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Update OPEN_PROBLEMS/DECENTRALIZED_DATA_DELIVERY_MARKETS.md
Co-authored-by: Jorge Soares <[email protected]>
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OPEN_PROBLEMS/DECENTRALIZED_DATA_DELIVERY_MARKETS.md

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@@ -337,7 +337,7 @@ The aim of the cryptoeconomic model is to build an incentive system to ensure th
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#### How it is done traditionally
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In traditional and centralized setups, there is no underlying need to align the incentives of all the participants in a data delivery network. The relationships between entities in the system are governed by a set of multilateral legal agreements between the different parties. These agreements offer the basic level of trust to ensure the good behavior of all entities in the system (clearly stating the SLA, and punishments for misbehaving or not fulfilling the contract). We currently see this setup in the multilateral agreements between CDNs, ISPs, and Cloud Providers to share resources from their infrastructures for a certain price in order to build their network of relationships that allow them to provide their content delivery services efficiently.
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In traditional and centralized setups, a set of legal agreements is used to govern the relationships between entities, align the incentives of all participants, and discourage disruptive behaviour. These agreements offer the basic level of trust to ensure good behavior by all entities in the system (clearly stating the SLA, and punishments for misbehaving or not fulfilling the contract). We currently see this setup in the multilateral agreements between CDNs, ISPs, and Cloud Providers to share resources from their infrastructures for a certain price in order to build a network of relationships that allow them to provide their content delivery services efficiently.
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In decentralized setups, it is not possible to use legal agreements to orchestrate the relationship between entities in the system. In recent deployments of hybrid CDNs, traditional, centralised CDNs leverage the resources of end users to deliver data with enhanced QoS reducing the load on their infrastructure and as a result the cost of upgrading/extending their infrastructure. End users are incentivized to contribute to the system with their upload bandwidth by making them eligible for better service. This additional reward is used to incentivize a behavior in the system (in this case users contributing with bandwidth in hybrid CDNs). However, the fact that there is still a centralized infrastructure managed by an entity with greater power over the rest of actors is enough to prevent misbehavior. This removes the need to design stronger reputation or reward systems. This does not represent a trustless setup.
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