I’m writing this primer because I want more people to understand the ideas at play and to feel empowered to wield these ideas, wield the related technologies, and imagine possible futures -- both promising and frightening -- around them.
During the initial ascendancy of Facebook, Twitter, Instagram and other social media there was a lot of talk about network effects. [TODO: check historical patterns of people using “network effects” “viral content”, “social network”, “walled garden”, etc]. Venture Capital firms like USV began to speak of their investment strategies in terms of harnessing networks. All of this happened in a context that assumed enclosure -- people spoke of networks as closed, privately operated systems that compete with each other to gain users and maximize those users engagement with your network. From a business perspective, there was a race toward monopoly, or near-monopoly.
The winners of this race to harness network effects became the five biggest corporations on the planet. Apple, Microsoft, Amazon, Google, and Facebook. Each of them took a different approach to harnessing the power of networks, but this basic activity of creating, capturing and harnessing networks has played a central role in all of their business models. Beyond these behemoths, contemporary industries are increasingly dominated by actors who have mastered the power of networks, and the pattern extends beyond industry. Politics and popular culture have also become dominated by players who wield the power of networks effectively.
The race to capture users within closed networks, as exhibited by companies like Facebook, Apple, etc lies in stark contrast to the open, sprawling nature of the worldwide web that emerged in the 1990s. That older version of the web is sprawling and nebulous. Its edges are unclear and constantly in flux, and it's operated by countless entities spread across the globe. Early designers of the www emphasized the idea that it was permissionless [todo: who coined term “permissionless”/ When?] -- anyone could run a web server, adding their own extensions to the ever-evolving network of web servers, web pages and information on the network. By design, capturing and enclosing the entire web was unachievable because anyone, at any time, can add their own pieces, on their own terms, without anyone’s permission. The only remaining barriers to participation as peers on the web were knowledge of how to operate a web server, sufficient capital to operate a machine with a network connection, and imagination.
If there’s a superpower evolving here, it’s more than the power of creating networks. It also involves manipulating those networks to incentivize behavior. Currently this field is immature but evolving quickly. Very few people understand how to wield the existing tools and techniques. Even fewer have the means to wield them. Meanwhile, nobody fully knows where this is going, what these technologies will look like, or how they will shape society and the economy over the coming decades. All we know is that they are extremely powerful. The rest will be dictated by the people who wield that power.
NETWORKS and INCENTIVES: [Economics, Game Theory, Game mechanics, Token-incentivized networks, etc] It’s not sufficient to merely speak of networks. In order to understand what’s going on, we need to look at the combination of networks with incentives. These two things have been combined in myriad ways which are constantly evolving.
NETWORKS and BEHAVIOR: [Sociology, Psychology, Behavioral Economics, Rhetoric (persuasion)]
LEVERS of POWER and VIRAL IDEAS: [Epidemiology] Critical Mass, Tipping Point, etc.
HISTORY: The sister threads of Communication and Computing This contrast between closed, captive networks and open, permissionless networks lies within a much longer history of computing and even longer history of communication.
HISTORY :: COMMUNICATION Printing Press, Journals, Newspapers, Telegram, Radio, Telephone, Television ... Internet
HISTORY :: COMPUTING Ada Lovelace, Leibniz, Turing & Von Neumann, Transistors, Mainframes, PCs, Mobile
HISTORY of the INTERNET: The Cycle of Centralization and Decentralization -- Contrast the cycle of centralization and decentralization from linear trend toward centralization of other comms technologies (Radio, Telephone (pre-VoIP), Television, etc)
ECONOMICS: Vertical Integration, Firms, Transaction Boundaries, Monopolies and Antitrust Regulation
When we look at this from the perspective of economics, we can see this emergence of closed networks as an example of vertical integration -- an inevitable activity where firms ... healthy activity ... taken to an extreme you get monopolies. This is why 20th century governments created antitrust legislation.
To generate the html, pdf, mobi , and epub, run ./build-book.sh This will put all the results into _book