There are a lot of moving parts in Althea, just like any computer system. The difference between Althea and most networks is that Althea is decentralized and so different members of the public can perform different roles. For this reason, it’s good to understand the roles and how they interact.
These nodes are involved in actually connecting Althea users to the internet.
Subscribers (end users)
Althea’s goal is to provide faster, cheaper internet access to subscribers. A subscriber has an Althea router into which they have loaded tokens (a dollar-equivalent stablecoin). They’ll usually also have an antenna on the outside of their house, known as a CPE (customer premises equipment). This is the same kind of antenna used by centralized wireless ISPs. Some subscribers are connected over wires, for example if they are in an apartment building, or if they have run an outdoor ethernet cable from their neighbor.
Subscriber’s routers automatically pay for their service in two ways:
- Bandwidth payments: This is a per gigabyte price, similar to how cell phone data is billed, but much cheaper. This is paid directly to the relay(s) to which the subscriber is connected. A subscriber’s router will choose whichever relay is offering the best combination of price and quality.
- Subscription fee: This is a fixed monthly fee paid by automatically the user’s router to the organizer of their local Althea network. This compensates the organizer for providing technical support and service, and allows them to spend time and money promoting the network in their area. Organizers support the network as a part time effort or full time job.
Subscribers connect to the internet over exit nodes, which are just like VPN servers. A subscriber does not need to worry that the relay(s) they are getting internet access from can see their browsing history, and relays and gateways don’t have to worry about getting in trouble for anything subscribers are doing on the network. The exit node also helps keep relays honest by performing automatic speed tests behind the scenes.
Relays make up the physical infrastructure of Althea. They do the work of transmitting data across town and getting internet access from gateways to subscribers. Relays can come in many shapes and sizes. A few common examples:
- A smaller relay that might only be connected to one other subscriber using a second CPE, helping their neighbor get access while making a little money.
- A network of users who are both subscribers and relays, where every house has several links to other nearby houses. In this type of network Althea’s routing protocol balances data flows over all available links. Nodes switch from buying to selling bandwidth from second to second.
- A relay that uses sector antennas to connect to up to 50 subscribers. Sector antennas have a wider beam width and are designed to have a lot of CPEs connected to them.
- A relay that uses a faster point to point antenna to connect to another relay which is connected to a lot of subscribers.
- A relay that is in an apartment building, selling bandwidth to tenants over the building’s wiring.
- A relay that is selling bandwidth to a neighbor over an outdoor ethernet cable. These are common in the Althea network in Medellin.
There’s actually no difference between subscribers and relays in the Althea firmware. In a few of the above examples, relays are subscribers partially offsetting their own internet usage by selling bandwidth. In some of the other ones, the relays are professionally run.
Every relay in an Althea network earns a profit on top of what it buys bandwidth for. For example, if you are buying bandwidth from a neighbor for $0.10/gb, you might charge a profit of $0.05/gb and earn a total of $0.15/gb.
This means that subscribers will tend to get better prices the closer they are to a gateway, but we don’t expect prices across the network to be as variable as you might think, because relays will give each other discounts in order to be able to reach new subscribers. If I’m selling you bandwidth at $0.10/gb (same as I charge the 10 other subscribers connected to me), but you have the ability to reach 50 new customers, I might want to sell you bandwidth at only $0.02/gb and make twice the money I am now.
This market based system will also incentivize “bandwidth arbitrage”- when someone realizes that they can buy bandwidth in a cheaper part of the network, set up a long range link, and sell the bandwidth in a more expensive part of the network. Althea’s price-aware routing protocol allows routers to switch over to cheaper sources of bandwidth within seconds.
Gateways physically connect an Althea network to the Internet. The technical definition of an Althea gateway is a node that sells bandwidth using Althea, but gets the bandwidth somewhere else, usually a monthly payment to an ISP. You may be wondering- where does the internet “come from”? The short answer is that there are wholesale ISPs - known as tier 1 or tier 2, which have a nationwide and global reach. They specialize in connecting a city or a region to the whole world. Retail ISPs, or tier 3, offer plans to homes and businesses while purchasing service from the wholesale ISPs.
Althea currently competes with the retail ISPs, since they are often worse run and more monopolistic than the wholesale market. A typical Althea network has one or more gateways buying internet wholesale and selling it into the network. Any number of nodes in an Althea network can be acting as gateways, and they compete against each other to provide bandwidth to the network.
People running gateway nodes do not have to worry about what people using their bandwidth are doing, and users don’t have to worry about gateway nodes seeing their traffic because of exit nodes.
Althea network organizers help subscribers in their area install the equipment to get on the network, and provide technical support to subscribers. They also help promote their network to get subscribers to sign up so that relays and gateways can make money. In these roles they are much like traditional ISPs, except for the important difference that they do not own the infrastructure that the network is built on (this infrastructure is owned in a distributed manner by individual relay and gateway nodes). In many traditional ISPs, the role of owning and monetizing infrastructure dominates, and customer support often falls by the wayside.
Network organizers receive a fixed monthly fee from every router on the network, in contrast to relays and gateways, which are paid directly by the subscribers and other relays connected to them. An area, and the Althea nodes in it, can actually have several different network organizers competing with one another. Organizers run virtual networks called “subnets”, and any given relay can be members of several. This means that if an organizer is not providing good customer service, subscribers can easily switch to a different organizer while remaining connected to the same relay.
This flexibility also benefits the organizers. By spreading the infrastructure investment of the network out among property owners in their community, the network can grow larger faster, while organizers focus on customer service. By aligning incentives among many people in the area, the Althea network as a whole has an advantage over traditional ISPs.
Exit nodes logically connect one or many Althea networks to the Internet. They often will be in another city at a data center, rather than being part of the physical network. They provide the public IP addresses used by Althea subscribers to access the public internet. They also keep subscriber’s browsing history secure from the physical nodes which make up the network, like a VPN. The Althea team runs default exit nodes, but it is also possible for a subscriber to use a different exit node.
The blockchain processes transactions between nodes on the physical network. The currency used in transactions between routers is a stablecoin, which maintains its value at exactly 1 US dollar. This way users do not have to deal with currency fluctuations. There is another token on the network called ALTG, or Althea Governance token. This is used to govern the network as explained below.
Validators compile individual transactions into blocks. In this way, they are similar to miners in Bitcoin. Bitcoin miners compete to mine the next block by trying to waste the most electricity. Althea validators compete by getting the most Althea token holders to delegate coins to them. When you delegate to a validator, it’s a vote of confidence that they will create blocks correctly and stay online. If they don’t, all token holders that have delegated to them will lose 5% of their delegated coins. Validators take a small percentage of the block rewards and transaction fees they earn, and pass the rest on to the token holders delegating to them.
Validators also play an important role in governance. Token holders can vote on proposals for upgrades to the blockchain’s code (and maybe someday physical node’s code). But if a token holder doesn’t care enough about an issue to vote, the validator they have delegated their tokens to can vote with those tokens. In this way, the governance system is like a representative democracy.
The Althea blockchain is built on the Cosmos blockchain framework, so you can learn more about how it works by studying Cosmos.
ALTG token holders
As explained above, these people have the ultimate control over the Althea blockchain by staking their coins with the validators who run the blockchain software. They also receive transaction fees from every transaction between routers. These tokens will be mostly held by the Althea community. As of 2019, we are granting them to people who are working on starting Althea networks. We may also grant some to important players in the open source internet world, such as standards bodies like the IETF and others. The company behind Althea (Hawk Networks, inc) will hold 25% of these tokens to finance ongoing development from the transaction fees.