Evolution of Open Source

Tuesday, August 21st, 2018

Interesting discussion at a16z on the blockchain as an evolution of open source code.

 

Some of my take aways:

  • The analogy of open source code to a city: Essentially in an open source environment, you have the blue prints to the building blocks like the “power grid” and the “road network” etc. If you wanted to create a new city from scratch, you would copy and recreate the building blocks and then add your own iteration. This is time consuming and difficult and lacks the scale and network effects needed to compete with the armies of coders that large corporations have today.
  • With blockchain it becomes much easier for everyone to collaborate on the same shared infrastructure. The building blocks already exist and are open, transparent and easily audited. Users can then iterate on the same without having to start and recompile from scratch. This creates a canonical structure which has network effects and can let people innovate much quicker and in a more scalable way.
  • Attribution is built into the system and so it allows a creator of a product or code to capture value when their source code is copied or modified or iterated on top of. This allows for a much fairer and transparent system.
  • Two main use cases today:
    • Finance: Because of the underlying exchange system established in crypto currencies, in less than a year of creation, there are already robust lending and derivative protocols. There is a whole suite of new and innovative financial products that could be built.
    • Media: If songs are remixed or modified, the attribution and network effects of the system could lead to more value or “royalty” flowing to the actual creators directly with pricing determined by market forces
  • The analogy of these ecosystems to pendulums: The community gets together and incentives push the ecosystem in a certain direction to a point where it is unsustainable. There is a push back with a move back toward decentralisation and fragmentation of services and then the cycle starts again. 

Its hard to believe that Ethereum and this concept of smart contracts were not around just 4 years ago in 2014! Just shows the innovation and disruptive potential of this space


About the author

Rishad is the founder of Kairos Capital. He started his career with Standard Chartered Wealth Management and has extensive experience in markets, particularly in terms of mutual funds and stocks.

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