the biggest traffic generator on the internet — video.”
The innovative, decentralized solution creates a low-cost alternative to the status quo via an optimized, algorithmically-driven cloud market spanning the globe. With a groundbreaking payment method and plans to open VideoCoin to individual cryptocurrency miners, the company is working to reimagine the massive video services market for the better.
Revolutionizing the Video Industry with Unused Compute Resources
Before he began leading the team of engineers at VideoCoin in 2017, Devadutta worked for Intel for nearly eight years. There, he built the Intel Transcode Service, used to deliver video transcoding services in a simple, fast, and efficient way. He also served as a Senior Product Manager at Cloudera, where he focused on distribution systems and data storage.
In 2016, Devadutta met Halsey and joined LivePlanet, where the two began building VideoCoin. It was soon apparent that the product had serious market potential. “Every single company that does video has the same problem with the high cost of streaming,” he said. “Large studios with lots of video content have a two-sided problem where it’s really expensive to host video content, but also very difficult to monetize it.”
The teams knew VideoCoin could provide an affordable hosting alternative for businesses as large as Netflix and as small as an entrepreneur who doesn’t want to be reliant on a YouTube-like platform.
Along the way, the company has represented its milestones in the form of various mountain climbs, including Mount Fuji, Kilimanjaro, K2, and Everest. The project was kicked off at sea level with a testnet in November 2018 and an alpha release in January 2019 before scaling to its completed Mount Fuji release on August 27, 2019. The next release, Kilimanjaro, is set for November 27, 2019.
The Fuji release marked the official birth of the VideoCoin Network, which users can access via VideoCoin Studio, a fully managed interface that can be used to get up and running with a live stream pipeline on the distributed network. “People can sign up for an account at videocoin.network, fund their VideoCoin Wallet with VID tokens, and then start a real-time messaging protocol (RTMP) live stream,” Devadutta said.
A New Consensus Mechanism: Proof of Transcoding
VideoCoin’s decentralized video ecosystem includes features that ensure quality and consistency for users. Devadutta told us that the modern cloud infrastructure that supports video streaming consists of three parts: transcoding, storage, and distribution. Decentralizing these steps across multiple resources maximizes efficiency, but certain processes must be verified.
“If I install WordPress using a centralized hosting provider like AWS, I don’t have to worry about whether the code will execute properly or not because there’s a certain amount of trust there,” Devadutta said. “But in a decentralized world, the whole thing is upside down. You do not trust anyone. Instead, proof of work has to be established in a legitimate form.”
That’s where blockchain’s consensus protocols come in, providing a dynamic method for agreement and verification between the group as a whole. VideoCoin has implemented an on-chain proof-of-transcoding verification system that works via smart contracts.
“Once the work is done, the data is submitted back on the blockchain as a transaction, and we have verified nodes that pick up the transactions to make sure the work was real,” Devadutta said. “After the work is proven real, the VideoCoin transaction happens between the worker and the content creator.”
In this way, proof of transcoding is poised to raise standards in the quality of video streaming. VideoCoin’s next-gen infrastructure also allows developers to build decentralized apps that could take advantage of the verification system. For instance, a developer could build an app to provide irrefutable cryptographic evidence of intellectual property ownership for videos using proof of transcoding.
“Right now, there is no product that can do that for videos because establishing proof can get very complex,” Devadutta said. “But proof of transcoding can be applied to those types of use cases as well.”
A Groundbreaking Payment Method with Dramatic Cost Reduction
When VideoCoin reaches Mount Everest on May 27, 2020 — the final peak in the company’s product road map — Devadutta says users will start to see undeniable benefits in terms of costs that are 50% to 80% lower than centralized cloud providers. Much like Airbnb and Uber, VideoCoin will drive revolutionary price efficiencies by opening the video hosting market to the masses.
By 2020, the company will have released 35.4 million VideoCoin (VID) tokens. To avoid excessive token inflation, VideoCoin will only generate a set number of tokens. The network will also allow for fiat payments via a third-party payment processor so that content publishers and workers may complete transactions using a familiar currency. This payment method is intended to encourage adoption.
Node providers will be paid with both fiat currency and VID tokens, which will also serve as a reputational staking tool. Workers will be selected based on price, their number of staked tokens, and performance, ensuring top providers are rewarded for their efforts. Upon completion of work, workers will receive fiat payments and additional VID tokens to boost their reputation.
“The VID coin will evolve into a reputation management tool and where you need to stake X amount of VID coins to be able to participate in the network,” Devadutta said. “And the more you stake, the higher your probability of getting work.”
Onboarding Developers and Introducing VideoCoin for Miners
Devadutta said VideoCoin has been busy with onboarding, as more than 400 developers and 200 worker node applicants signed up in September alone.
“We are extremely excited that our decentralized network is attracting interest from the development community,” he said.
VideoCoin is not currently accepting third-party miners, but Devadutta said that will soon change, enabling anyone with a computer to participate in the network.
The company’s next mountain-themed release, Mount Kilimanjaro, will take place on November 27, 2019, and include a preview of the company’s worker software. “We want to get datacenters signed up, and that will kick up the supply side,” he said.