A Summary of My Thoughts on Nostr

This is a copy of my reply to @MaxAWebster.¹

Thanks for asking! I probably still need to refine my thoughts since so far, I never really bothered to share my thoughts but here's what I have so far:

I am thinking about this in a "decentralized per use case"-way since nostr is more than just social media. But for the sake of the argument, I will focus on the social media use case for nostr since it's (currently) the most popular use case afaict:

Social media on nostr isn't like bitcoin where it doesn't matter which node you use to broadcast your transactions to the network; you can broadcast transactions just as well using your own node vs someone else's node. All that matters is that your transactions end up in a block somehow. It also doesn't matter who mines the block. Additionally, every bitcoin node has an incentive to store the same data (= find consensus) because they don't want to end up on a worthless fork of bitcoin.

This is not the case for social media on nostr: It matters which relay (or caching service) most of the users use to access the network because they don't serve the same data. So network effects harm the decentralization of the network: Most are going to rely on the same someone else's relay (or caching service) so they can be sure to find each other ("find consensus") that way.

This was the user's perspective. Now to the business perspective: once a business has, let's say >50% of users for a specific use case on nostr, why should they care about the minority who isn't even paying them? Additionally, most of their users wouldn't even ever notice that they are getting slowly walled in ... So because of these network effects, I think there will be a few winners and a lot of losers per use case on nostr, just like big tech now after 20+ years of Web 2.0.

But what do I know, I am just watching from the sidelines 👀

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