Motivating Open Source Developers
One of the more important things to realize about the cryptocurrency protocols in general is that they are open source. For those of you who don’t know, open source software is software where users are granted the right to modify and distribute the software however they wish. This makes it a completely community driven software, with endless opportunities for change and evolution.
From this, one question emerges: why do the developers do it? They clearly have the skills to make money doing something else, but are more than willing to donate their time to improving the coding behind certain protocols.
The Development of Cryptocurrencies
One of the original benefits of Bitcoin that was consistently highlighted is the open source nature of the platform. It creates a very democratic and populist aspect to it, where anyone can help improve the protocol, although all changes would have to be implemented by the majority on the network. Additionally, the ability to modify the content of the code is exactly how the fork that created Bitcoin Cash was able to be executed.
Then you have Ethereum, which is completely open source and allows for users to build their own decentralized applications (Dapps). The whole point of this is that no one will have to start from scratch in developing a new program, and creating a Dapp only requires the new “smart contract code” to abstract out what the application does.
Common Reasons for Participating in Open Source
The research conducted and reasons proffered for why a developer would do open source work that doesn’t provide any direct financial incentive is less than conclusive. However, there are some reasons that pop up quite often, and make sense to those of us not in the development community.
First, contributing to open source helps a developer build a portfolio or reputation, as well as building up their skills. In the long-term, the payoff is worth the investment of time.
At the other end of the spectrum, you also have developers who already have a full-time job, and don’t necessarily need the money. For them it is a distraction and a hobby that helps them feel like they are contributing to the overall well-being of the network.
However, despite all these reasons, the worry is without direct financial incentives, developers will eventually either stop working on their projects or just find a big company to pay them.
Solutions in the Blockchain World
With more cryptocurrencies popping up every week, you can see how the evolution in compensation has occurred within the industry. For these newer projects, it is becoming common for a percentage of the coins to be withheld as a form of developer’s reward. This is still a controversial position to take, but the developers need to be compensated in some way, in the same way they would receive equity working at a tech startup.
This doesn’t change that with Bitcoin and Ethereum, the open source structure makes it difficult to get the incentives properly aligned over the long-term.
One recent point-of-view is that the developers do a lot of the work while receiving the same benefits as any of the long-term holders of the coin. HODL’ers are experiencing a rapidly improving network, without having to pay anything for it. This is yet another reason why a faction would like to revamp the incentives to reward developers better.
The final solution may end up being somewhere in the middle. The casual contributors who are doing this for fun, don’t need incentives, however those who are maintaining the network should receive something.
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