What if the greatest breakthrough in human history is not some new invention, but merely the elimination of a certain friction? We are often taught to look for the next revolutionary product, yet we frequently overlook those intangible, seemingly dull standards that make the birth of thousands of new products possible.
This is a story about the underlying invisible architecture. It tells that the competition in the future is not about creating better products, but about reaching a consensus on the rules of interconnectedness. This contest has been replayed in every era, and now it is centered around the core operating system of human development: currency.
The most dangerous move is not being technologically behind but accepting a so-called 'modernization' solution that is merely a more exquisitely packaged cage.
The story begins at Gloucester station in England in 1885. A traveler from London to Wales got off here, but her journey was abruptly interrupted. She had to drag her luggage to another station, purchase a new ticket, and switch to a train from another company, simply because the gauge was a few inches wider. Nearby, a merchant's pottery goods were being manually unloaded and reloaded onto another carriage, with damage and delays devouring profits.
This is the daily life of a closed system. The railway network in 19th-century Britain and America was pieced together from countless private lines, with incompatible gauges imposing an invisible tax on the economy. One weekend in 1886, workers in the Southern United States manually adjusted 13,000 miles of track to unify the national standard. By Monday, trains could travel freely from the Atlantic to the Mississippi River. Rail freight volume increased by nearly 20% overnight.
Two days of full sprint have yielded a century of smooth travel. This chaotic yet necessary standardization is not a historical curiosity but the recurring main theme of human progress: closed systems are orderly and profitable, while open systems are chaotic, innovative, and have explosive potential.
Fragmentation is not accidental; it is a business model. The attraction of closed systems lies in control, profit, and speed to market. While it can expand rapidly, its design inevitably concentrates market power in the hands of the builders, fostering the temptation to seize most of the value.
Everyone wants open standards, as long as those standards are controlled by themselves. Whether it's the railway tycoons of the 19th century, tech giants controlling social graphs, or fintech companies designing enterprise blockchain, the pattern is the same. System owners set the rules and capture a disproportionate share of value.
Closed systems cater to humanity's desire for order, where participants are audited and rules are enforced. Open systems trade artificial stability for permissionless innovation. They are filled with uncertainty, fostering both immense new value and significant new risks.
But in exchange for control over short-term profits, essentially, the guarantee of long-term survival—adaptability—was sacrificed. The verdict of history is already clear: systems built for control will ultimately be surpassed by networks that collaborate at the foundational standard and compete at the product level.
Before the 1960s, the mainstream of global trade was 'bulk shipping': countless barrels, bags, and boxes were loaded and unloaded manually. Ports were unique logistical nightmares, with vessels spending more time docked than sailing. Truck driver Malcolm McLean redefined the problem: the key was not the ships or cranes, but the lack of a unified interface.
His solution—a simple, standardized steel shipping container—is an open protocol. It has allowed competition to thrive on new infrastructure. The cost of loading and unloading a ton of goods has dropped by 97%, and global trade has increased more than sevenfold in twenty years. Some argue that this seemingly mundane box has contributed more to globalization than fifty years of trade agreements combined.
The same principle transformed the retail industry in the 1970s. Before the advent of barcodes (Universal Product Codes, UPC), every cash register operation relied on manual handling, and each store was an island. Inventory management was entirely based on guesswork.
Once the system reaches a critical point, this protocol will completely digitize the retail industry. Inventory management becomes a real-time data stream. The fact that this system saves $17 billion annually is just a small part of the story; more importantly, it brings a new clarity to business. Early adopters can see the whole picture for the first time: what products to develop, where to sell, and what the next steps should be.
This reveals a fundamental truth: the best products do not necessarily win; the most vibrant ecosystems do. And the key to building an ecosystem is establishing a common interface.
This leads to two competing paths of success: statutory standards and consensus standards. The first model is implemented top-down by a single power entity. The Roman Empire, facing a world full of friction, created a set of protocols applicable to the entire known world: all roads were built to the same specifications, and a unified currency enabled frictionless commercial flow.
This initial military project ultimately became an economic platform for the entire European continent. Two thousand years later, nighttime satellite images of Europe still clearly show those ancient routes—a physical map recording how coordination has created value across millennia.
The second model is a standard formed from the bottom up, co-created by users and innovators. Two thousand years ago, the Silk Road was its best exemplar. It was never a single road but a network of interwoven trade, an open system.
Precisely because of its openness, no ruler can control it. Kings from various countries attempt to tax it, robbers try to plunder it, and empires attempt to block it. But this network is wiser than any single entity; it can continue to operate simply by avoiding obstacles. The Silk Road is essentially a set of trade agreements, and the unified measurements stem from actual demand. This network transports silk and spices, but its true output is technology, ideas, and culture.
Top-down standards wield immense power but are inevitably accompanied by 'empires'. Bottom-up standards are more resilient, but their formation often requires slow, even painful, decentralization experiments and consensus building. This tension has defined the digital age.
The early computer industry was dominated by proprietary systems. Each machine was an independent 'universe'. Software written for one machine could not run on any other. In 1981, IBM built its personal computer using off-the-shelf components and obtained the core component of the computer from an obscure software startup—this company was Microsoft.
Bill Gates retained the licensing rights to the operating system (MS-DOS) and licensed it to all other manufacturers. IBM inadvertently created one of the most influential open standards of our time: Wintel. This constituted a natural experiment: Apple's closed vertical integration model clashed head-on with the open Wintel ecosystem.
The result is beyond doubt. When Apple controls every aspect of hardware and software, the Wintel standard experiences explosive growth. Dozens of hardware manufacturers compete to create cheaper, faster computers, and developers only need to write a program once to run it on all machines. Within just ten years, the open personal computer platform captured more than 80% of the market share.
The lesson is harsh and absolute: open ecosystems, by driving hardware and software innovation at a faster pace, almost always surpass closed proprietary solutions.
The internet has become the ultimate test of this principle. When the internet was born, established companies bet on 'control'. Proprietary portals like AOL, Apple eWorld, and Microsoft Network built walled gardens, attempting to control the entire user experience and profit from it.
What counters this is not a competing product but a set of open, ownerless rules: TCP/IP and HTTP protocols. This is not a fair contest at all. Open protocols, like the Silk Road, easily bypass empires and their walls. Why is this? Because you cannot control the future. Innovation without permission built on open standards can always create exponentially growing value.
The result was one of the largest expansions of productivity in human history: in the United States alone, the internet released over $21 trillion in value and boosted the GDP growth of developed economies by 21% in just five years.
However, the most influential victories are often the most unexpected. When the Linux system first emerged, industry experts dismissed it as a 'toy'. It was less refined than the Windows system and not an enterprise-level product. But these criticisms completely missed the point. The power of Linux lies not in the functionality of its first version but in its entirely new open architecture.
Today, this 'toy' with a penguin mascot runs 90% of the world's cloud servers and all of the top 500 supercomputers globally, creating an estimated value of $8.8 trillion. This open standard has become so powerful that even its biggest rival—Microsoft, which once openly called it a 'cancer'—has been forced to embrace it. The power of open standards has become too strong to resist.
Today, our financial system is akin to the railway network of the 19th century. It is a fragmented pattern made up of countless closed, proprietary networks. A few institutions control the 'toll booths' of daily payments, and every swipe, scan, or wire transfer effectively imposes a substantial 'private tax' on the economy.
This friction silently erodes corporate profits through layers of transaction fees. In 2024 alone, the total merchant fees exceeded $187 billion, all perfectly masked by consumer reward programs. All of us still stand on the platform of Gloucester station, paying an invisible tax for our pursuits.
People have attempted to solve this. In the 1960s, the credit card industry faced collaboration failures. When American banks attempted to unilaterally expand their credit card networks, losses soared. The turning point came when Dee Hock realized that no single bank could monopolize this standard. Thus, they established the cooperative organization Visa, with a simple principle: cooperate at the infrastructure level and compete at the product level.
In recent years, India has created a public open protocol called the Unified Payments Interface. By building a neutral, shared digital payment infrastructure, India has reduced transaction costs to nearly zero. Within just a few years, the monthly transaction volume of UPI has grown to 18 billion transactions, capturing nearly 50% of the global real-time transaction share. Once payments became a mature, shared underlying facility, entrepreneurs were able to build higher quality credit, lending, and business applications on it.
These models led by industry alliances or public sectors are the modern continuations of credit card networks and ancient Roman roads—belonging to standards implemented from the top down. But permissionless blockchain networks and cryptocurrencies have brought about a third possibility: the Silk Road model.
This is a value network that is neither corporate nor cooperative, and not even owned by a single sovereign state; it is a neutral, spontaneously formed open protocol belonging to the currency itself. To describe its potential impact, the best analogy is the global positioning system.
GPS was initially a closed, top-secret tool developed by the U.S. military, with the sole purpose of gaining strategic advantage and control. In the 1980s, the U.S. government made a world-changing decision: to make GPS signals free for everyone. They effectively bestowed a 'superpower' upon all of humanity, unaware of the energy it would unleash.
They could not foresee the emergence of Google Maps, Uber, or precision agriculture, nor did they need to. No one needs to apply for permission, and no one needs to launch satellites; the underlying infrastructure simply exists—a set of open, public positioning protocols. This is the true gift: the freedom to create.
A whole generation of entrepreneurs built new industries on this infrastructure, focusing on creating value rather than wasting time coordinating infrastructure development or seeking authorization from established companies. Open financial infrastructure will also play this role.
Its mission is to provide an open, neutral underlying foundation like GPS signals, allowing everyone to become an architect. It grants you the freedom to create and the freedom to compete at the product level, rather than wasting time repeatedly building underlying infrastructure.
But this is not the future that established institutions want to promote. They tell a beautiful story about 'enterprise blockchain', calling it cutting-edge technology, a solution tailored for payments. But enterprise blockchain is not the future; it is merely a higher wall, a gilded cage wrapped in cooperative incentives.
This is a system based on their infrastructure and following their rules, where you can never have root access; you are merely a tenant, not an architect. Choosing this wall, choosing the 'enterprise blockchain' model means accepting that silent friction that drags progress into stagnation, and accepting the taxes imposed on the present for the future.
Behind this is a massive opportunity cost, a senseless waste of human potential. This is the choice we face, identical to the choices faced by the railway tycoons, shipping magnates, and internet architects of the past.
We can continue to create incompatible gauges, profiting from mutually exclusive moats; or we can make the arduous but necessary effort to reach a collaborative consensus. The lessons of economics have long been clear: the value released by a truly open network will always far exceed the profits seized by a closed system.
Ultimately, the question is simple: do we want to build higher walls or create wider roads? History will only remember one of these choices. It will remember those who built the roads.
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