| This author is essentially arguing that the security of his garden shed is equivalent to the security of most banks because statistically banks get robbed more often. Spammers and scammers have a fixed cost to initiate an attack and the potential return on investment is proportional to the user base. A platform below a certain size simply isn’t profitable to attack. It isn’t that small shops are going to be better at mitigating spammers and scammers as the article states, small shops just aren’t being attacked. If the arguments were true that there are diseconomies of scale there wouldn’t have ever been consolidation in email hosting. Email providers all use the same protocols so the incremental cost of attacking a small provider is zero. A small company hosting their own email will quickly see their customers flee for the big providers as they drown in spam. Scaling spam management was the primary driver that drove consolidation in email providers in the early 2000’s. This also drove consolidation in areas with similar economics such as e-commerce. The low cost of attacking a new player in the e-commerce space and the cost of scaling risk management drove a lot of the growth of PayPal and spawned the growth and consolidation of outsourced e-commerce fraud risk management. The economics are going to be true of any n-squared business model where the value is in the size of the network. I go to LinkedIn because it has the lowest scam rates but because most of the people I work with are there. While a wildly diverse ecosystem would be more resilient against fraud this is the internet, the biggest n-squared system of them all. It’s unlikely that the internet is going to devolve into small, diverse fiefdoms so the problem is here to stay. |