Comment by chubot | Hacker News Reader

Comment by chubot | Hacker News Reader

The diagram about tech monopolies is interesting, but I don't understand why he thinks it will happen.

You need a new business model to go along with the new tech. What is that for crypto?

- For Microsoft, it was selling software instead of hardware like IBM. "Open source" hardware complements software. This was hugely profitable.

- For Google, it was selling user attention instead of software like Microsoft. Open source software complements web services. This was hugely profitable.

This analogy breaks down here a bit because there is a strong incentive for "open source" hardware (money for dozens of vendors), but not as much for open source software. It's more of a byproduct of the SaaS movement. I guess you could say the real corporate motivation there is developer attention, e.g. the purchase of Github. So the analogy falls down a bit.

- So now he claims we will have open source data. I would love this, but why? What's the new business model? Companies USED to provide APIs in the 2008 era when they thought it would benefit then, but they've now pulled back -- Twitter, Facebook, Google, etc. Google APIs are in terrible shape.

He said someone proposed a regulation that Twitter be forced to write a better API? Huh?

That would be analogous to the government forcing Apple to open up its hardware like the IBM PC, or the government forcing Google to open source its search algorithms. I see why it sounds nice, but I don't think it will happen.

This is an honest question, not trying to pour water all over this ... what's the new business model, or is there at least a candidate?

There are a few candidates. The most obvious case of the technology is currency. Another interesting use case is social media and it's interesting that Steemit wasn't discussed.

I love Steemit's idea (not necessarily implementation) of a decentralized social media platform. All the data is public so now there's a decoupling of the network problem and interface problem. Facebook for example is impossible to compete against due to network effects. If you have a better version of facebook, it's very hard to get people using it because all of their friends are already on Facebook. Steemit decouples the problem by enabling people to create new interfaces to it and everyone with a steemit account can already immediately use it because their account, followers, and the rest is all the same data. Someone connected IPFS to Steemit and created DTube which basically the same thing as Youtube.

Why use a decentralized social media platform? The two biggest reasons are that decoupling the data from the interface creates better and new interfaces and content creators are rewarded with money. Right now, social media companies like Reddit get money for the content you create. With Steemit, the rewards go to those who create content and those who run the network. It seems like a more fairer system. Steemit does have problems though but the idea I think is some version of what we can expect to see more of in the future.

Hm so Steemit scrapes Facebook so your friends are there? Why wouldn't Facebook just cut them off?

In general I don't think it is possible to create new interfaces to social media sites without the owners consent. It is too easy for them to break you on purpose, and that has happened many times in the past.

Maybe I'm misunderstanding how it works.

Decentralization also seems orthogonal to this issue. If someone could gain users by creating a new UI on top of Facebook, it would have already been done in a centralized fashion.

Steemit is completely separate from Facebook and you have to create an account there. In terms of interface, it's a lot like reddit.

The thing that makes Steemit unique is that to create your own version of Steemit, you just build an interface on the blockchain. You and every other developer has unlimited access to Steemit users, followers and other data. This allowed projects like DTube (a decentralized Youtube) to immediately have millions of users. If the Steemit website starts placing ads everywhere for example, someone can create a different better interface. The point of this decentralization is exactly what the author mentions. You decouple user data from the interface enabling companies to compete on interfaces instead of network effects.

Businesses where the network provides the value: Facebook, AirBnb, Uber, Apple's iOS store, Google search/adwords, Shopify's platform etc.

These businesses profit by being the middlemen in transactions between two users. Bitcoin, for example, competes with traditional banking by cutting out the intermediaries, and their margins.

Ledgers are the simplest application. Next up will be platforms. They often have rather large margins (~20-40%) that are very attractive targets for competition.

I think the analogy doesn't work as well but the concept does apply a little.

This time, instead of one megacandidate, we may have many that are enabled by switching from platforms run by monopolies over to open decentralized platforms. So the new business model is basically any business model that wants the large network from that decentralized platform along with, and here's the business advantage, a fair playing field.

I've been thinking about this to, but one large example of "open source data" is IEX[0], they provide realtime order book info for thousands of stock/etf/etn tickers. They must see some financial benefit in doing so.

The big reason why those companies pulled back is because they realized that they don't think they will have a monopoly in the long run on being able to monetize the data better than others, every other excuse just seems to be icing on the cake because if they were confident, they open up the data they collect more.

[0] https://iextrading.com/developer/

At this point in time just developer recognition is enough for a lot of people to work hard on a project that has an impact for free. The basics of Twitter is trivial to implement in a centralized way at this point (unlike Google which solves a hard ranking problem), but it needs decentralized serverless infrastructure, that hasn't happened yet. I think decentralized money has to win first, and other infrastructure can come later.

Reply on news.ycombinator.com