Elizabeth Warren wants to break down Amazon — then what?
Can Elizabeth Warren’s battle cry for breaking down Amazon, Facebook and Google save the stifled competition on the Internet?
View this article originally posted on alphawallet.com
To get to the free market, let’s first envision it. Take Amazon and eBook, for example, let’s take a closer look at Amazon. What a free eBook market should look like?
- Any device vendor would be able to sell eReaders which can be used to freely access all eBooks. Readers are not bound by Kindle.
- Any publisher is able to contract any retailer to sell eBooks.
- Any retailer who has access to customers can sell them eBooks, without forwarding them to amazon.com.
- Any server hosting company can stream books (and videos) to readers for a reasonable fee.
Competition happens in all levels: device vendors, publishers, retailers, servers.
Will the destruction of Amazon make that dream come true?
No, it won’t.
The first thing that will happen is the Amazon users will lose the book they bought. Then we have a new arms race for the “network effect”:
Sony has (in my opinion) the best eReader, Digital Paper. They will soon set up a Sony BookStore, modelled after Amazon, to retail books and stream books to Sony eReaders. International Internet giants like Alibaba will try to fill in the gap too. Barnes & Noble, a big book retailer, will join the game from their side, either white-label an eReader or partner with one of them.
All of them has the same gone: use “network effect” to be the new Amazon.
End result: A user still needs to choose from which camp he gets books, based on his preference combination of devices and publishers. The network effect will lead to one camp to rule them all, and here we go, another Amazon is recreated.
The fundamental issue here is Amazon is not a competitor in the market, it is also the steward of the market. It makes sure the chain of operations from the production to the retail, to the consumption of ebooks.
To reinvigorate the market we need to think differently.
We can’t solve problems by using the same kind of thinking we used when we created them. — Albert Einstein
In order for players to compete in their best market: Sony in devices, Alibaba in streaming content from the cloud and Barnes & Noble from retail, you need to give them a market to compete.
The market’s steward, which allows competition, must not be one of them. Governments ain’t good at being the steward of technical pieces. The only way to do so is by blockchain.
This is done through the creation of a new type of token: Book Token, which represents the right to access a book. It goes across three markets. You can buy a book token from Barnes & Noble (or even 7-eleven), authorised by a publisher, then access streamable content from Alibaba, with the device from SONY.
Killing old giants isn’t the way to free the market. Tokenisation is. I wrote a short introduction on this topic, imagining the use of Ethereum as the blockchain to use and our technology TokenScript for achieving interoperability. Download link
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