Crypto gets its fast lane on the information superhighway

The signal sent from Valentia Island in Ireland via the first viable transatlantic telegraph cable in 1866 was so weak by the time it arrived at Heart's Content, Canada that it couldn’t be read by a standard telegraph receiver.

Instead, a “mirror galvanometer” used tiny mirrors to effectively turn the faint electrical pulses into points of light on a wall — a point to the left was a dot and a point to the right was a dash (basically).

A sharp-eyed operator would record the lights as dots and dashes and then relay the message over a terrestrial cable, typically to New York on one side and London on the other.

This was an information revolution: Cotton prices in London, for example, could travel via copper wire to New York in as little as two minutes instead of the two weeks it had previously taken by ship.

In 1867, the process got significantly more scalable when the mirror galvanometer was replaced with a siphon recorder, which automatically recorded incoming telegraph messages by wiggling an inked stylus over a roll of paper tape.

It was, in a way, the world’s first inkjet printer, and fast enough to capture signals moving too quickly for the human eye to follow.

This raised the rate of transatlantic communication to a blistering 10 to 12 words per minute.

Morse code sent over copper wires remained the primary means of trans-oceanic communication for nearly a century — right up until copper started carrying voices.

In 1956, the first transatlantic telephone cable, TAT-1, sent voices between continents by converting them into electrical signals that could travel down a coaxial cable with the built-in amplifiers that stopped them from degrading into noise.

By dividing the cable’s bandwidth into non-overlapping channels, TAT-1 could carry 36 two-way phone calls simultaneously.

The seventh generation of transatlantic copper wires — TAT-7 in 1978 — carried thousands of phone calls over a single, one-inch-thick copper wire (plus a few fax-machine messages and even some proto-internet traffic).

That was approximately the physical limit for electrical signals going through copper — so messages began to travel as light through glass instead.

TAT-8 was the world’s first fiber-optic cable: a four-thousand-mile long stretch of pure glass that can miraculously bend around corners.

That’s probably how this newsletter got to you: as pulses of light zipping through glass threads that are then turned back into machine-readable electricity by a router.

In a way, it’s the reverse of the mirror galvanometer: Where copper cables carried electrical signals that turned into light, optic-fiber cables carry light that’s turned into electrical signals — conveying ones and zeros instead of dots and dashes.

Incredibly, just a few impossibly long bundles of impossibly thin glass can carry the entire internet traffic between the US and Europe, moving at two-thirds the speed of light.

After making landfall, the traffic bounces from one router to the next until it reaches its final destination, just a fraction of a second after being sent.

For some, that’s not fast enough.

Data sent over the public internet tends to take a meandering path to its destination, crisscrossing a continent as each router forwards traffic along the least-expensive path, instead of the most direct one.

This creates “jitter” — the unpredictable variation in when data arrives over the internet.

Jitter might cause your Zoom call to freeze for a second or two, or make you miss a good price on the stock market — the modern equivalent of sending cotton prices across the Atlantic by ship.

As a result, big internet companies and high-frequency trading firms don’t use the public internet very much.

Instead, they send their data over private networks: direct fiber links between data centers that never touch the chaotic and unpredictable public web.

Sometimes, these links are wholly owned, as with Google’s Grace Hopper fiber optic cable that exclusively carries data between its data centers in the US and UK.

More often, however, these are leased circuits on existing, underutilized fiber — private “lanes” carved out of public internet infrastructure and rented by the mile.

This is especially useful in crypto.

Every trade on, say, the New York Stock Exchange happens on the same servers in New Jersey, so it’s easy enough to lease capacity on a cable connecting straight to them (or, even faster, connecting wirelessly through the air).

A trade on, say, Ethereum, however, can happen anywhere: One block might happen in Singapore, because that’s where the validator that won it happens to be located, and the next block might happen in Dubai or New Jersey.

That makes sending a blockchain transaction highly unpredictable: Over the public internet, there’s no telling how long it might take to reach the server that’s building the next block, because there’s no telling what route it will take.

The solution, of course, is to create a more direct route, which is why crypto people have been unusually excited about DoubleZero.

It took me a long while to figure out why exactly that was, but only because I didn’t really know how the internet works.

I had to go all the way back to mirror galvanometers to make sense of it. But once you get to least-cost routing and jitter, it starts to make sense.

DoubleZero is a decentralized network that uses crypto tokens to incentivize people to provide a kind of private (but permissionless) express lane through the internet for blockchain data — typically with cable capacity that was otherwise going unused.

This is great for crypto traders who might otherwise feel like they’re trying to trade cotton futures with nothing to go by but two-week old prices.

It’s admittedly a niche market, but DoubleZero has bigger aspirations: The same deterministic, low-jitter routing might benefit content-delivery networks, gaming and large language models — anything that depends on speed and predictability.

If DoubleZero’s token incentives can inspire owners of otherwise idle capacity to provide it, that might become crypto’s contribution to the ever-faster way the world sends information.

— Byron Gilliam

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Arkham is a crypto exchange and a blockchain analytics platform that lets you look inside the wallets of the best crypto traders — and then act on that information.

Arkham’s Intel Platform has a suite of features including real-time alerts, customizable dashboards, a transaction visualization tool, and advanced transaction filtering — all of which is accessible on all major blockchain networks, and completely free.

Arkham’s main product is the exchange, where users can express their trade ideas against the market.