Earlier this week, at a team dinner, we got to talking about whether people can and will ever move off of Facebook. The question was posed not necessarily as an exercise into how to start a new social network, but to talk about the company’s influence and network power, and to ask: if something else took its place, wouldn’t that service naturally go through the same evolution? Create a hook, aggregate people and data and attention, and then monetize that attention with advertising. The same question can be posed of all institutions that grow too big and centralize power: aggregate a resource, attract people in, have network effects or other data lock-in to make it hard for them to leave.
When it comes to big companies, you can only believe in one of three things: 1) that if something grew too big, people will always have the freedom to vote with their feet and move on; 2) that government will step in and break it up; 3) that technology will improve to break us out of such lock-ins because technology wants to innovate and improve itself (it could be argued that the default state of technology is to always be in a process of self-improvement like this).
On the first, that we are free to choose whichever service, we know now is increasingly not true: with almost all types of centralization, and especially with network effects businesses, you can’t just move on easily. You’re on it because your friends are on it, and they’re on it because you’re on it. You’re on it, because it lists more products than the other sites and it already has your billing information, and that makes it more convenient. And because more people are shopping on it, more products and vendors get on it. So, the more powerful each network becomes, the harder it is to remove yourself (and your data) from it. The “well, if they increase prices, I’ll just go elsewhere” is just not true these days, because at some point a service gets so big that there aren’t many good alternatives that will have the stuff you need.
You can believe that governments will step in and do what they did in previous eras to fight anti-trust and break up things that get too big. You can believe that policy will change, but it may not always go your way (e.g., the state of the net neutrality debate now). Policy is always reflective of who’s running the government during any span of years. It can go one direction for a while, and then, as we see now, flip into another for a few years. So, you can’t solely believe in and wait for that either. (In fact, even when it does feel like it worked, as with Microsoft in the 90s, it could be argued it wasn’t just government intervention that made them stumble, but rather that they missed multiple technology trends in a row).
So ultimately, it leaves it up to technology to provide solutions for us and that’s why for those that are working in and watching the space, decentralized technologies like cryptocurrencies are so interesting.
In New York Times Magazine this weekend, Steven Johnson has a beautifully written essay on bitcoin, blockchain, the underlying technologies behind networks and why there could be a ‘there’ there. Like a great photo or idea, it’s one of those things you wish you had done, that you had written it this way for others to understand – that was my first reaction! He explains it better than any of hundreds of other posts and articles you’ll read on this stuff. Now when anyone asks me for a starter into networks and cryptocurrencies, I will just send them this essay as the first read.
You have to believe in one of these three things. Each has people behind the scenes, creating policies and movements and supporting each style of action. But it’s the belief in technology that has consistently moved us forward in the past, and the belief is that it will once more, and that it should.