I understand this is conventional wisdom but what is the mechanism to actually abuse the market?
As long as a new company can come and compete, I don't see how any abuse can be sustained
Discussion
Thats the thing imo, there is no actual competition due to the abuse of the market through the monopoly’s price fixing, threats, and intimidation of smaller competitors. The monopoly will inevitably die but for the same reason why all Empires eventually die, it is due more to self-inflicted wounds than to a rising competitor.
Monopoly doesn’t happen because of organic free market competition. I don’t believe you can obtain and keep a monopoly position without price fixing, intimidation, and violence in many cases. I can’t think of an example where the monopoly power didn’t do any of those things. Most monopolies are state sponsored also and would not exist if it wasn’t for the state sponsorship.
As I understand it, whomever holds a monopoly can artificially lower prices (operating at break-even, or even a loss) in order drive out new competitors who can't afford to sell that low.
In a hyperbcoinized future, MicroStrategy could offer it's services for free by drawing from its practically bottomless treasury. After the competition has been driven out of the market, prices can return to normal, or higher, to recover the losses.
Microstrategy is bringing the imbalance of the fiat world into the future bitcoin world.
MSTR are counting on an economy where derivatives of bitcoin will be used like bitcoin, so that they can loan it out without selling it. Probably also explains Saylor's partiality towards the dollar and lack of interest in layer 2's like lightning.
But an advanced economy using hard money has much less need for debt, as saving becomes an effective strategy once again for building businesses and wealth.
The practice of burning bitcoin to establish a monopoly may work for a while, but will ultimately fail in a hard money world.