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As cryptocurrency continues to perplex traditional investors, it has served as an antithesis to the efficient market hypothesis, http://cepr.net/blogs/beat-the-press/bitcoin-efficient-markets-and-efficient-financial-sectors, which has been central to much of economic theory over the past century. In this hypothesis, it is stated that markets will direct capital to the best possible uses. The application of this is that government interventions will cause less efficient allocation of capital and slow economic growth.
With no clear-cut use case as of yet the evaluation of most of the currencies is little more than speculation. Although it is built off of some technology which shows promise as a revolutionary new development in the world of technology at this point the fact of the matter is that with a valuation of more than $300 billion this is nothing more than an indication of a very inefficient market.
In theory, the purpose of the financial sector is the allocation of capital, and while these are essential for the functioning and operation of an economy, they have no direct benefits for people in comparison to traditional industries such as healthcare education or housing.
As the peak of the dough currency market capitalization hits over $800 billion the narrative of the financial market following the efficient market hypothesis has been turned on its head. However, due to some of the innovations claimed to be possible by cryptocurrencies it begs to consider that maybe there is more at play here. It has yet to be seen just how the blockchain technology will impact the rest of the world. There are definite benefits to the use of a network which is in fungible decentralized and without borders however in comparison to other traditional industries have a very concrete source of value it still begs to consider where precisely this vast sum of money is coming from.
At the end of the day, it is impossible for us to know whether this is merely a level or if it is indicative of a significant shift in the global paradigm as far as the rules which surround monetary supply and financial governance. In other words, it may be of worth to pay attention to the rise of the currency as their role continues to expand in the global world of finance.
Shervin Pishevar decided to take his Twitter followers by surprise one day by sending out 50 tweets, all numbered, within the span of 21 hours. In this time, he called out five monopolies in the United States: Apple, Alphabet, Amazon, Microsoft, and Facebook. These are the biggest, most powerful companies and the investor explains why we should be worried.
They’re Too Powerful
Shervin Pishevar explains that these five monopolies have too much power. There are more powerful than Ma Bell ever was, and that telephone companies still lives on in history as being a dangerous monopoly for the United States. Consider how much information Amazon, Facebook, and the other monopolies have on us. They have more data and more access to data than even sovereigns have.
They are growing in power, too. The government doesn’t want to take them down. Further, there are cities across the United States crying out to receive Amazon warehouses.
They Don’t Have Competitors
If you take a look, there are no competitors for any of the monopolies, not really. As Shervin Pishevar points out, the monopolies are buying up all of these startups before they have a chance to become competition. He refers to them as silent assassinations. Although startups are constantly entering the marketplace, they are bought before they have a chance to do anything exciting. Entrepreneurs make the mistake that they are getting a great deal because they are being paid for their innovation. However, they are handing their innovation to the enemy.
What will happen?
If the government doesn’t intervene to take the monopolies down soon, they will continue to grow in size. Shervin Pishevar identifies that it would be best for consumers if there is more competition. He makes the comparison to Ma Bell once again.
It’s possible that there may not be another impressive startup like Uber or Airbnb for at least 10 years unless these monopolies are taken down. Although Shervin Pishevar doesn’t have suggestions on how to take them down, he is identifying the problem so that more people are aware.
It is a bold move from Facebook, but they have decided to forego any money they might have been able to generate from advertisements that promote Bitcoin or any other types of cryptocurrencies.
Facebook says that they are doing this to avoid promoting anything to their audience of users that comes from companies that “often promote deceptive or misleading information” says CNBC. In other words, they do not believe that the companies hocking cryptocurrencies are being honest enough in their advertising to deserve a spot with Facebook.
The ban goes beyond simply nixing Bitcoin advertisements. Ads for things like binary options are also going to be thrown out the window. In other words, industries that Facebook has deemed as being misleading are not going to advertise with them. That is unfortunate in some ways because it does discriminate even against those who run legitimate operations in the cryptocurrency and binary options fields. Still, it is true that there are a lot of less than reputable players who want to lure people into their schemes as well. Facebook seems to want to protect against that.
It is important to Facebook that they keep the policy as broad as possible. That is because they want to have latitude to narrow it down as time goes on. They want to keep their options open when it comes to eliminating ads.
You have to bare in mind that Facebook and other social media outlets have been under pressure since the 2016 election cycle for allowing ads that are traced back to Russians to be on their site. Some say that those advertisements passed along false information, and that information may have influenced the election. The social media networks deny that this is the case, but they have admitted that such ads did appear on their site at times.
With that kind of pressure on their backs, Facebook has already felt enough heat to want to stay far away from controversy for quite a while. They have a broad policy now so that they can eliminate any problems before they become real issues for them.