Why open source software is essential in the crypto industry?

You are certainly familiar with open source software and perhaps even use it. Among the best known, we can cite Linux software, the Mozilla Firefox browser or the Open Office bureaucratic suite, which are certainly the most popular software.

In the crypto industry, open source software represents almost the majority of software used. The world's first cryptocurrency, Bitcoin, is on open source computer software, freely searchable and accessible by everyone. This was a voluntary choice on the part of founder Satoshi Nakamoto. Some people argue that if Bitcoin had been released under a commercial license, it would have had a drastically different history, operation, and impact.

Typically, open source software is sought after by the crypto community because of its transparency, flexibility, and security.

Recently, with the scandal that broke out following the launch of “Ledger Recover“, many people in the community have realized the importance of using Open Source software.

In this article, we will explore why open source software is essential in the crypto industry in and we will see how they contribute to the growth and development of this industry.

What does “open source” software mean?

Open source software is a computer program whose source code is open, accessible and distributed. The main feature that distinguishes open source software from other types of software is that its license allows anyone to modify, read and redistribute it. This is not a commercial license that allows a single company to exploit the software and generate revenue.

However, it is important to emphasize that “open source” does not necessarily mean free. Even though most open source software is available for free and is paid for through donations, there are paid solutions.

The particularity of open source software is that it allows large-scale collaborative development. This is possible because it becomes more interesting for the parties involved, such as developers.

Open source software highlights product quality because its source code can be improved by anyone. The interest may be, for example, the provision of corrections to resolve a multitude of problems, often linked to security.

In the world of blockchain technology and cryptocurrencies, it is important to know that not all software is always open source, contrary to what one might think. Indeed, they can be closed and completely private with a commercial stake. This is the case for certain physical wallets like Ledger and SafePal for example, which are currently unopened.

What is the difference between free software and Open Source?

We can conflate free software with open source software. It should be noted that open source software is a work methodology (collective) while free software is more an ethical choice.

“Free software” is software that respects the freedom of all users. The latter have the freedom to use, execute, copy, distribute, and improve this software.

What are the advantages of open source software in the cryptocurrency industry?

Transparency

Open source software offers unparalleled transparency compared to proprietary software. In the case of cryptocurrencies, transparency is essential to ensure the trust of users and investors. Open source software allows anyone to examine the source code and identify potential security or performance issues.

Safety

Open source software is generally considered more secure than its proprietary counterparts. Indeed, the open nature of the source code allows a large community of developers to continually inspect and improve the code, allowing security vulnerabilities to be quickly detected and fixed.

Flexibility

Open source software offers increased flexibility compared to proprietary software. Users and developers are free to modify and improve the source code to meet their specific needs. In the case of cryptocurrencies, this flexibility allows new features to be developed and existing protocols to be adapted to meet the ever-changing challenges of the sector.

Reduced costs

Open source software is often free or inexpensive, which helps reduce costs for users and companies developing cryptocurrency-related projects. Additionally, the absence of licensing fees can encourage the adoption and experimentation of new technologies and innovations in the cryptocurrency space.

Collaborative development

Open source software promotes collaborative development that can accelerate innovation in the cryptocurrency industry. Developers around the world can help improve software and share their knowledge and expertise, helping to quickly resolve problems and create new features.

By reading the collection “The Book of Satoshi” by Phil Champagne, we can clearly see to what extent Bitcoin has been able to be constantly improved thanks to the collaborative work of several people who contributed to its development. Perhaps without the contribution of certain computer scientists, Bitcoin would not have been as successful as it is to date.

What are the disadvantages of open source software?

The software that is most used is generally closed source software that is owned by companies. This means that you cannot edit, view or distribute the code of the software you use. For example, Windows, Microsoft Word, Windows, Mac OS, Adobe Flash Player, etc. are proprietary software.

If software of this type is more popular, it is because of the financial means available to the issuing companies. These companies have the means to promote and market to encourage their use. Many users do not know that there are alternatives because due to partnership contracts with smartphone or computer manufacturers, some closed software is already pre-configured.

This naturally pushes more people to use it, almost by default. Examples of open source projects in the cryptocurrency industry.

If they are more popular, it is also because companies will be able to work on simpler aspects of usability than open source software would do. The latter must organize the work of several people, which can make the code of certain developments heavier.

Finally, and this is certainly the biggest flaw of open source software: their exposure to hackers. In DeFi, many protocols have been hacked, leading to the loss of millions of dollars due to the exploitation of certain bugs. By exposing the code to everyone, it is mainly hackers and hackers who can take advantage of the flaws to their own advantage.

However, some will argue that this is how software gets better. We are rather inclined to support this idea. This ultimately makes it possible to strengthen the code.

What are open source cryptocurrencies?

Bitcoin

As mentioned earlier, Bitcoin is the most well-known example of an open source project in the cryptocurrency industry. Even more, Bitcoin is also a free software, sous the MIT license.

The source code of the Bitcoin software is accessible to everyone, allowing developers to contribute to improving the protocol and proposing new features.

Ethereum

Ethereum is another cryptocurrency platform and Smart contract based on open source software. Ethereum's source code is publicly available, allowing developers to create decentralized applications (dApps) and help improve the protocol.

Open source physical wallets

Physical wallets (or hardware wallets) are devices that allow you to store, send and receive cryptocurrencies securely. THE open source physical wallets, such as bitbox, Jade from BlockStream, Passport by Foundation, ColdCard, SeedSigner and One Key, provide a higher level of security, transparency and reliability than their proprietary counterparts.

These open source wallets allow anyone to audit, verify and contribute to the source code, ensuring better security for cryptocurrency users.

—> Read: The 6 best “Open Source” wallets to store your bitcoins and cryptos

What are the open source trading and exchange platforms?

Open source cryptocurrency trading and exchange platforms, such as BISQ, allow users to trade and exchange cryptocurrencies in a decentralized and secure manner. These platforms are based on open source software, which guarantees their transparency and reliability.

Open source decentralized finance (DeFi) projects

Decentralized finance (DeFi) is a booming sector in the cryptocurrency industry, and many DeFi projects are based mostly on open source software. The opposite would be difficult to envisage as it would create fear among users.

Platforms such asUniswap, Compound and Aave allow users to lend, borrow and trade cryptocurrencies and digital assets in a decentralized and transparent manner.

What is the advantage of open and collective collaboration?

Open source promotes collaboration and innovation in the cryptocurrency industry. Projects such as Bitcoin, Ethereum and other blockchain projects leverage the open and collaborative nature of open source software to develop innovative and disruptive solutions.

By being part of the entire community, we avoid the risk of a single entity creating software that favors only certain actors over others.

Likewise, collective work, as a general rule, offers better results because mathematically, the addition of several intelligences on a given project brings more answers than if one had submitted to a single person.

Developers who contribute to open source software projects in the cryptocurrency industry also receive personal benefits. They can improve their skills, expand their professional network, and gain community recognition for their work.

Better yet, they can work on software that matters to them - deeply - as computer scientists like Gregory Maxwell do with the design of Coinjoin For example. By working voluntarily on open source software, the results can be much more convincing than if they are carried out within the framework of a private company, with internal constraints.

Why are open source projects considered more reliable and more sustainable?

Open source software is generally considered more reliable and durable than software designed and operated by private companies. The active participation of a community of dedicated developers ensures that the software is maintained, improved and continuously updated, ensuring its longevity.

A private company that operates software remains a business with all the legal obligations incumbent upon it. Likewise, the company must generate revenue in order to maintain its costs, etc. If a company goes bankrupt, necessarily, the software deployed will disappear with the company.

This is the biggest risk we run when we choose software that is not open source. We take the risk of seeing them disappear if the bankrupt company does not find a buyer.

In conclusion, open source software is recommended in the cryptocurrency industry due to its transparency, flexibility, security, and ability to foster innovation and collaboration.

Cryptocurrency and blockchain projects that use open source software are better positioned to respond to the challenges and opportunities of this ever-evolving industry.

Why is open source software crucial for the crypto industry?

Open source software is important because it provides free access to a multitude of high-quality tools and applications. They are important because it allows a large part of humanity to have access to software and technological solutions freely and freely. This also prevents certain tools from being solely exploited to enrich a few companies and benefit the minority over the majority. This also prevents certain solutions from being sold too expensive because open source software represents competition that lowers prices.

Open source software is also beneficial in terms of cost savings because users are allowed to use, modify and distribute the software without having to pay licensing fees or royalties.

Finally, open source software encourages collaboration and innovation by allowing everyone to contribute to the development process. By working together, developers can create better solutions with fewer resources.

Even more, open source is crucial for the crypto industry because by being decentralized, cryptocurrencies do not have a single entity capable of stopping certain transactions or controlling the network. It is then imperative that the source code is verifiable and accessible to all to avoid forms of abuse.