Now centralized trust is shifting to a shared infrastructure with distributed trust. Distributed trust technologies displace middlemen in transactions, and make us question the role of centralized organizations. Instead of trusting central organizations, people place their trust in the technology itself. Centralized trust is shifting to a shared infrastructure with distributed trust... Instead of trusting central organizations, people place their trust in the technology itself. The previous disruptors are being disrupted themselves. Facebook’s libra partners (including Uber, ebay, Paypal, Spotify, Visa, and Mastercard) read like a Who’s Who of middlemen organizations that are being threatened with disruption by distributed trust. OLD DOGS Organizational theory shows that when market conditions change drastically, organizational inertia can give an advantage to new companies or institutions. Old dogs have a hard time learning new tricks. So it’s no surprise that libra is entering the space with a “permissioned” model of trust. Such models centralize decision power with a select few — the initial libra partners. They are not truly distributed trust models. They are closer to the distributed production models so familiar to major dominant
by new organizations designed for this new content production model. In 1994, a New York Times piece suggested “... it makes more economic sense to forget Compuserve and get an Internet account, where mail is free.” This eventually led to the growth of many modern-day platform companies such as Facebook (created in 2003) and Uber (founded in 2009). Such organizations became dominant, powerful companies very quickly, disrupting every major industry. SILICON VALLEY MODEL The transition to the Information Age created new distributed business models. Modern platform organizations operate with a business model focused on dominating a central, powerful matchmaking role. The Facebook platform matches advertisers with eyeballs, for example. The Uber model matches riders with drivers. The power of critical mass and the legitimacy of enabling trusted transactions are two keys to the success of platforms. And so the venture capital funding model focuses on building rapid, sustainable growth of these trusted middlemen. Much of the modern Silicon Valley success story is built around this simple logic. This evolutionary process parallels the recent emergence of what are known as distributed trust technologies such as blockchain. The public internet shifted from central control to a shared infrastructure with distributed production.
American Consequences
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