It’s called letting go. What the Internet knows, and what big pre-Internet concerns do not, is that unless you are a certifiable genius, trying to guess what people want is a really bad way of giving it to them. Hollywood, as William Goldman said, is a place where nobody knows anything. Turns out that that’s true of most things. People are ungrateful sots who persist on deciding for themselves what they like. The best way to make that work for an idea is to put it out there and see what use is made of it – and to make sure that anyone can say “Hm, yes… but what if we try it this way?”
By the 4 Horsemen, I am talking about Google, Apple, Facebook, and Amazon. Right now there is a battle for the electronic payments industry. The incumbents of the industry have dominated it for years and with advancements in technology and the proliferation of smart phones, the landscape for this industry is in transition. All of Horsemen with the exception of maybe Amazon have announced or have been rumored to be creating their own ‘currency’ or payment system.
Perhaps, but the history of rational choices rather than futile attempts to “capture” or “dominate” a market by becoming the defacto proprietary choice and extort rents like Microsoft did isn’t good.
It is just too easy to go it alone and the returns would be, but never are, extraordinary.
Despite being “Internet native,” I don’t see any of these four being the one to be unconventionally wrong (or right) by choosing a novel technology designed for the Internet like Bitcoin.
Summers and DeLong glimpsed that as marginal costs approach zero, “the competitive paradigm cannot be fully appropriate” for organising commercial life, but admitted “we do not yet know what the right replacement paradigm will be”. Now we know. A new economic paradigm – the collaborative commons – has leaped onto the world stage as a powerful challenger to the capitalist market.
A growing legion of prosumers is producing and sharing information, not only knowledge, news and entertainment, but also renewable energy, 3D printed products and online college courses at near-zero marginal cost on the collaborative commons. They are even sharing cars, homes, clothes and tools, entirely bypassing the conventional capitalist market.
Economics, it must be true…
As is the case with many people in our industry, I’ve been giving a lot of thought recently to Bitcoin. When ever I run into something new, or puzzling, I try to find comparisons to help me understand it.
But I think one of the more intriguing angles is to compare it to the introduction of the printing press. (And no, I’m not talking about people printing money!) The printing press freed the written word from the control of the clergy, and let the masses have direct access to books, to the Bible, to politicians’ screeds. Bitcoin has the potential to free money from the control of bankers, central and otherwise. I think that is staggering. I’m not entirely sure it is a good thing: after all, in my heart I’m still a banker. But if allowed to develop, it certainly would be a big thing.
Wences Casares said on WSJ Digits yesterday that he thought the value of one Bitcoin might reach a million (or a half million) dollars by the end of the decade. I sure hope so: I own one. I may just revise my retirement plan.- See more at: http://paymentsviews.com/2014/04/07/bitcoin-is-like/#sthash.c1K5NUxS.dpuf
The security of a data connection protected using a flawed U.S. encryption standard promoted by the National Security Agency could be broken in under 16 seconds using a single computer processor. That’s according to the first in-depth study of how easily encryption systems that use the now deprecated Dual_EC random number generator could be defeated by an attacker that had “backdoored” the standard.
The flawed standard has never been widely used to protect Internet communications, even though the security company RSA got $10 million from the NSA to make it the default random number generator in one of its software packages. It is not known whether the NSA or anyone else knows the crucial mathematical relationship needed to exploit the flaw and undo encryption based on Dual_EC.
The software solution typically uses a QR code, which provides authentication, where a user identifies anonymously rather than providing a user ID and password. This method is thought to be impervious to a brute forcepassword attack or data breach. It shifts the burden of security away from the party requesting the authentication and closer to the operating system implementation of what is possible on the hardware, as well as to the user.
Hopefully Bitcoin key pairs could be used for this…
These new economies of unscale will be good for job growth, because they open up thousands of new market niches for exploitation. By buying specialized services, in customized form and at modest cost, companies can create unique products, find buyers from across the world, and secure profits. It doesn’t matter if a designer wants to build polka dot bird feeders — there is a hyper-niche market they can tap, using platforms like Etsy to sell it across the world. To succeed though, we first have to unlearn what we have been taught about business: We have to think in an unscaled mindset, where the emphasis is on a greater number of specialized products sold to customers who know exactly what they need. How we train our students for this world will be critical to securing their future employment.
And the new diseconomies of scale. Co-ordination costs, which the firm was formed to reduce, only works against a poorly communicating market. That we no longer have.