Page 11 - Himalaya Labs White Paper 3 June
P. 11

The winners of this past decade, centralised digital platforms à la Facebook contribute
            their  own  share  of  societal  maladies.  Network  effects  that  seem  to  be  altruistic  in
            nature at the beginning of a platform‟s lifecycle, start becoming channeled unilaterally
            for the platform owner‟s benefits in later stages. In a bait and switch, the incentives for
            cooperation morph into competition, arbitrary rent seeking and censorship. They align
            incentives  with  those  of  users  at  the  beginning  of  the  life  cycle  before  shifting  the
            equilibrium  and  the  business  strategy  so  that  the  incentives  of  platform-owners  and
            users eventually diverge, and platform users become mere commodities, to be exploited
            for  the  furtherance  of  the  platform  owner‟s  objectives.The  incentives  become
            structurally  misaligned  once  a  critical  mass,  synonymous  with  oligopolistic  power,  is
            attained. Platforms become then no different from the old centralised world, only worse
            now on account of monopoly status.

            Moving  away  from  purely  centralised  to  decentralised  type  of  networks  would  help
            overcome the aforementioned pitfalls of capitalism, pervasive centralisation, and rescue
            national resources from being squandered on financial profligacy.

            That marvel of a technology underpinning bitcoin went mainstream a decade after the
            launch of bitcoin. Today, there is barely a bank in any corner of the world that is not
            besotted with and bewitched by blockchain. Yet, bitcoin is Wall Street betenoir. Not so
            surprisingly  however,  in  their  attempts  to  embrace  blockchain,  the  enlightened
            incumbent  brigade  are  reduced  to  simply  trying  to  automate  the  existing  forms  of
            banking, financial services and capital markets - keeping themselves firmly intact in the
            picture,  rather  than  re-imagining  how  banking‟s  central  function,  value  exchange,
            should  occur  in  an  entirely  automated  and  decentralised  world.  This  reverts  to  the
            classic Clayton Christensen‟s dilemma, where the incumbents are immobilised by forces
            of disruption. A case of verschlimmbessern (where banks are seemingly trying to add
            value to end consumer, but only adding another centralisation layer in the blockchain
            world too). Any number of blockchain innovations by such intermediaries can only fetch
            benefits to themselves (if at all, and if only marginal compared to existing processes),
            and not to the public at large because such solutions are still centralised, and therefore
            maximise vested interests of the centralised entity. Investors and investees alike have
            found  themselves  shortchanged  time  and  again  in  the  pre-bitcoin  era.  The  biggest
            benefits to the public in the post smart-phone era will accrue from embracing Satoshi‟s
            profound gift - decentralisation, which puts us at liberty to dis-intermediate industries
            where middle men are taking away a huge surplus from the society. And there are many
            such industries replete with opacity and over-populated by intermediaries.

            The ICO frenzy in 2017 did see some interesting projects of decentralisation of capital
            markets. Not to mention, totally eroding the position of one intermediary that controls
            capital-  the  VC.  However,  these  startups  eventually  sold  out  to  banks  and  other
            incumbents that have somehow distorted the benefits of blockchain revolution, only to
            suit themselves. The irony could not be starker that even a technology which was born
            to  decentralise  for  the  benefit  of  common  man,  is  being  twisted  by  these  vested
            interests so as to consolidate their position in the global financial system and increase
            centralisation further through alliances, private coteries and consortiums which are but
            a diaphanous veil to the old world, much too centralised.

            The sole aim of Himalaya Capital Exchange is to break away with the status quo in global
            capital  markets  by  giving  the  power  back  to  both  investors  and  investees,  thereby
            improving the allocation of capital, and giving more chances to risk-loving entrepreneurs
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