What should the crypto community learn from the Linux development model?

Written by: Harry Alford, Business Development Manager at Coinbase Cloud
Translated by: Perry Wang

Web 1.0 is a static web, Web 2.0 is a social web, and Web 3.0 will be a decentralized web. Currently, we contribute to communities without ownership or profit, but Web 3.0 will fundamentally change this phenomenon, advancing to a world where everyone can achieve ownership and profit through collaboration.

By breaking the traditional business model centered around corporate interests, Web3 signifies the feasibility of achieving economies of scale centered around communities. This spirit of collaboration and the associated incentive mechanisms have attracted some of today's most talented and ambitious technology developers, opening up projects that were previously impossible.

Ki Chong Tran once wrote in an article, "Web3 is the next major iteration of the internet, promising to help ordinary internet users reclaim control of the web from the centralized companies that dominate it today." A decentralized network not controlled by a single entity makes Web3-enabled collaboration possible. The new collaborative, rather than competitive, technology is still in its infancy; what can we expect here?

In closed-source business models, users need to trust corporate personnel to manage their funds and execute services for them. In contrast, for open-source projects, users trust the technology that performs these tasks. In Web2, the larger the network, the easier it is to win. In Web3, whoever builds the largest network collaboratively will win.

In a decentralized world, not only can everyone participate, but the design principle of the incentive structure is: the more participants there are, the more success everyone will achieve.

Lessons Learned from the Linux Development Model

The open-source software Linux, born in 1991, supports most Web2 websites. It changed the development paradigm of the internet (Web2) and provides a clear example of how collaborative processes can powerfully drive the development of all future technologies.

Linux was not developed by the tech giants or institutions of the time, but by a group of volunteer programmers utilizing network collaboration. Network collaboration refers to individuals freely sharing information without central control, merely supported by code or blockchain.

In the book "The Cathedral and the Bazaar" ( The Cathedral And The Bazaar ), author Eric S. Raymond shares his observations of the Linux kernel development process and his experiences managing open-source projects. During the rise of the internet, Raymond depicted an era where the prevailing mindset was to develop complex operating systems, carefully coordinated by a small, exclusive group— the "cathedral." The "cathedral" represents traditional enterprises and financial institutions, whose product release cycles are long and require even longer to perfect.

According to Raymond, Linux developed in a completely different way. He explained, "The assurance of (code) quality is not through strict standards or dictatorship, but through a native simple strategy of weekly releases and obtaining feedback from hundreds of users within days, creating a Darwinian survival of the fittest phenomenon for the mutations introduced by developers. Surprisingly, this strategy is very effective." This Linux development model is what Raymond refers to as the "bazaar" model.

The conception of the Linux kernel came from Finnish programmer Linus Torvalds, whose open development strategy is in stark contrast to the "cathedral" style. Linus's users are his co-developers. He cultivated a community that utilized collaboration to extend innovation to match the complexity of users. Linus did many things right, such as releasing early and often, expanding the beta user list, sending announcements encouraging participation, and continuously listening to (and thanking) beta testers.

Just as Linux represents software collaboratively built by network participants rather than a single cathedral, Web3 represents an internet run by a multitude of network participants rather than dominated by a few controllers of the Web2 version.

PoS: The Collaborative Testing Ground of Web3

Cryptographic technology models are used to build user-centered projects rather than company-centered ones. Everyone can take incentives to create secure and usable things. One area that allows every user to maintain a certain level of participation is the Proof of Stake (PoS) protocol—this is also the fastest-growing segment of the cryptocurrency industry. A report from JPMorgan indicates that with the upgrade of the Ethereum network, cryptocurrency staking will become a massive industry worth $40 billion by 2025. With the PoS mechanism, there is enough participation to prevent Web3 from devolving into a "cathedral."

Although there is a team behind each blockchain, ultimately, the design mechanism of decentralized networks means they do not have absolute control. At different levels of participation, multiple groups of users play key roles in coordinating critical traits such as governance and scalability.

As developers move away from Proof of Work (PoW) mechanisms in pursuit of efficiency and scalability, more protocols will implement PoS versions, where users hold tokens (cryptocurrencies) to run validator nodes for specific networks. Whether service providers or individuals, commercial users or institutional users, they are incentivized to protect the network by locking tokens and rewarded in the form of the network's native tokens. Validators may face asset slashing due to misconduct such as double-signing blocks or downtime. Penalties include losing existing funds and missing out on future rewards. Staking is your voice; good behavior is encouraged, thereby increasing the number of participating users, allowing the network to thrive securely without centralized control. Since PoS protocols are in relatively early development stages and have a shorter growth history than PoW protocols like Bitcoin, they will undergo frequent upgrades. Network updates and proposals rely on node operators and co-developers.

For example, the Web3 platform Polkadot is a sharding protocol that enables multiple blockchain networks to run seamlessly together. Polkadot utilizes user-driven governance for network upgrades. The loosely coordinated mechanism is "self-determined on-chain, ensuring that Polkadot's development reflects the community's values and avoids stagnation." When the network sees current staking parameters becoming a barrier to development, they implement restrictions to ensure network stability. The community modifies the terms of service rather than a company.

Rewards serve as an incentive mechanism for node operators, but not every chain attracts users primarily for economic returns. To attract people to use the network, it requires memes, culture, socialization, and purpose. Blockchain in Web3 will continue to be abstracted away.

Millions of customers purchasing NFTs from OpenSea ( the first NFT marketplace to surpass $1 billion in monthly trading volume ) may not care whether it supports Polygon, which according to Techcrunch is a popular Layer 2 (L2) Ethereum blockchain with a more energy-efficient structure, allowing OpenSea to completely eliminate gas fees for creators, buyers, and sellers on that blockchain. These users also do not care whether Degenerate Ape Academy is built on Solana (a PoS blockchain). Collectors only care about adding rare bored ape images to their portfolios. What they participate in provides them with meme value, which is created by other users on the underlying protocol. Most crypto gamers and art collectors are unaware that the more users there are, the stronger the network becomes.

While the abstraction of blockchain may temporarily attract new users into the crypto space, institutional users want reliable technology to provide long-term peace of mind, which means that in some use cases, blockchain supports "cathedrals."

Provenance is a PoS blockchain network developed by the mortgage credit institution Figure, meeting the needs of the financial services industry by providing ledgers, registries, and exchanges of various financial assets and markets. This blockchain is operated by major financial institutions such as Franklin Templeton and Calibre Home Loans.

Although financial institutions adopt traditional practices of centralized control, they are quite interested in running nodes, as this can earn transaction fees. Another layer of incentive for them to participate is that some of their businesses use Web3 and blockchain technology, which is cheaper than using old Web2 processes. Even as a "cathedral," PoS provides them with unique incentives.

Since decentralized teams play a smaller role in managing protocols, individual participants only need minimal organizational work to manage the protocol. However, there still needs to be incentives for participants to invest in securing, using, and building the protocol. All these examples amplify the reasons why the bazaar model and network collaboration in Web3 are so successful—alliances of autonomous users working towards a common goal while continuously being incentivized.

In this context, blockchain becomes the medium: a network for storing, transferring, and exchanging value. As Raymond said, "Linus has always kept his hackers/users constantly stimulated and rewarded—stimulated by the prospect of self-satisfying actions. Seeing their work improve continuously (even daily) brings immense satisfaction."

Linux is a catalyst for creative thinking, which is fully manifested in Web3, both now and in its exciting future. However, the cathedral still exists, and it remains unclear whether Web2 will fully transition to Web3. How can technology truly belong to the people, and how is Web3 entirely driven by network collaboration? Must it be zero-sum? This is a leap of faith. The "cathedrals" support rent-seeking behavior and are deeply rooted in the Web2 economy and business models, but they need to continue embracing the "bazaar," shifting towards these community-driven, bottom-up rather than top-down ways of working.

Web3 may not be the final answer, but it is the current iterative version, and innovation is not always obvious from the start. Loot "begins with fictional gear lists, supplemented by ample decentralized imagination." As long as incentives encourage talented builders to collaborate, Web3 can open up a brand new world we have never dreamed of.

The "bazaar" model has reshaped the image of the commercial software world to some extent, just as network collaboration in cryptocurrency will inevitably change traditional business models. Without accepting a certain degree of decentralization, centralized enterprises/institutions will not win, while those that do so first will lead their competitors by decades and may achieve some success.

Network collaboration leverages the collective wisdom of the community and has reasonable prospects. We have already seen a surge of interest from the outside world in the crypto space, and even if the crypto space does not follow the principles set by Linus Torvalds, it will at least walk alongside them. The future of the internet will belong to those who "leave the cathedral and embrace the bazaar."

Source link: blog.coinbase.com