Last week, the price of bitcoin soared above $20,000 each, and its market cap — which is the total value of all Bitcoins — gained $400 billion.
Tesla’s market cap, meanwhile, has not risen above US$400 billion, falling below that level nearly a month after Bitcoin’s November hit. Tesla’s stock price has fallen 70 percent from its peak and continues to fall to a two-year low.
Apparently, in one of those strange twists of fate, the combined values of both Tesla and Bitcoin hit $1.2 trillion per month in late 2021.
Are the fates of these two things connected by chance really connected?
In a way they are. Let me explain why.
Tesla’s stock price fell last year after its founder and CEO, billionaire Elon Musk, decided to buy Twitter and has since avoided it, to put it mildly. His fellow Tesla shareholders are forced to distract.
Musk’s acquisition and destruction of Twitter is the latest and most egregious example of how the free and open internet has been bought by billionaires.
Twitter and Bitcoin both started out as projects meant to improve civilization, but for each of them, something was lost along the way.
Bitcoin is the main manifestation of blockchain, a 14-year-old invention that allows people to transact directly with each other and theoretically cut out banks. It exists everywhere and nowhere, is controlled and owned by no one, and represents a kind of renewal of the original idea of the Internet, which was to democratize knowledge and therefore power.
But Bitcoin has also become an object of financial speculation, which has distracted everyone from its original purpose and the purpose of the blockchain for which it exists – to democratize money and transactions.
So the fact that it’s now a few bubbles and busts has angered speculators and taunted audiences, confidently predicting that it will explode and disappear. But the truth is that Bitcoin cannot be killed and now the price is rising again. No one knows where it will stop, but it will never be zero.
Meanwhile, Twitter has lost money in nearly every year of its 16-year existence, but its founder Jack Dorsey’s original motivation was largely altruistic. It has been a very useful product, but a terrible investment.
Last year, Dorsey tweeted: “Twitter is funding a small independent team of up to five open source architects, engineers and designers to develop an open and decentralized standard for social media. The goal is for Twitter to ultimately be a customer of this standard.”
Musk paid for it.
Twitter is the only borderless, truly global communication tool used by nearly 400 million people and organizations (and bots). Reporting by the World Health Organization and other official bodies was critical during the pandemic.
Dorsey called it “the public conversation layer of the internet”; Musk called it a “digital town square.”
But this is not a “public” but a private asset, and now its new owner is trying to make it profitable at all costs. It doesn’t work any better because it has fired half the staff and users are fleeing.
Right now, it seems like the only way for Twitter to survive — and, by the way, for Tesla to recover — is for Musk to give up and focus on making electric cars and spaceships.
From altruism to profit margin
Google and Facebook also started life as open source platforms with application programming interfaces (APIs) available to everyone, but the desire to get rich got the better of their owners, so they gradually locked them down and ate their competitors.
The network effect used by these companies, as well as Amazon, Apple, and Microsoft—value grows exponentially with the number of users and creates natural monopolies—has created so much wealth that a new goldmine has emerged from the Internet (although there is less wealth now). After a 40-60 percent drop in share prices last year).
As in the previous Gilded Age (1877-1900), these men became billionaires thanks to taxpayer-funded technologies: All the early work that led to the Internet was paid for by the US government.
And now we have Internet billionaires who want to make more billions.
Except… absolutely not. For starters, there’s blockchain. Admittedly, the ASX tried and failed to use it for share settlements, and the four Bitcoin bubbles and crashes didn’t help its credibility.
But it’s early days. Internet protocols were invented around 1971, but Tim Berners-Lee didn’t create the World Wide Web until 1991, and things took off 35 years later, when Web 2.0 emerged after the dot.com crash in 2000. the internet was born. Blockchain has been around for less than half that time.
After all, Wikipedia is the largest collection of knowledge ever compiled and the most important creation of the internet – and it’s free, edited by volunteers, and owned by a non-profit organization.
There’s also WordPress, the open-source content management software that powers about 40 percent of the web. GitHub and npm are both similar open source software tools, although they were acquired by Microsoft.
Most importantly, there is a set of protocols – TCP/IP, HTTP, FTP, RSS – that the internet itself will never (hopefully) own and is protected by an American non-profit organization called ICANN.
Adjustment is required
The Australian Competition and Consumer Commission (ACCC) made a landmark case globally on the power of digital platforms in its 2019 final report: “There is a lack of serious reflection on the effects and consequences of digital platforms’ business models. for competition, consumers and society”.
And: “The ubiquity of the Google and Facebook platforms has put them in a privileged position. They act as a gateway to reach Australian consumers and in many cases are critical and indispensable partners for many Australian businesses.
But the end result of the ACCC’s case was simply that Google and Facebook paid the publishers they infringed. They are simply doing what rich lobbyists always do – get political approval.
It’s too late to nationalize Google, Facebook and Twitter – it would cost $2.6 trillion more than Australia’s GDP, even though they’re $2 trillion cheaper now than they were 18 months ago.
But governments should be more involved in their regulation.
We are talking about some of the most important infrastructures in our life like roads, water and electricity.
They should be treated like they are, not just left to billionaires.
Writing for Alan Kohler New Diary twice a week. He is also the founder The Eureka Report and ABC news finance anchor