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To investors,
This weekend it became apparent that centralization is now a significant business risk. We saw specific social media posts taken down, social media accounts banned from multiple platforms, apps removed from the App Store, cloud computing services refuse service to companies, and websites removed from the internet. If I was a conspiracy theorists, I would have a strong argument for an Orwellian view of the world.
Fortunately, I don’t want to waste our time together this morning talking about what happened in the last 3-4 days. You can read that on news websites. I am more interested in thinking through where we go from here. The answer I continue to come back to is quite simple — the world is about to be disrupted by decentralized services.
We will see decentralized websites, decentralized mobile apps, decentralized social networks, and much more. The risk of a centralized organization imposing their will, regardless of the validity of that decision, has become too great to ignore now. It was previously believed that decentralization was only a fascination of those who were paranoid, but now we are seeing that it is becoming a business imperative at a breakneck speed.
This transition won’t happen overnight. It also won’t only be about decentralization. We are likely to see a significant rise in privacy technologies, along with decentralization. These renewed focuses will leverage technology to equalize power on the internet. The days of large centralized companies overseeing their dictatorships without fear of being held accountable are over. The people can’t change the status quo, but they can vote with their feet and start using new technology stacks.
These new decentralized, privacy-centric tech stacks will take time to build. It isn’t about building a new front end. We literally have to rebuild everything at this point. You can’t simply rely on Amazon’s AWS. You have to leverage Amazon, Google, Microsoft, and self-hosting in combination with each other to drastically improve the resiliency of what you’re building. You have to allow for the natural adoption of these new technologies and products, so that they can reach true decentralization.
Any shortcuts that someone takes will jeopardize the very decentralization and privacy that is going to be sought now. Developers and entrepreneurs will have to do the work. Investors will have to fund the work. And users will have to adopt the work.
This mission is too big for any one person. A global shift is underway and it is likely to impact every company, every industry, and every product. Why are people going to use communication products where companies spy on their every word if there is a product that has feature parity, dense network effect, and also happens to be privacy-centric? (Hello, Signal!)
The age of decentralization is here. The age of privacy is here. As I tweeted yesterday:
Those in power don’t realize the significant miscalculation that they just made. I have already had an influx of founders and developers pitching me on the decentralized products they want to build. Most aren’t going to be successful, but a select few have a chance.
Technologists are fed up with the wide ranging use of power being exhibited here. We live in a world where everyone is trying to one up each other with shock and awe. I’ll see your “fascism” and raise you with a “domestic terrorism!” I’ll see your “insurrection” and raise you with a “private companies can do whatever they want!”
That is the thing — private companies can do whatever they want. And they are reminding us of that. But in doing so, they are also reminding millions of people that there can be a better world. A world where no single person or organization gets to dictate what information we receive. No single person or organization gets to choose who gets amplified and who gets silenced. The power of choice was striped from the user and is now being monopolized by the platform creators.
This is not the promise of the internet. The upstarts have thrived enough to now have successfully become “the man.” But as the saying goes, “you either die a hero or live long enough to become the villain.” That is what is happening right now. The beloved tech giants are becoming villains.
This will lead to a rise in new challengers. This is the circle of life in technology. If you can’t influence the status quo, just disrupt it. And I think that is exactly what we need at this point. We can leverage technology to take the power back from these monopolies and allow the user to choose who and what to consume.
Bitcoin has obviously been a decade ahead of this trend. It is decentralized. It is privacy focused. And it allows the user to be in full control without the constant babysitting, and potential censorship, of a centralized overlord. Simply, Bitcoin is so beautifully designed that we have all been underestimating it.
If you’re working on something related to decentralization, privacy technology, or Bitcoin, I would love to talk to you. These are three of my biggest investment focuses for 2021. We will look back over the next few years and see the past few days as a turning point. Technologists are springing into action. I can’t wait to see what they build.
-Pomp
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THE RUNDOWN:
Grayscale Holds Over 3% of Bitcoin, Sees Pension Interest: Grayscale Investments LLC’s new chief executive officer says the world’s largest manager of digital assets expects increased interest from institutional investors such as pension funds and endowments to continue to fuel its rapid growth. The Grayscale Bitcoin Trust has become a bellwether for digital asset investors after accumulating more than 3% of the total supply of the largest cryptocurrency. Read more.
Morgan Stanley Boosts Stake in Bitcoin-Laden MicroStrategy to 10.9%: Morgan Stanley now owns 792,627 shares of MicroStrategy, bringing its total ownership in the company best known for holding over $2 billion in bitcoin to 10.9%, according to a filing made with the U.S. Securities and Exchange Commission. Read more.
White-Knuckle Bitcoin Rally Powers Crypto’s Best Week Since 2017: Cryptocurrencies are on course for their biggest weekly surge since the last bubble in Bitcoin peaked about three years ago, ahead of a spectacular crash. The Bloomberg Galaxy Crypto Index, which includes Bitcoin, Ether and three other digital coins, has rallied about 43% this week, the most since December 2017. Bitcoin jumped to another record on Friday, with prices approaching $42,000. Read more.
Dan Larimer Announces Departure From EOS Builder Block.One: Serial blockchain entrepreneur Dan Larimer has left Block.one, the company that raised $4 billion to build the software behind the EOS blockchain. Larimer, who co-founded the company and had served as its chief technical officer since April 2017, announced the move on Block.one social network Voice.com on Sunday. Read more.
Apple Suspends Parler From App Store, Amazon Kicks It Off Web Hosting Service: Apple has suspended Parler, a conservative social media service, from its App Store, saying the app’s owner hasn’t done enough to deal with threats of violence on the platform. Meanwhile, Amazon dealt the service a potential death blow by kicking it off its web hosting service, citing the same reason, BuzzFeed News reported. Read more.
LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE
Cliff Hudson is a business executive best known for serving as chairman of the board and chief executive officer of Oklahoma City-based Sonic Corp. He also served as a trustee of the Ford Foundation and is a past chairman of the board of the National Trust for Historic Preservation.
In this conversation, Cliff and I discuss:
Scaling businesses
Building a brand
Intellectual curiosity
The value of being a master of none
Why flexibility and adaptation is so important
I really enjoyed this conversation with Cliff. Hopefully you enjoy it too.
LISTEN TO THIS EPISODE OF THE POMP PODCAST HERE
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Decentralization Is A Necessity Now