Articles on Stock markets

News, Research and Analysis

Help Center
Introduction
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and BlockchainBlockchainBitcoinEthereumLitecoinRippleTaxes and Regulation
Retirement
Retirement Accounts
Personal Finance
Corporate Basics
Bitcoin’s Source Code, Part 2: What Does It Mean That Bitcoin Is Open-Source?

Bitcoin’s Source Code, Part 2: What Does It Mean That Bitcoin Is Open-Source?

Open-source software code can be viewed and changed by anyone, but it actually works in the favor of Bitcoin and other cryptocurrencies.

Bitcoin’s source code was uploaded by Satoshi Nakamoto to a code-sharing site called Sourceforge, which enabled anyone to download, use, and modify the code as they saw fit. In fact, he encouraged the community to do so. The fascinating thing about the design of Bitcoin and many other open-source software is that they will work, and will continue to exist, without anyone owning the rights to the code. In most people’s concept of ownership and responsibility, the owner is responsible for maintaining something, for protecting it from attacks, manipulation, vandalism, fraud, etc, and is also responsible for making sure that it is safe for other people to use.

In an open-source environment, the entire community of programmers can and does take responsibility for maintaining and protecting the Bitcoin code, or whatever source code it might be, as long as it is useful for something. This is often true even if it does not directly benefit the programmers doing the work: sometimes coders will work on such projects simply because they are interesting or forward-thinking, and coders will hone their skills or educate themselves by tackling new puzzles. Sometimes they can take credit for their work and even add it to their resume, but not always, especially since many coders use pseudonyms online to avoid personal attacks.

It seems like an anomaly that Bitcoin could hold value, which has grown exponentially, using code that is not owned by anyone, that anyone can use and modify. For one thing, how could Bitcoin and the blockchain possibly avoid getting hacked or manipulated if everyone has the code? The blockchain is designed to only allow changes to the ledger that are agreed upon by a majority of the nodes in the network which are all expending time and energy to validate all updates. How to you prevent people from simply creating their own Bitcoins if everyone has the code? Because the code for each Bitcoin in existence is carefully tracked on a ledger distributed among thousands of computers.

New currencies using Bitcoin code can be released at any time, and are sometimes called “forks” when they originate from the existing Bitcoin blockchain nodes. These currencies have their chance to become a marketable asset, the same as Bitcoin does, and it is up to the world-at-large to decide if the new currency is good enough to have any market value. In most cases, new currencies or versions of Bitcoin fail to demonstrate staying power. Bitcoin has been strong and has staying power because it uses an immutable distributed ledger which is nearly impossible to manipulate thanks to the proof-of-work required of the nodes in the blockchain.

The open-source nature of Bitcoin means that new versions of Bitcoin, such as Bitcoin Cash, can be developed using the same code which do have the ability to potentially dethrone Bitcoin as the primary digital currency in the world, but the open-source code also means that the community can decide to implement upgrades and changes, such as Segregated Witness (Segwit), when enough community support exists, which will help Bitcoin itself stay viable and relevant. No central authority or programmer can prevent such updates from happening if the majority of the community feels it is necessary. If a central authority did prevent certain changes from happening, it could jeopardize the entire Bitcoin economy.

As with the Libertarian model of society, the “greater good” in the Bitcoin community is served by the efforts of many individuals acting primarily in their own best interest. This, of course, does result in some hot debates and “civil wars” within the Bitcoin community, but when a few version is released, as in a fork, all holders of Bitcoins are instantly credited with an equal balance in the new version, giving everyone the ability to choose whether to move forward with the new version or to simply keep the old version. Bitcoin was made to be trustless and distributed openly. It has been exposed to nearly every attack “in the wild” that hackers have thrown at it, but because the design is strong, and because a worldwide think-tank of the best programmers to ever live will voluntarily step in to make suggestions, which has given Bitcoin a very strong immune system.

Keywords: Bitcoin Cash, bitcoin fork, Segwit, ad-hocracy, meritocracy, crowd-sourced, open-source developments,