Will Web3 make the future of open source better?

"Tokenization of Web3 may provide a business model for open source contributors. The relationship between the two does exist, but the form is worth exploring"

Many opinions have mentioned that Web3 and encryption technology can solve a series of problems such as data monopoly and algorithm control , but I think that exploring this problem requires more fundamental thinking:

Open source: Many of the computer software and other products we use today are obtained through open source. Open source provides many basic components for many products we use, and these components are like the bricks that build a house.

In this article, we talk about the relationship between Web3 and open source, which may inspire you.

First of all, when it comes to the connection between open source and Web3, you need to understand the following points:

What? Open source and how will it affect our daily lives?

How? How is the open source trend formed?

Why? What mechanism allows open source to continue to iterate? From the perspective of public products, why should we empower open source? Where is its importance?

Understanding the above questions helps to understand how today's Web3 rides on the wind of open source, continues to iterate the open source model in various ways, and helps the decentralized community get more economic incentives, consolidating the decentralized community as a whole Growth and inclusion.

Open source, as the name suggests, the source code is public and anyone can see it in open mode. If you want to read, download, or optimize or use according to your own use, you can find Linux (the mainstream classic open source operating system) directly

To give an example: To some extent, the open source model can be understood as Wikipedia, but what we are talking about in this article is not to edit entries together, but to unite and write valuable software together. What's more interesting is that the usefulness and trustworthiness of open source is that you can "Fork" the project, that is, you can rewrite the source code according to your own needs. As a result, many open source projects evolve into dominant tools in a field because people don't feel nervous or feel limited because the software they rely on is a monopoly product.

In a Forrester report not long ago, 96% of companies feel that "open source is very important to the business and is a mission critical", and 98% of companies plan to increase or maintain their strategy for open source in the next year. There are also reports that Linux is the operating system of choice for modern servers. With 96.3% of the top 1 million web servers running Linux, open source is basically a key part of many of the technologies we see in widespread use today.

Want to learn more about the nature of the open source momentum driving it? Highly recommend reading two books:

The part of "The Cathedral and the Bazaar" or "The Penguins of Kos" mainly includes two points:

The cost of writing software continues to decrease

The cost of publishing information online is approaching zero

Technologies such as Git or Wikis (which allow multiple people to work in parallel) further reduce coordination costs.

This means that different groups of people can come together to produce software that is on par with, or even better than, the closed-source versions created and sold by traditional companies. But why do you do it? Usually because they find it interesting, or because they are users of the software and don't want to pay for it, or because they can make a living doing it.

To summarize:the trend of powering open source has just started, and has been going on for decades before, and I don't think it's a blip.

Most of the time, independent open source developers are really paid nothing compared to the value created, or compared to the money tech gurus can make in "traditional" technical work. And open source projects are underresourced compared to the value they can provide. Thus. When problems arise , the general public can feel the power of open source...

Tell a story: The Heartbleed Bug vulnerability a few years ago led to the leakage of encrypted user data in tens of millions of servers. The Heartbleed Bug allows anyone on the Internet to read the system's protected memory. Attackers can eavesdrop on communications at will and steal data directly from service providers by simulating service providers and users. The data of 4.5 million patients in the US hospital system and records were stolen.

Last year's "Log4j2" loophole, many technology giants have been recruited. The cartoon below is funny, but also scary, and it's done with great precision.

That is to say: Although open source has great value, due to the nature of public goods, in many key projects, open source strives to maintain only a little light and heat of its own.

Viable business models do exist in open source, and there are many multi-billion dollar companies built on open source projects. A very typical example is Red Hat (Red Hat). If you want to know more about Red Hat, please read this article: Talking about the open source business model from the rise of Red Hat

Red Hat sells services to enterprises that want to use Linux. Specifically, enterprise customers pay a fee to obtain on-demand, advanced SaaS-like products with security and privacy features, rather than directly using the open source version. Red Hat Hat can help enterprises customize Linux services. Red Hat was acquired by IBM for 34 billion in 2019, and its annual revenue can reach billions of dollars.

However, the problem with these centralized business models is that this type of business model actually relies on many decentralized counterparts. What makes Linux so valuable is the thousands of contributors who provide a level of stability and integration that no other operating system can provide.

If Red Hat tried to produce Linux itself with its own employees, it would probably fail. It's the same way that Wikipedia entries are better than centralized encyclopedias like Encyclopedia Britannica: Peer Production beats Hierarchy for creating certain types of goods, which is what we have today's argument about Web3.

Many Linux developers live off meager donations (from Red Hat and others like it), but Red Hat can simply add a layer on top of it, and the revenue can reach billions of dollars per year. It seems a little strange. So why don't all these Linux developers build the enterprise layer themselves and use the profits to fund everyone's work?

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To answer this question, we have to consider the steps the Linux community had to take to make this happen:

Develop some sales/marketing teams to handle corporate clients

Find developers who are willing to engage in enterprise services by subsidizing them with high prices

If these developers end up creating a multi-billion dollar company, figure out a way to reward each one proportionally to their contribution.

Note that these are essentially coordination costs, and coordination costs are not low, and coordination is what the company model is good at. Therefore, a separate company can be formed to do these things. However, the major challenge of distributing equity to Linux development contributors around the world is that the distribution of equity is very difficult to balance, so we can only maintain this decentralized and open relationship with developers and go around back again...

But what about coordinating digital ownership through more flexible means? This is what Web3 wants to do, imagine we do the same steps above, but coordinate through Token .

Create a DAO (Decentralized Autonomous Organization), read this article about DAO knowledge:

Description of Web3 Project Metrics (DAO)

In addition to using Token for ownership and governance, many elements of DAO seem similar to some traditional organizations.

Use these tokens and the cash flow created by the DAO to pay developers and sales/marketing teams.

Token is also used to reward contributors of the open source version.

Link the income of the enterprise version directly to the Token, so that everyone can obtain the success of the entire project in proportion (open source + service model)

Of course, there are still some problems in thecurrent Web3, and it still needs to be iterated, but these things can be done now for those who are willing to be pioneers. There are tools to create DAOs with one click, there are ways to tie revenue directly to governance tokens, and there are systems that reward contributors based on community-determined contribution levels.

Richard Stallman founded the free software movement and the GNU project, one of the origins of open source. Stallman put forward: "Free as in speech, not as in beer." The main pursuit of free software is public interest and digital freedom rights.

Pictured: Richard Stallman

Then, open source software also developed. However, in the current open source field, there are often cases of "free" use of software, but this is not because large companies refuse to pay for services, but because the current mainstream model of software is "SaaS-software as a service".

Instead of buying a perpetual license, the company pays a monthly service fee to use the current version of the product (usually on the cloud). Commercial companies pay for this convenience, and this model is exactly a large-scale business model that can be built using open source.

If you tie it all together, the reason open source has always been as free as beer is because the coordination costs between open source projects and their service-based counterparts are prohibitive. This is why we mentioned here today why tokenization and decentralized communities have such a huge opportunity.

Of course, there are already large enterprises using this model of binding service businesses to decentralized protocols, from Braintree, Parsiq, most centralized exchanges, to Ethereum itself. There are many forms of these service businesses: For example, the service of Ethereum is to provide computing power for applications in the world, while on Braintree, the services provided are mainly to help traditional enterprises and provide payment solutions for various new models (cryptocurrency).

Braintree is a Chicago-based company that specializes in mobile and web payment systems for e-commerce companies. Braintree also accepts Bitcoin for payment and transactions. Users can open an account at Coinbase and then link the new account to Braintree.

Let's look at this picture now:

However, not all of these platforms are themselves open source, but importantly, the revenue tied to the service model is directly fed back into the value of the native token. In this case , the incentive to push open source over time would be huge, as it would allow a more vibrant developer and service-based ecosystem to continue, and the project would strive to leverage the entire It's in the best interest of the network to function (because if it doesn't, it can be "forked", and someone else can fork and then rewrite a better version).

Of course, Tokenized and decentralized communities will not be the only viable model in the future. Nor are they the only innovations possible through cryptocurrencies. BTC is digital gold, and NFT can be understood as a safe for digital assets. The influence of these encryption origins and basic characteristics may have a profound impact on the future of open source. But I think what makes this particular area so exciting is that the decentralized community isn't just building open source, it's refactoring a lot of things in our modern lives, optimizing a lot of systems that exist today.

And it's not just code. Think Wikipedia, Facebook, Uber, Linux -- all of these projects have a small number of people working to define the rules of the platform, and then a large number of people participating in building value. Difficulties in capturing and distributing value in these communities take many forms, from a Facebook or Uber model where a few people capture huge value, to a Wikipedia or Linux model where almost no one captures the direct financial benefit. Then, the structure described above can be applied to Facebook, just like Linux, where users participate in the creation and acquisition of value.

The reason I got into the Web3 space was my lifelong connection and commitment to science, the most important public good in the world. The biggest problem I find is that relying on donated or funded public goods, if there is no direct connection to the value of the product, there are never enough resources compared to their impact. Web3 provides a new business model through a more flexible and dynamic form of digital ownership. In this model, decentralized organizations and public goods can be directly linked to equity and income streams through Token.

If this can be done, the base of open source that can be built upon will greatly increase and power a more innovative and equitable world.