Half-formed idea thing: blockchain style decentralization as a third 'state' in the law of conservation of attractive profits.

Epistemic status: no basis for this whatsoever, just processing a random thought.

The law focuses on two states for a given part of a value chain: integration and modularity.

Integration is what's needed to make a hard process possible, because it allows a company to control all of the aspects of production.

Modularity is what's needed to make a mature process cheaper and more efficient. In a modularized part of the value chain, many firms can compete to produce a given component according the specification (i.e. interface) of the next level of the value chain.

Importantly, modularity is only feasible when the value chain is mature enough and the relevant interfaces/specifications can develop. But as modularity becomes possible, it displaces integration in that part of the value chain. (see chart at the start of this thread)

Modular architectures also become possible when vertical integration 'overshoots,' that is, the vertically integrated product is much better than what customers actually need, so a cheaper, less optimized, modular architecture takes over, meets customer needs at lower price

NOW: what if there's another architecture, which is 'Decentralized'? Think of Ethereum blockchain, which let's say decentralizes compute. (I know over-simplified...). Let's model Ethereum is basically a really slow, shitty computer, but with some very specifc benefits

The thing is, you'd only use that really slow computer for compute tasks that are EXTREMELY over-served, even by a modular architecture.

Will have to think if this idea applies here or not...and think through implications for what it predicts about profits in value chain...END