Conclusion: We have proposed an incentive system for decentralized file hosting without relying on trust or heavy-weight cryptography. Client and server perform an atomic swap of coins for files using an optimistic protocol. The server responds with a file that is allegedly encrypted correctly. The client buys the decryption key with a Lightning payment, and if the file doesn’t decrypt correctly, the client can financially punish the server for cheating, which is a strong incentive for servers to act honestly. Currently, implementing the bond contract requires workarounds such as using the Liquid sidechain, however, reactivating OP CAT would be sufficient to implement BitStream directly on Bitcoin.

Introduction: Decentralized file hosting networks lack a well-aligned incentive system. Currently, paid servers for platforms like Nostr often underestimate their operating costs when charging a monthly payment for storing a user’s data. Users can split their payment into daily or weekly increments if they don’t trust the servers, but this strategy doesn’t resolve the economic challenges servers face. Users are paying to upload their data, so servers are not paid per download. If a server fulfills too many download requests from various users, then the server can become overwhelmed from the bandwidth costs outweighing their earnings. In the context of video hosting, where the traditional revenue model may falter, BitStream’s protocol presents a sustainable alternative. For instance, a single user might upload a video once, incurring a one-time cost, but if that video becomes popular and is downloaded 100,000 times, the server’s bandwidth costs could skyrocket beyond the initial upload revenue. BitStream’s pay-to-download approach offers a solution: it allows the server to charge for each download, ensuring that the revenue scales with the popularity and demand for the media, creating a balanced and profitable ecosystem.