The new crypto debate: Monolithic distribution vs. modular tech
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This is a segment from The Breakdown newsletter. To read full editions, subscribe. “Which is the bigger number? Five or one?” — Robert Baratheon, Game of Thrones Distribution matters in business. Often more than the thing being distributed. Google, for example, always had the best algorithms for searching the internet, but the now-ubiquitous service didn’t catch on until Larry Page and Sergey Brin figured out how to get it widely distributed. As recounted in an Acquired podcast released yesterday, Google’s co-founders bet the company by guaranteeing AOL $100 million it didn’t have in exchange for the right to show ads to AOL’s users. (Yes, I listen to three-hour Acquired podcasts the first day they drop. What of it?) They also aggressively pursued revenue-sharing agreements, sometimes paying websites more than 100% of the ad revenue they generated (because Page and Brin recognized the long-term value of expanding their distribution). But Google’s real coup was the “toolbar” that it paid PC makers and software providers to bundle with their products. This expanded Google’s distribution far beyond the early web-adopters who knew to go straight to the Google.com homepage for the best search algorithm. This was critical because web search is a bizarro business in which the law of supply and demand is flipped on its head — the more ads Google sold, the more it could charge for them. This unique dynamic of “increasing returns to scale” (as the Acquired co-hosts call it) made web search a winner-takes-all market. It also ensured that whoever got the most users first would win that market, however good or bad their tech was. We might soon learn if the same applies in crypto. When one is the greatest number Robinhood does not have the best tech in crypto — not yet, at least. After announcing its…
Filed under: News - @ July 1, 2025 10:33 pm