But what do banks and companies like Facebook, eBay, Twitter LinkedIn and Pinterest have in common?
They are all just middle men for people to interact.
The problem for them now is that we no longer need their centralised model to interact. Now we have blockchains to handle trusted interactions.
The Death Of Social Media As We Know It
But the blockchain model that Satoshi invented isn't just useful here, it can disintermediate a whole host of systems, DNS and SSL certificates for example, and even now we are seeing the seeds of systems which can facilitate other interactions where the centralised party really isn't providing any value over and above being a hub for that interaction:
BitMessage is a peer to peer trustless and completely decentralised secure messaging system which allows direct messages and broadcast/subscriptions (SMS, iMessage, WhatsApp, Potentially Twitter, Facebook, LinkedIn and many others)
Twister is a platform for peer to peer microblogging (Twitter)
OpenBazaar is a decentralized trading platform for people to sell anything to anyone (eBay)
NXT has its distributed asset exchange again allowing anyone to exchange anything.
User Base Momentum Won't Save Them
In terms of competition, these platforms are in their infancy. They may not work as well as the centralised platforms right now or they might be too difficult to use. The software might not be good enough yet and these individual instances may even die out altogether but out of an entire world of developers there are plenty of developers that like the idea of Facebook/Twitter/LinkedIn without centralised control that they will work on something better. Over time the trend will be that the decentralised versions will only improve.
Similarly the idea that eBay or any other has development resource that is constantly improving their product and adding value each day misses the point where the real value of eBays offering is - in letting people interact easily to sell goods to each other in the first place. Facebook might add to their software every day but are they really adding a lot of user value? or are they just adding a bit more icing on the cake of user-to-user interaction (that and more ad code that benefits them)?
Lastly the idea that Facebook has so many users they have an unchallengeable monopoly and unstoppable momentum is an attractive one but it too won't hold up over time. Like Steve Jobs said of one of Microsoft's key strengths in the well worth watching Lost Interview, "They just keep on coming".
Microsoft is demonstrating this ability right now with Windows Phone. Windows Phone for any other company, regardless of how good or bad the software is, would be an abject failure and would already have been shut down - purely because it just doesn't have nearly enough user base to sustain itself. But Microsoft has deep enough pockets to keep funding it. It doesn't seem likely that it will pan out since Windows Phone doesn't appear to offer much over iOS or Android (so users don't have much incentive to switch) and even Microsoft can't sustain that kind of spend forever.
Open source decentralised software though doesn't have those same costs. It's software not hardware so there are no production costs and essentially no ongoing costs. It can just sit there for years being gradually improved and be picked up at any point by anyone that wants to use it.
Further, in all these cases it has the ability to offer a major plus over *any* centralised alternative, which will provide the incentive for people to switch over time - the removal of the central authority itself.
Facebook might provide a great service, but the ability to do Facebook (the app) without having to deal with Facebook (the company) will always be preferable. The company fundamentally has conflicted interests - its trying to facilitate its users interacting but at the same time its trying to make money off its users so it has to constantly push against their privacy and apply restrictions to force people to pay for distribution. They have to hobble their own system to make it necessary to pay them to send promotions to your own followers.
Similarly eBay might also provide a great service for users to sell things to each other but again they have to get in the way and create pain points to get money from somewhere. They charge fees for listing, additional photos and various other add-ons.
A decentralised version doesn't have to provide these same pain points because there is no central intermediary trying to get paid for providing the service.
Saving Graces - Adding Value
YouTube is a centralised service that merely lets users interact to publish videos. If you take Google out of the equation you are arguably a lot better off - no need to use your real name to post videos, no ads, no restrictions. But if you take Google out of the picture you also lose something - very large scale bandwidth.
Peer to peer networks work well but when you upload a video to YouTube it sits on a storage system which is peered around the world to make it very easy and fast to download immediately without any (slow) propagation between users (seeding).
This is an example of a central intermediary not just acting as a hub but offering added value, whether its enough to save YouTube or whether a decentralised version can figure out a way around is another question.
Facebook, eBay, Twitter and others are large companies with a lot of resources so it could be that they can figure out some way to add real value to fend off a decentralised clone, at least temporarily, but they also bring with them significant negative points that they can't do anything about. Over the long term, and thanks to Satoshi, their prospects don't look good.