Intel’s disruption, and the problem with every token pitch

In the PC world, Intel had won. The chipmaker dominated production of processors which were the heart of computers, and that position was intimately tied up in Microsoft’s monopoly on the software to run them.
Then phones turned into computers, Apple became the world’s most valuable company, and Intel found itself disrupted. Rumours persist that the iPhone-maker may start to produce Macbooks using processors based on ARM technology, instead of Intel’s. Rivals TSMC and AMD forge ahead at ever lower nanometer scales.
How and why Intel missed the mobile market has long been debated, particularly now it is looking for a new chief executive. Ben Thompson at Statechery had a great take, and a recent riff on that by Steven Sinofsky over at Medium adds to it and prompts a conclusion with relevance to every ICO hawking a token:
So first thing, if innovation is focused on first and foremost being proprietary vs solving problems people have, then I think you’ll always run into trouble.
In an “ecosystem” play this is always a risk. Ppl hate being locked in, especially when it is obviously the intent.
Without going too deep into the relationship between chip architecture and Windows, Intel processors were essential to PC software, but because it also had to licence chip designs to AMD, its business logic was to move in a direction where its manufacturing advantage was preserved. From the Medium post:
In Office, our twice yearly meetings I was presented with things Intel thought would make Office better, but really were just ways to have Office “support” Intel’s proprietary IA extensions
In a sense the conclusion is obvious. Tech is a winner-take-all kind of game, where the aim is to preserve or extend market dominance. Companies and consumers recognise this, so they need a good reason to lock themselves into an ecosystem, and will bolt if given a chance. See, for instance, the trouble Oracle appears to have as customers shift operations to the cloud.
Yet the obviousness of this conclusion appears lost in the fug of ICO hype. The essential pitch of most initial coin offerings is a request for people to lock themselves into a new proprietary network. See Iotas, Eos, Equis, Wallos, Owns, Ton$, just to highlight a few of the moles we’ve whacked.
We’ve often described such propositions as tokens in search of problems, but maybe its better to think of them as would-be monopolists hoping to sell entrapment. One coin to rule them all, etc.
Yet without an immediate and tangible benefit, the self-serving existence of tokens is obvious – please buy this as it will make us rich.
The power of token monopolies also introduces a version of the prisoner’s dilemma, which means trouble for well-meaning attempts to put bits of industries onto blockchains. Whose logistics blockchain?
The value (maybe) comes if everyone will log their tuna catch or shipping container on the same blockchain, but if everyone can see that value and wants a piece of it, then there will be too many competing projects to land on a universal one. As the man says, people hate to be locked in, especially when that is the obvious intent.