tl;dr: when Google promises that a product “works with Nest” and then changes their mind a few years later, customers and companies are left holding the bag. A lesson in ‘platform-risk.’
One of the key talking points for crypto believers is that a decentralized network removes “platform risk.”
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A good example of platform risk comes in this article: Google is a bald-faced IoT liar and its Nest pants are on fire.
Many people bought smart devices for their homes with the idea that they could control all of them via one app. More importantly, many companies built devices to sell on the promise of “Works With Nest.”
Many others do this with the “Works With Alexa” model.
You can easily see the problem.
Now that Google has decided to cancel the program, many consumers are left with a mish-mash of smart home devices that require multiple apps.
Worse, many companies that have invested millions of dollars and employ thousands of people have now lost a part of their value proposition to customers.
The author of the article is right to complain about this from the consumer perspective, but his conclusion is horrifically wrong.
The subtitle reads: “Internet of walled gardens? Go single vendor with your IoT, or else.”
This is exactly what Google wants people to do.
By cutting off the “Works with Nest” program, they are not only stifling competition, but they are also driving consumers to default to Google Nest products alone.
This serves to grow the size of the monopoly, reduce the incentives for innovation, and increase the total amount of data that Google has about each person.
Crypto solves this problem because once a dApp is deployed to a blockchain, no single actor can decide that it may no longer benefit from the resources of that network.
The platform (Google) has risk because one company can change the rules and increase its powers. The platform (crypto) has less risk because one actor cannot change the rules.
I’m becoming ever more convinced that blockchains are not just nice-to-have and cool-t0-have, but must-haves.
The alternative world is actually more frightening.
Google Shows Us What ‘Platform-Risk” is All About was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.