Many users of “GNU/Linux“, such as Richard Stallman, have been preaching about the benefits of free software for many years. Having said that, the reality is that it doesn’t make very much business sense to release your source code to the general public. While there are certain situations where creating an open source platform, such as Firefox or Android, can lead to new revenue streams, most of the developers in the free software movement aren’t exactly in it for the money. This could all change with decentralized applications that take advantage of the Bitcoin blockchain. The technology behind Bitcoin could be the healthy dose of greed that this movement needs to survive.
A decentralized application is basically a platform build on top of a cryptocurrency. The services involved with the application are what give the cryptocurrency its value. If you want to purchase any of the services offered by the application, you have to pay for it with that app’s currency. This is what creates demand for the new currency and gives it value. Namecoin, a decentralized DNS, allows anyone to register a .bit domain name on the decentralized application. Those .bit domain names must be purchase with namecoins, which many of the developers and early adopters held from day one. The value of those namecoins has increased dramatically as more people have decided to purchase .bit domain names.
Incentives for Early Adopters
Right now, most free software projects get off the ground by collecting donations through a crowdfunding website. While this is sometimes helpful for programmers, it still doesn’t help as much as the decentralized application model. With a decentralized app, early adopters also get rewarded for telling their friends about the software or building on top of it. The best example of this intensified network effect is found in the first decentralized app, Bitcoin.
Last modified (UTC): April 20, 2014 18:28