Thread by @jony_levin

1/ Break up big tech was a fringe position. This is no longer true. Why decentralization and incentives matter. A Thread.

2/ In economics, you are taught that monopolies are bad and that competition creates more efficient outcomes. Even the threat of competition can result in similar types of allocations that can improve consumer welfare.

3/ In venture investing in tech companies, we have structured incentives to create natural monopolies. Companies aim for markets where network effects and zero marginal costs create “winner takes all” scenarios and firms do not need to compete in red oceans.

4/ This is solid business advice from Peter Theil. As a startup founder, I obsess over it. In many instances we are still involved in intense competition to keep us all honest.

5/ But other times we see the power of a government combining with the power of a monopoly to produce bad outcomes.

6/ Before you stop reading, I was very concerned about the imminent safety of people (politicians, police and protestors). There are legitimate legal grounds to remove access. But maybe obtained through an injunction as @albertwenger suggested (continuations.com/post/639980341…

7/ Running a business requires having executives make decisions about the ToS and who can use their platform. I don’t believe we will or would want to change that. However, the awareness of the public of the power these corporations yield over the public discourse is changing.

8/ If there were higher degrees of competition, much of the debate on whether these companies are doing the right thing would be mute. Even if there were even higher likelihood of more competition, much of the debate would not occur.

9/ Re-enter the argument to break up big tech and the push towards decentralization.

10/ While many people have suggested breaking up big tech, one part that has never convinced me is the lack of alternatives and the need for the government to enforce seemingly arbitrary rules creating uncertainty and stifling investment and innovation.

11/ But some of the incentives may go the other way. @GavinSBaker argued that the capital allocation may improve if those companies are broken up and may be more valuable For example google might be underinvesting in its search business. podcasts.apple.com/us/podcast/gav…

12/ Blockchain does not have all the answers but it is asking fundamentally the right question. Can we have a more resilient base layer of the internet that is powered by robust incentives that breeds competition and choice?

13/ We have seen centralization in services on top of blockchains but this misses the threat of competition. We are still at the early days and fundamentally blockchain technology reduces switching costs (something we have had to regulate into existence in big tech)

14/ Do people have good examples and case studies of switching costs and competition in crypto? Looking to see how small versions of this are playing out in newer use cases and creating a basis for a more resilient internet with increased competition.

15/ In the meantime, we also need to think about the process of content removal and moderation that may use our existing rule of law at the speed of technology to defend our democracy. This doesn't take a weekend.