Today, Rouzbeh Yassini is considered “the father of the cable modem.”
But in the early 1980s, critics called him “crazy” because of his radical – yet revolutionary – idea to bring the internet to the masses.
In 1977, Yassini moved from Iran to the United States.
After graduating from West Virginia University in 1981 with a degree in electrical engineering, General Electric (GE) recruited him to help build TVs, VCRs, and cameras.
While working on electronics, Yassini became intimately familiar with coaxial cables – a copper cable used to support phone calls or television broadcasts.
But Yassini knew the internet was the future.
So in 1986, he left GE for Proteon, a data networking company that made routers and bridges. These are the hardware needed for internet data transmission.
But in the early days of the internet, the technology was unreliable and slow.
In the 1990s, downloading an entire feature-length film could take a few days. A simple song took about 30 minutes to download.
At Proteon, Yassini discovered using existing cables was the most efficient solution to increase internet transmission speeds. So he proposed the radical idea to transmit internet data over existing TV cable lines.
If internet companies didn’t use the existing cable lines, he argued, they’d need to re-wire every city in America. Every street and every house would need to run another set of cables. That would take decades and hundreds of billions of dollars to achieve.
Skeptics said mixing video and data wouldn’t work. Some even called the idea “crazy.”
They told Yassini no one cared about data transfers. Customers were only interested in television.
Plus, cable companies wouldn’t entertain the idea. They believed transmitting internet data would interrupt their TV business.
But Yassini didn’t give up. He knew solving this problem would bring the internet to the masses and change the world…
So he left Proteon in 1990 to start LANcity, where he could pursue his dream to build a device that could transfer high-speed data and video over existing cable infrastructure.
This device became known as the cable modem… And it revolutionized the telecommunications industry.
They Called Him “Crazy”
In a 2014 interview with the Syndeo Institute at The Cable Center, Yassini recounted the pushback to his idea of sending TV and data via a cable modem.
(He actually hired his former manager from GE to help him develop the idea for the modem… But the manager wasn’t completely sold yet.)
So I hired my general manager from GE, who came to be the president and CEO, Fran Scricco. “Rouz, do you know how to build high-volume, low-cost products? The data networking industry needs such a thing.” I said, “I know nothing about digital. I’m an analog guy.” He said, “Well, we’ll teach you digital, you teach us high-quality and high-performance boxes.”
So we brought the two together, and the idea was – based on my experience at GE and [after] my experience at Proteon – I asked, “Why do we need two separate cables? We really can do all this in one cable.”
So that simple question — when I share that with people, people told me I was crazy about thinking that way because we have always done it on two separate cables. That was the spark. (Emphasis added.)
If you use the internet today, you probably know what a modem is. It’s the device that connects your home to your internet service provider (ISP).
The first model created by Yassini was half the size of a refrigerator and cost $18,000. It took a full day to make a single unit.
LANcity’s first customers were military bases, universities, and hospitals, as they were the only customers that could afford such an expensive machine.
The company had to give away modems for free to get the market started. And it nearly went bankrupt three times as a result.
Eventually, the entire tech industry realized Yassini’s modem was an amazing data transmission solution. So he sold the company and joined CableLabs in 1996.
At CableLabs, he helped develop Data Over Cable Services Interface Specification (DOCSIS). It established the industry standards for cable modems.
When Yassini told others his goal was to create a network of 100 million DOCSIS users, everyone laughed at him.
Yet today virtually every household and business in America has a modem that operates under DOCSIS. And over 5 billion people use the internet around the world.
To achieve that scale of adoption, the price of modems had to drop drastically. And thanks to Yassini’s contributions, that happened.
Here’s what he said in the same 2014 interview cited above:
Thirty years ago, when we started at LANcity, the cost of a cable modem was about $18,000, and it literally took us a day to make one. Over time, scale became the enabling factor as the barrier of cost went away around the materials. So 15 years later, the wholesale price of a modem was less than $25 per unit. No other consumer electronics device has seen that kind of price drop, that fast, ever.
That’s why today, people consider Yassini “the father of the cable modem.”
His device is one of the pillars of the multi-trillion-dollar internet industry.
If he had listened to the naysayers, we wouldn’t have companies like Google, Facebook, or Netflix. They couldn’t operate on dial-up internet.
His modem prototype created the infrastructure for companies to offer their products and services to billions of people over broadband internet.
Today, the biggest companies in the world – Amazon, Alphabet (Google), Apple, and Microsoft – rely on broadband internet. They made early investors as much as 267,224%, 6,944%, 267,665%, and 477,503%, respectively, in long-term gains.
Here’s why I’m telling you this…
Just like Yassini, there’s a group of developers pioneering scaling solutions for the next generation of the internet: the blockchain.
Using blockchain technology isn’t feasible for many industries today. It’s difficult to use unless you’re an expert… Transaction times can be slow… And transaction fees can be costly when traffic is high.
But developers are working on scaling solutions that will lower costs by up to 90% and increase transaction speeds by up to 100x.
And just like the cable modem of yesteryear carried internet data via existing cable lines, these projects will bring blockchain to the masses.
Layer 2: The Blockchain Version of the Cable Modem
In December 2020, transaction fees on the Ethereum network reached $16. That’s nearly a 250x increase from the start of 2020, when the average transaction fee was just $0.07.
The industry desperately needed a solution. The community couldn’t accept paying $16 per transaction if it wanted to see billions of users adopt the network.
That’s when developers came up with a radical new idea: Layer 2 networks.
You see, Ethereum is considered a Layer 1 solution. Layer 1 is the fundamental base network of a blockchain platform. It’s analogous to the pre-existing coaxial cables.
Layer 2 networks live above the Layer 1 network. This technology helps the Ethereum network scale by greatly reducing network congestion. Think of it like Yassini’s cable modem.
Just like the cable modem made internet usage more efficient, Layer 2 scaling solutions make Ethereum more efficient by reducing transaction costs and increasing speeds.
Layer 2 networks execute transactions off-chain (outside Ethereum). After it executes, the Layer 2 network posts the completed transaction back to Ethereum.
Moving execution off-chain uses significantly less block space on Ethereum – which reduces costs to the user.
And to further reduce costs, the Layer 2 rollups bundle hundreds of transactions and post them as a single transaction to the Ethereum network.
You can think of this part of the process like paying for drinks at a bar. Rather than paying for each individual drink throughout the night, it’s more efficient to start a tab and pay for them at the end of the night in a single transaction.
By streamlining the process and removing congestion from the main network, the networks dramatically reduce transaction fees.
And because the Ethereum network maintains proof of Layer 2 transactions, it doesn’t sacrifice security despite the reduced costs.
In fact, if you tally up all the transactions that Layer 2 networks process in any given day, it surpasses the Ethereum mainnet itself.
Take a look at the chart below. It shows the amount of Ethereum computing power Layer 2 scaling solutions use.
As you can see, Layer 2 scaling solutions are taking up an increasing amount of Ethereum’s computing power. That means Layer 2 networks’ usage is increasing.
This growth shows no signs of letting up. And why would it?
Layer 2 networks offer faster and cheaper transactions than the Ethereum mainnet – in some cases over 90% cheaper and 100 times faster.
It’s like going from dial-up to broadband internet.
The Next Game-Changing Technology
The development of Layer 2 scaling solutions will bring blockchain technology to billions of people.
I know I sound like a broken record… But so did Rouzbeh Yassini.
Just like my publisher thought I was “crazy” when I told them I wanted to recommend crypto back in 2016…
People thought Yassini was “crazy” when he proposed a radical solution to scale the internet using existing cable TV technology.
For years, people said cable modems wouldn’t work.
Skeptics said they were too expensive. Cable companies thought modems would disrupt their existing TV services. And analysts said consumers didn’t want them.
But Yassini stuck to his conviction…
His first modem prototype cost $18,000 and was half the size of a refrigerator. Today, you can fit a modem under your desk for as cheap as $25.
The modem’s scalability and ease of use paved the way for 5 billion internet users… and made early investors in internet companies fortunes.
During the next bull market, we believe Layer 2 solutions will see the greatest price explosions.
Friends, people dismissed Yassini’s cable modem idea in the early 1990s because they didn’t understand just how big the internet would be.
But those who ignored Yassini missed out on the opportunity to help develop a game-changing technology – and the fame and fortune that came with it.
I don’t want you to make the same mistake.
One way to profit from the growth of Layer 2 technology is to simply buy Ethereum (ETH). It will be the foundation for all Layer 2 protocols.
But there’s another subsector of crypto that will benefit from a new trend I’m watching: The development of a digital dollar.
I’ve put together a briefing to explain what this new digital dollar regime means for you and your money… including the name of a crypto project also set to profit from its rollout.
You can click here to watch it for free.
Let the Game Come to You!
Big T