Near Protocol deep dive: hiding in plain sight
Every now and then you come across a product that genuinely improves your life.
The first thing that springs to mind when I think of this is Bluetooth headphones.
I lived in London for most of the last decade, and I used to either cycle or run everywhere, usually while listening to an audiobook.
The wires from my headphones were annoying, and they’d often get pulled out or caught on something. But you just accepted it. That’s the way it’s always been ever since Sony brought out the first Walkman in the late 70s.
It’s the price you paid for having music, audiobooks and podcasts on the go. Well, that and the increased likelihood of getting run over.
Then around 2015, Bluetooth ear buds became a thing, and I couldn’t believe how much these £18 gadgets changed my life.
(This was about a year before Apple AirPods came out, so only cheaper brands were doing them at the time, and you could get a decent pair for less than £20.)
You didn’t have to fiddle about with the cable anymore. Plus, you could leave them in your ears when you got changed or took a shower (which you do a lot if you run or cycle everywhere). And you could leave them in when you put your phone down on a desk and walk off, which is great if you want to listen to an audiobook while you’re cooking or something.
For the first time ever, you were no longer tethered to a headphone cable. It was like magic.
But Bluetooth ear buds never arrived with much fanfare. It felt like more of a groundswell thing.
It wasn’t until Apple released its AirPods in late 2016 that the zeitgeist caught on to just how useful they could be.
I know this all sounds trivial, especially if you don’t listen to a lot of podcasts or audiobooks. But small things like this really do increase your enjoyment of life.
Back in the day, Aristotle said, “The wise man seeks not pleasure, but freedom from care and pain.”
Basically, we achieve happiness not by adding positives to our lives but by removing the negatives.
And removing those headphone wires removed a small but significant negative that you had to deal with multiple times a day, every day of your life.
Now, why am I writing about how much I love Bluetooth headphones in a crypto deep dive?
Because I feel like this month’s deep dive project – Near Protocol – could have a similar trajectory.
Like Bluetooth headphones, it combines a few cutting-edge ideas into one product. And by doing so, it removes nearly all of the negatives that drag most major crypto projects down at some point.
It’s also been quietly plugging away, doing its thing, while the cryptosphere lurches from one hypecoin to the next.
If we look at the history of crypto over the last couple of years…
First it was Cardano, then Solana.
Then for a while the middleweights grabbed the hype – Fantom, Avalanche, Algorand.
Next Terra Luna started offering 20% APY and blew everything else out of the water… before blowing itself up in a spectacular death spiral.
Meanwhile, memecoins like Doge Coin and Shiba Inu were battling it out with scam coins like SafeMoon to see who could syphon the most money out of crypto newbies’ bank accounts.
At the same time, various Ethereum scaling solutions like Loopring, Harmony One, Polygon, Arbitrum and Optimism were taking turns at being branded the new hotness and then fading into obscurity.
Through all this, Near Protocol was there working away, building its foundations, never really quite catching the limelight.
But as those other projects continue to lose their shine, Near Protocol just keeps getting brighter and brighter.
So I think it’s about time we did a deep dive and see what it’s made of.
(Note: from now on I’m just going to refer to this project as Near, rather than Near Protocol to avoid needless repetition.)
Market cap category
Here’s how I define cryptos by their market cap ranking.
- Blue chip: 1-10
- Large cap: 10-50
- Mid cap: 50-100
- Small cap: 100-200
- Micro cap: 200+
As I’m sure you know, all cryptos are highly volatile, but the smaller the market cap, the more volatile they can be.
And the smaller the market cap, the more inherently risky a crypto is. It takes much less money to manipulate its price or to attack its network.
It also, naturally, has less scrutiny. So it’s more likely to have flaws or bugs that haven’t been discovered yet.
But it also has more potential for explosive growth.
I put this section first in my deep dives because it’s probably the most important thing to think about.
According to CoinGecko Near is currently the 38th biggest crypto, with a market cap of $1.68 billion… which by my arbitrary definition makes it a large cap.
At the moment, with all the hype and all the doom surrounding Generative Artificial Intelligence (AI), blockchain has taken a back seat.
Who cares about a decentralised network when you can type a few words into an AI prompt and get it to pass your law degree, code an app or create your entire marketing plan for you?
AI is creating absolute terror among “knowledge” workers: educators, coders, marketers, lawyers, journalists… you name it.
And it’s also creating absolute joy in upper management at virtually every “white collar” company in the world… because they know they will soon be able to slash their workforce and save a ton of money.
In short, in the world of tech, right now, it’s all about AI, and very much not about blockchain.
So, you might find it strange to hear that Near actually started out as an AI project and then pivoted to blockchain.
As CoinDesk writes:
Illia Polosukhin [Near’s co-founder] didn’t set out to build a blockchain protocol. Ever since he was a 10-year-old in Ukraine, Polosukhin has been fascinated by machine learning and artificial intelligence – he thinks it might have started with seeing the movies “The Matrix” and the extremely underrated “A.I.”
And Polosukhin was smart. Even brilliant. So in 2014 he joined Google Research, where he worked on developing the models and tools that would eventually feed into artificial intelligence. He co-authored papers and he moved the science forward. But he wanted to do more. “Google has a lot of benefits, and it’s a great place to learn, but it moves really slowly,” says Polosukhin. “I wanted to move faster. I wanted to build a startup.”
So in 2017, along with Alexander Skidanov he co-founded NEAR.AI, which, in the beginning, was completely focused on artificial intelligence. It had nothing to do with blockchain or crypto or non-fungible tokens (NFT) or HODLing.
That was then. Now, of course, Near is one of the most prominent blockchain protocols in the space.
Why would someone at the forefront of AI choose to leave it behind and move into blockchain?
Polosukhin’s answer is what drew me into doing a deep dive on Near in the first place. He has such an interesting take on how all of this will pan out, and it really made me think.
Here’s what he said in that CoinDesk interview when asked, “What excites you about AI and blockchain, why is it more than just hype?”
I think AI right now will become a tool to break a lot of the current societal systems. So you can DDoS the legal system with frivolous lawsuits. You can create fake candidates and try to get them elected. You can create fake companies and raise money for them.
I'm not even talking about the more sophisticated stuff. And so our plan is to organize a hackathon to get people to break all the stuff and then suggest solutions. And the reality is most of the solutions will use Web3 because you need authentication, you need identity, you need traceability, you need all those pieces embedded across the whole spectrum of our society.
(And if you’re not familiar with what a DDoS attack is, here’s a good explanation from Cloudflare:
A distributed denial-of-service (DDoS) attack is a malicious attempt to disrupt the normal traffic of a targeted server, service or network by overwhelming the target or its surrounding infrastructure with a flood of Internet traffic. From a high level, a DDoS attack is like an unexpected traffic jam clogging up the highway, preventing regular traffic from arriving at its destination.)
I’d never thought of that problem before, but it’s definitely going to happen. With AI you can literally break down the structures of society with virtually zero effort. And the only way to stop that happening is as Polosukhin says with “Web3 because you need authentication, you need identity, you need traceability, you need all those pieces embedded across the whole spectrum of our society.”
As you may expect, a crypto created by someone with that kind of insight isn’t exactly going to be lacking in vision.
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