Thread by @GRANTGILLIAMBTC

1/ In a world that is becoming increasingly gated, controlled, censored, and manipulated, it is more important than ever to offer an alternative which is open, permissionless, transparent, trust-minimized and egalitarian

2/ The continued development of open source software plugging into the bitcoin network remains paramount to counteract the centralizing forces of institutions, technology, and the associated encroachment on human freedoms

3/ The development of open source software in bitcoin can not only coexist alongside commercial motivations, but open source development and commercial aspirations can be additive to one another resulting in a better end result than either strategy on a standalone basis

4/ The value proposition from an open source strategy will be far more meaningful than we’ve seen prior to bitcoin, and the open nature of its network will be the key value unlock for enabling this

5/ That paves the way for participants across the ecosystem to pursue open source endeavors in a more meaningful way than they might have considered previously, including individuals, companies, investors and others. Some already understand this (e.g. @jack), but most do not

6/ The attractiveness of building, supporting, and investing in open source businesses specifically within the bitcoin ecosystem will become more obvious over time, especially as early winners emerge

7/ Free and open source software (FOSS) follows the four essential freedoms as defined by Stallman Freedom to:
-See, verify, access and use the source code
-Modify the code
-Redistribute and/or commercialize the code
-Distribute copies of the modified code
gnu.org/philosophy/fre…

8/ Community benefits of FOSS include accessibility, censorship resistance, and the ability to create a viral community that strengthens the software and can protect users from coercive actions of an antagonistic third party, whether a centralized authority or the upstream team

9/ Open source software allows users to interact with software in a trust-minimized way. Open source software dramatically tilts the power balance away from those who might want to exploit their position to control users, allowing the code to outlive the team and project

10/ There are dozens of common open source licensing strategies, the most common of which are GPL, MIT and Apache, estimated to represent roughly 85% of open source licenses
opensource.org/licenses

11/ Some companies opt for licensing strategies which are not by definition FOSS but offer users benefits vs. proprietary software (e.g. BSL and open core). These approaches give users the power of source-viewable code but do not fully unleash the viral nature of FOSS development

12/ Company benefits from open source development include allowing for community contributions, accelerating product feedback and innovation, improving software reliability, scaling support, driving adoption, and increasing the technical talent contributing to the business

13/ The full potential of open source can be achieved when technological development is paired with a sound commercial/funding model. Developing a viable economic model that pays for itself not only creates sustainability in a project but also accelerates the open source movement

14/ There are many business models that can work, but they all typically revolve around selling services on top of open source software:
- Support services: maintenance, installation, support
- SaaS / managed services: backup, hosting, security
- Tooling / enhanced functionality

15/ Many businesses with open source models have proven successful, incl. Red Hat (acquired by IBM, >$3 billion in revenue today), MySQL (Sun Microsystems), XenSource (Citrix), Revolution Analytics (Microsoft), MongoDB (IPO), Mulesoft (Salesforce), Elastic (IPO), and Gitlab (IPO)

16/ FOSS models must deliver something customers are willing to pay for on top of free software. The nuance is it becomes less about monetizing the past (rent seeking) and more about delivering value in the present (better service, community, expertise, and customer experience)

17/ Open source businesses in the bitcoin ecosystem will prove to be the most powerful models we’ve seen to date, where the open monetary network will provide a stronger feedback loop to benefit both the network and those developing open source applications on top of it:

18/ (1) The “company development flywheel”: a larger developer network supports technological innovation, enhancing product support / reliability, building customer loyalty and brand equity, and ultimately accelerating community building, driving further interest from developers

19/ (2) The “bitcoin infrastructure flywheel”: company open source development strengthens the network as a whole, driving enhanced utility, increasing adoption, and attracting additional capital into the ecosystem to support infrastructure development

https://twitter.com/GRANTGILLIAMBTC/status/1475466009393963011?s=20&t=hDA4pL70IU5tiBuSJizJdg

20/ (3) The “company growth flywheel”: as capital is invested in companies building open source applications, further company resources are available for technological development, driving accelerated company growth and attracting additional investment

21/ (4) The “bitcoin development flywheel”: as capital is dedicated to open source contributors, further resources are allocated to protocol innovation, opening up enhanced features and functionality, further attracting new developers and altogether strengthening the network

22/ These four forces together form a very powerful vortex through which the entire ecosystem is pushed forward, reinforcing its strength and benefiting all participants in the network

23/ It should sound intuitive that open source applications should go hand in hand with open source money, but I think it is difficult for most to comprehend just how dramatic the impact of this will be

24/ It will not only be a game changer for individual participants, but also a significant opportunity for early movers to unleash the power of open source to drive growth for their business and create projects of unprecedented scale by leveraging the network effects of bitcoin

25/ Not every open source project needs to have a profit motive to drive value, but contributing to open source vs. pursuing commercial endeavors is not an “either/or”: open source projects can drive significant profits, and this will result in sats flows and bitcoin dividends

26/ Contributing to open source development will provide great asymmetry while benefiting all other participants at the same time. Bitcoin uniquely provides an incentive structure where the devotion of resources is good for business, good for the industry, and good for humanity

27/ When we formed Ten31 we wanted to support the ecosystem, inspired by the efforts of Square and HRF, as well as Brink and OpenSats. We created a recurring management fee-based donation model, earmarking capital to create a consistent source of funds to support development

28/ Ten31 is supporting open source development in a variety of ways:
Grants: @BitcoinQ_A in 2021, 2022 grants TBD
Founding contributor to OpenSats
Sponsoring 4 devs to attend HRF 2022 Oslo Freedom Forum
Sponsoring a seat for a dev to work in the new Bitcoin Commons in Austin

29/ We are also proud to be one of the most active investors in bitcoin businesses who are supporting open source development in some way, including @hodlhodl, @nodl_it, @river, @SamouraiWallet,@sphinx_chat, @start9labs, @ln_strike, @SwanBitcoin and @unchainedcap

30/ Final thoughts
- Development of free and open source software is an imperative for human freedom
- Open source development in the bitcoin ecosystem creates a powerful vortex that benefits contributors, companies and the network

31/
- Open source development can coexist alongside profitable business models and can be enhanced with external capital

32/
- FOSS businesses can produce sats flows and bitcoin dividends when harnessing the power of bitcoin network effects and differentiating on services, brand, community, experience and time to market

33/
- Every participant in the ecosystem should be considering how it can support open source development. We will continue to contribute in a meaningful way from Ten31 and will actively encourage every company we invest in to consider the same

34/
- For companies building open source tools and considering taking on investors, the best way to judge a partner’s alignment is by historical contributions (similar to reviewing a dev’s commits on github). The actions supporting open source should speak for themselves

35/
-Those that contribute back to the network will ultimately accrue value in their business, brand, customers & relationships. Open source development is good for bitcoin, and what is good for bitcoin will be good for humanity and will ultimately be good for those enabling it

36/ Read my full essay here:
ten31.vc/content/open-s…