Secondly, the natural instinct of this slightly-less-dumb capital is to pick projects with defendable moats. Monopolies make great returns for their backers. Duopolies are okay too. But an active market saturated with great teams doing awesome things is just not worth the bother. Large and vaguely strategic investors act as catalysts, unfairly popularising their own bets, sometimes against better alternatives. In other words, it’s winner-take-all. This makes the industry-wide “open-source” collaboration and technology sharing, which has characterized blockchain innovation so far, that much less likely to continue.
Consider that Silicon Valley startups are not well known for giving away the engineering secrets to their core products. Sure, Apple “open-sourced” Darwin, but it kept the real jewels of OSX for itself. Ditto Facebook. Ditto Google. Companies share what makes strategic sense to share, but that rarely means sharing the really cool stuff. The game becomes increasingly zero-sum. This is already happening to some degree in our space with numerous well-funded and research-heavy startups like StarkWare and Dfinity refusing to open up the important bits of their technology. Some are even apparently considering patents.