What Can Blockchain Projects Learn from Open Source?
I’ve been involved with open source over a decade now. I’ve been part of small projects with innovative ideas which grew into large projects with solid communities. I’ve also witnessed how dysfunctional communities can suck the energy of projects for years. All that thanks to the open source development and collaboration. In recent times, I’m active on the blockchain space as well: reading, writing, and contributing to projects. And I came to the conclusion that blockchain projects are startups with open development and open business models. And to be successful, the first and foremost, blockchain startups have to learn how to build communities the open source way.
Open source code
One of the fundamental premises of blockchain is decentralization and giving control and data back to the user. Such decentralization cannot be achieved without transparency and openness. If the source code is closed, that is no different to the centralized closed systems of today. Without making the code open, there is no way to read and confirm that a system is doing what it is promising to do. There are projects that are trying to avoid it, but even they recognize that the code has to be open to a certain level at a minimum. For example, Hedera Hashgraph (which is technically not a blockchain project, but a similar class of software) has said the code cannot be freely distributed (forked), but it will be open for review. That proves our premise: blockchain projects, first and foremost are open source projects. Whether this can be classified as open source according to “The Open Source Initiative” is not in the scope of this article. The point is, if the source code is not readable/verifiable, there is no point in having something run on a non-trusted blockchain platform.
In addition to the source being open, what differentiates blockchain from non-blockchain open source projects is that fact that for the first the runtime is open as well. An open source project can be developed in the open, but then run and consumed as an open core, as a service, or as part of a closed system. Public blockchain (not looking into private ones here) are permissionless, anyone can join and leave a network, anyone can run a node or two. It represents a trustless and borderless runtime with open governance.
Another distinct aspect of blockchain is that blockchain projects in addition to the open source code, open runtime, also have open data. Anyone can fork the code (the client application), fork the data (the blockchain history) and start a new network. That ultimately makes blockchain projects the most open software systems ever existed. Open code, open data, open runtime, open business model, ensure openness in multiple dimensions.
Open business model
Blockchain startups are a very unique mix of open source development, and open value capture models, all blended into one at source code level. While a non-blockchain based open source project is typically used for creating value through collaborative development and open adoption, capturing value happens through a separate business model. The business model can be thought in advance or defined later such as SaaS, open core, subscription, etc. With the blockchain projects, the business model is described in a white paper, and the token model capturing value is implemented in the source code in advance. All that makes blockchain projects a unique blend of value creation and instant capture and distribution.
Why be so open?
Most of the blockchain projects are aiming to become some kind of platform or a hub with open standards and protocols that will attract and be adopted by the developers and consumed by users subsequently. The primary way these platforms and protocols attract developers is not through technical superiority over non-blockchain technology, but by the unique decentralization, characteristics achieved through openness in multiple dimensions. These platforms have to be open in order to become more attractive than the existing closed systems which already have all the developers and users on them. Being open is not only a prerequisite for its transparency, but also for its distribution and adoption. That is especially valid for projects which are aimed to be consumed as a platform or protocol by developers rather than end users. Open source is the primary way for developers to explore, learn and start using a project.
Isn’t “open” a weakness?
There was a time when being open source was considered a dangerous act as a competitor could copy and steal the code or the ideas. The recent times proved that being open source is the primary way for developer adoption, especially for developer-centric platforms, tools, and libraries. But as we have seen above, blockchain is also open runtime and open data as well. Which means anybody can fork the code and the data and start a parallel network. That makes a project vulnerable to even more kinds of splits/forks and value grab. And we have seen this happened many times with the forks of the most popular blockchain networks such as Bitcoin and Ethereum. Yet, these projects are performing better than projects which are looking for ways to prevent forking but also lack the ability to attract followers. That is because being open is actually a sign of strength. If a network is so open and has survived forks and attacks, it makes its community only stronger.
We can observe the act of being open not only in projects, but also people and organizations. Today, people and organization rush into sharing and showing off their knowledge through open source code, conference talks, blogging, tweeting, etc. The innovation is happening so fast in certain areas that by the time somebody can understand and copy an idea, the inventor of the idea will have created the next one. And being a copycat in a winner takes all markets has a negative networking effect on community growth. In the journey to conquer the closed and centralized systems, being open is the primary weapon.
Hype is different than a community
I’ve seen many times, how successful Initial Coin Offering (ICO) investors measure hype around a project for an early investment. Typically such a measure works only when the early investment is accompanied by an early exit. In practical terms that means identifying the most hyped ICO, and selling all tokens as soon as it hits an exchange. Measuring such a hype is done by simple statistics around Twitter followers, Facebook followers, Reddit subscribers, Telegram users, etc. These metrics have a little value for measuring a community strength for the following reasons:
- Metrics are artificially inflated with fake accounts, paid followers, subscribers, etc;
- The ICOs themselves run airdrops campaigns and distribute tokens for following, subscribing, joining, etc;
- These are the wrong metrics for measuring a developer-centric community;
What I mean by the latter is that an open source project that is going to be used by developers (as a platform, protocol, whatever) should measure developer activity, rather than airdrop hunter activities. None of the actions mentioned above are building stickiness in a project community. In fact, all of these activities are purposefully skewing the community metrics using temporary incentives.
Community over market cap
The Apache Software Foundation (ASF) is one of the biggest and oldest software foundations, home of hundreds of popular open source projects. And there, we (I’m a member, committer, and PMC there) have a very fundamental belief that says: “Community over Code”. As a software foundation, we are all about code, and wouldn’t have a reason for existing without the code, but this slogan actually codifies how we do things, and how we go about decision making. ASF is first a home for communities rather than a repository for code. The code is the by-product of a good and healthy community. And we first try to grow healthy communities united around projects.
If we look for example how an ASF project measures its quarterly activity and progress, that is by the number of mailing list subscribers, emails sent, issues opened/closed, pull requests created/merged, software releases done, committers and PMCs voted for. The last one is a very important long term indicator for the health of a project measuring the ultimate level of commitment of community members to the success of the projects. If you look at these metrics, these are all about activities performed by technical people rather than temporarily incentivised airdrop hunters. These activities are harder to fake as they require doing something for the project (usually consuming brain power and time) rather than clicking a like/follow button which easier to outsource.
A blockchain project has a more complex ecosystem than an open source project alone. There are developers, but also miners (or their equivalent for running the network), investors, and eventually users. Measuring only the developer activity won’t be indicative enough for the full ecosystem, but focusing on the right metrics would be a good start.
In a similar spirit to the ASF’s “Community over Code”, I think the cryptocurrencies would benefit from “Community over Market Cap”. A healthy community is a far more important long-term measure than a temporary large market cap. The price of a token/coin and its market cap can be artificially manipulated or temporarily affected by a bear market. A strong and healthy community can hodl and survive ups and downs. An unhealthy community, without any stickiness to the project would fall apart anyway.
Building communities the blockchain way
Are there good examples of building stickiness and community around the new blockchain projects? I have seen a few projects that have recognized the importance of the community from the very beginning and approached their token sale completely uniquely. These projects aimed to familiarizing the prospective early investors with the project goals, white paper, mission and not only ask for money. There are definitely more examples, but the projects with unique token sale processes I have seen are the following.
- DFINITY project had a registration process that cost close to 10$. Then they gave that money back in the form of a swag and a free t-shirt. But it was a good method to get rid of the people who are there only for the noise and not even willing to commit 10 bucks.
- QuarkChain ICO process had quiz with 25 not very simple questions. In order to join the token sale, one had to be part of their telegram channel from early days + have a good score on the quiz + pass the lottery. While the lottery and telegram channel components were already present in other ICOs at the time, the quiz actually forced candidates to find the answers in a short time, and learn about the project (that led to a blackmarket of quiz answers, but it was a nice attempt the least).
- One of the best executions of community building during ICO phase has been of Mainframe. Mainframe run three crowdgift campaigns:
- Proof of Being — where tokens where literally physically dropped from the air in certain locations around the world. To get tokens, one had to get to the meetup, meet the team and grab some tokens.
- Proof of Freedom — where participants had to answer the question why Mainframe mission mattered to them, and submit the answers in any form: tweet, blog post, audio, video, drawing, etc. I also took part in it by writing a blog post.
- Proof of Heart — where participants were asked to donate Ether which then went to a few non-profit organizations.
We can see how Mainframe used three different methods (each with its pros and cons) to build stickiness, awareness and community around its project and even managed to raise money for non-profit organizations.
Blockchain projects are especially sensitive to Metcalfe’s law and their value is directly proportional to the size of its community. A token not used by anybody is worth nothing. A platform without developers is a zombi platform. Building a community around the crypto project is as important as building the platform itself, if not more. While the crypto world knows how to raise money, the open source world knows how to build communities. They can learn something from each other.
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