Monopoly Money: Framing Bitcoin as the last-mover in blockchain – CoinGeek

This post originally appeared on Medium, and we republished with permission from its author Jack Davies.

Competition is for losers. At least that’s the thesis given by Peter Thiel in a particularly eye-opening guest lecture he gave at Stanford University a few years ago. In a little over forty minutes, Thiel paints the landscape of modern industry and commerce as one with a striking dichotomy at is heart: the opposing forces of competition and monopoly.

When most of us think about business in the 21st century, there is a tendency to conjure a scenario of fierce competition in our minds. Enterprises that live and die by the sword of the global markets, in a fervent and ceaseless struggle to win the hard-earned cash of the man on the street. Each new startup enters the fray of battle for a slice of the global economy, battling fiercely to gain market share in increasingly congested sectors, jockeying for a sustainable position amongst a sea of competitors. At least, this is the mental image I usually create when pondering the global marketplace today.

Thiel, on the other hand, offers a reframing of this understanding. Instead, the chief goal of companies, now more than ever, is not to merely compete with its peers, but to blow them out of the water entirely. He argues that the truly successful businesses of the World today are those that are able to create so much value, and capture so much profit, that they gain a ‘last mover advantage’ in their domain.

These are companies akin to Apple, Google, and Tesla, which have brought such significant paradigm-shifts that they have changed the very nature of their sectors. There is a reason that the word ‘Google’ has entered our global vocabulary as a replacement for any and all synonyms for ‘search’. These are the monopolies of the world and this, Thiel argues, is the name of the game.

[…] you want to be the last mover, you want to be the last company in a category. Those are the ones that are really valuable.

Whether this is a good thing for global trade, and wider society for that matter, is an open question and one that is receiving increased scrutiny as every day passes. It is undeniable that even the most monopolistic of companies provide consumers with immense value, but the salient question is: at what cost? Most of us will use numerous Google products many times each day for free, as an essential part of daily life. But in the background, our data is harvested by opaque algorithms and sold to the highest bidder. This is a complex issue in and of itself, and not one I seek to resolve here, but it is important to bear in mind nonetheless.

Instead, I want to explore how the principles of monopoly articulated by Thiel may apply to a very different system: Bitcoin.

Foundations of a monopoly

On my first watching of Thiel’s lecture, I was almost immediately struck by the key characteristics he ascribes to monopolies. This was partly due to the insights themselves, which…