Michael Elling
Sep 3, 2018 · 1 min read

The flaw in this thinking is that EVERYTHING is dominated by network effects. But there are NO NATURAL monopolies. Sounds like a contradiction? Not really, because in nature, value captured at the core is equilibrated, as is value between systems and networks.

Only in MAN-MADE systems (governments, firms, socio-economic and political institutions, marriage, etc…) is the value equilibration lacking. So obviously, with unfettered and unregulated winner takes all competition, the result will ALWAYS BE monopoly.

The way to getting around this is not through distributed systems based on blockchain, rather a centralize-decentralized hierarchical network (CDHNs) architecture with settlements that run north-south (between app and infrastructure) and eash west between actors, networks and ecosystems. These settlements should be based on marginal costs (that which clears marginal supply and demand ex ante) and mirror gravitational forces.

These settlements are driven by those actors who can handle risk. The network(s) as a whole reduce overall risk. Market forces are at work. Pareto and standard distributions are adhered to and optimized.