Bitcoin and Natural Monopolies

[Anonymous]

Let's look at Facebook: It as a service cannot function if our populace uses multiple separate social networks. A user will not be inconvenienced with logging-in to multiple services in order to interact with different friends, especially if said user is a casual user of the internet. Naturally, as a matter of a genuine desire to have a single place to meet with all acquaintances online easily, users will gravitate towards one service according to societal and peer pressures. We know this as Facebook today. Facebook has what we call a natural monopoly since it sufficiently meets the desires of its users and the requirement that it be the main service.

This monopoly can only be toppled if the value of having a single meeting place is superseded by new innovations in another social service, which is incredibly difficult. Minor additions and improvements will not create enough pressure to overpower the societal and peer pressures that keep users on the original network as shown with the failure of Google Plus.

Unless the original service is severely flawed from its inception -- as with the poorly-made interfaces and annoying quirks found in Myspace -- will users leave a natural monopoly for a superior competitor.

Bitcoin has the same attributes of a social network. The world indeed has the desire for a single digital currency to trade in instantly across the planet. Multiple currencies add severe overhead that can be easily eliminated. We must also note that the more supporters of a crypto-currency there are, the safer it is from attack. People will certainly desire the strongest security more than anything else.  There should be only one currency in the end if we truly desire a more efficient and stable world.

Can Bitcoin be it? Is Bitcoin severely flawed or is Bitcoin strong enough to continue to be the crown-champion, the natural monopoly of crypto-currencies?

This will be answered all in good time but feel free to make your predictions.

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[evoorhees]

Good questions.

I think the world market wants a few currencies, because they provide different characteristics. IE - both gold and silver are good monies concurrently. The world needs a solid digital money, that would act to compliment hard assets. Bitcoin may be that currency.

It would be unlikely, however, for there to be multiple digital currencies unless they have profoundly different characteristics. I cannot imagine a world with five somewhat similar crypto-currencies... it won't happen. We would not see SolidCoin and Bitcoin exist simultaneously long term. One would did win.

[Anonymous]

Good questions.

I think the world market wants a few currencies, because they provide different characteristics. IE - both gold and silver are good monies concurrently. The world needs a solid digital money, that would act to compliment hard assets. Bitcoin may be that currency.

It would be unlikely, however, for there to be multiple digital currencies unless they have profoundly different characteristics. I cannot imagine a world with five somewhat similar crypto-currencies... it won't happen. We would not see SolidCoin and Bitcoin exist simultaneously long term. One would did win.

I cannot either unless our telecommunications are severely divided for whatever reason. If there will be multiple crypto-currencies, it will be because we have traveled to other planets and possibly galaxies.

[btcbaby]

Let's look at Facebook: It as a service cannot function if our populace uses multiple separate social networks. A user will not be inconvenienced with logging-in to multiple services in order to interact with different friends, especially if said user is a casual user of the internet. Naturally, as a matter of a genuine desire to have a single place to meet with all acquaintances online easily, users will gravitate towards one service according to societal and peer pressures. We know this as Facebook today. Facebook has what we call a natural monopoly since it sufficiently meets the desires of its users and the requirement that it be the main service.

This monopoly can only be toppled if the value of having a single meeting place is superseded by new innovations in another social service, which is incredibly difficult. Minor additions and improvements will not create enough pressure to overpower the societal and peer pressures that keep users on the original network as shown with the failure of Google Plus.

Unless the original service is severely flawed from its inception -- as with the poorly-made interfaces and annoying quirks found in Myspace -- will users leave a natural monopoly for a superior competitor.

Bitcoin has the same attributes of a social network. The world indeed has the desire for a single digital currency to trade in instantly across the planet. Multiple currencies add severe overhead that can be easily eliminated. We must also note that the more supporters of a crypto-currency there are, the safer it is from attack. People will certainly desire the strongest security more than anything else.  There should be only one currency in the end if we truly desire a more efficient and stable world.

Can Bitcoin be it? Is Bitcoin severely flawed or is Bitcoin strong enough to continue to be the crown-champion, the natural monopoly of crypto-currencies?

This will be answered all in good time but feel free to make your predictions.

Nice observation.  Is btc::log the Facebook of  Bitcoin Forums ;p ?  It definitely feels like MySpace here on some days LOL.

[jancsika]

Let's look at Facebook: It as a service cannot function if our populace uses multiple separate social networks. A user will not be inconvenienced with logging-in to multiple services in order to interact with different friends, especially if said user is a casual user of the internet. Naturally, as a matter of a genuine desire to have a single place to meet with all acquaintances online easily, users will gravitate towards one service according to societal and peer pressures. We know this as Facebook today. Facebook has what we call a natural monopoly since it sufficiently meets the desires of its users and the requirement that it be the main service.

If it sufficiently met the desires of its users, then there's no way four dudes who happened to hear a speech by Eben Moglen about Facebook's privacy issues could have raised over $200,000 to start a decentralized social network. (Diaspora)

Anyway, there is no technical requirement that a functional social network needs to be centralized-- that just happens to be the architecture Facebook-- nor is there a requirement that everyone use the same social network-- a federation of social networks which can communicate with each other would suffice.

[genjix]

https://intersango.com/ vs http://mtgox.com/
every mining pool vs deepbit
https://bitcoin.org.uk/ vs bitcoinalk

see a pattern here?

[Elwar]

A monopoly cannot exist without government intervention.

[elggawf]

It's my personal opinion (shared by others of course) that you misunderstand the situation with Facebook.

As someone elsewhere on the internet pointed out once, it's a flawed observation to say "MySpace lost, Facebook won."

The truth is, MySpace won, then Facebook won. Someone else will win in the future.

Truth be told, entire swathes of my extended family can't stand Facebook, they're only still there because they view it as a games portal - it's still a convenient way to get a message to the majority of my extended family at once, but that convenience in my case hinges solely on the availability of new games for most of them to enjoy.

Up until Google Plus a) added games and b) started removing users going by pseudonyms, I would not have called it a failure. Now, I'm not so sure.

[payb.tc]

https://intersango.com/ vs http://mtgox.com/
every mining pool vs deepbit
https://bitcoin.org.uk/ vs bitcoinalk

see a pattern here?

yeah when i found bitcoin.org.uk i was quite impressed, and signed up, made a few posts. But I guess the lack of post volume led me to gravitate back to this forum, simply because there are more people here.

[ctoon6]

i can tell you why google plus has failed, because nobody could join when it had all the hype. so you can pretty much blame google for that lol.