New to ancap ideology, curious to know more.
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I dont think Bitcoins a bad example, and heres why: the network effect. In economics, a network effect is the phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products. Network effects are typically positive, resulting in a given user deriving more value from a product as other users join the same network. In other words, if you have dollars in your pocket, and I have dollars in my pocket, we're more likely to exchange dollars. Crypto currency is a utility, so the network effect applies, as more people use Bitcoin, its easier to exchange Bitcoin.
The original point of using Bitcoin as an example, is to state that even in unregulated markets, theres a central tendency to conglomerate utilitarian resources towards a few (many times one) option(s), rather than spreading all investment on every single crypto currency on the market. People simply dont behave like that, and it shows in terms of market share. The fact that it happens, even without human intention/intervention, shows that the market behaves that way naturally. Monopolies and oligopolies can occur in a completely unregulated market.
It's definitely an example of market preference, but Bitcoin doesn't have a monopoly even if it has market dominance. The two are not synonymous. And even then, its dominance is a feature of its appreciative value the way gold might be preferential asset over other metals, not because of the market's preference for Bitcoin's utility (or lack thereof) which is outmatched by other cryptocurrencies. That lapse in utility is also becoming magnified in the current day. Bitcoin's reign is unlikely to be everlasting as a result, nevermind the one-true-coin believers.
Yes, which is exactly why I ask about when does market preference become a monopoly if driven by human desire to be dominant? Is it merely human intention that causes a market prefernce to evolve into a monopoly, if given enough time and lack of government oversight, or is there an example of market competition eliminating all possible monopolies from ever forming? Can you maybe elucidate how the development of Standard Oils monopoly could have been prevented without government intervention?
There are cases of monopolies that are the result of a single competitor being so efficient, cost attractive and capable of serving its market that it becomes a "natural monopoly" for whatever period it can sustain that. It's the one type of monopoly that isn't viewed dourly because it tends to represent the best possible result for both sides of the equation.
Standard Oil's monopoly, and its inability to maintain it (and why), is described by David Friedman in the Machinery of Freedom. While I can't really do the response real credit here, the simple answer is that it works quite the opposite to what you imply -- without government intervention, Standard Oil couldn't keep competition from breaking their hold. But with intervention, monopolies are more easily captured and maintained.
You can find some of Freidman's answer here (PDF, see the end of page 21 and a few beyond as well as other parts that speak to Standard Oil and more specifically to Rockefeller's unsuccessful strategies.) In all, it's an EXCELLENT read if you're really interested in how free markets topple rather than uphold monopolies and oligopolies.
Thanks for the source! I'll take a look later.