Bazaar services | Ethereum Foundation Blog

I am a firm believer in judging the present through knowledge of the past. One of the biggest trends in business and technology over the past 25 years or so has been what can loosely be called the open source revolution. the concept of it good business Sharing source code may not yet be firmly entrenched in the eyes of many traditionalists, but the idea of ​​leveraging existing open source software is. We’re quickly reaching a point where almost all important non-niche software is public in some way. Any Android phone, any Mac computer, almost any mainstream web technology (servers, databases, browsers, compilers); All bases are open.

This was shortly after ESR wrote “Cathedrals and Marketplaces,” and when I wrote my dissertation, “Open Source Software in Business,” Microsoft and its massive closed-source codebase were the clear leaders, but there were serious cases of open-source software being used commercially. There are one or two things.

why? What has changed? Have people suddenly realized that the “bazaar” model, as Raymond put it, is the right direction? no. Introducing an idea alone rarely brings about change, and in any case, the concept of a distributed workforce working as a cohesive whole through individual interests isn’t exactly groundbreaking.

In fact, software development as a process has always been perfect for decentralization. One thing it lacked was a ubiquitous communications infrastructure for developers. It was a way for developers to seamlessly share code and easily work together. It is not surprising that the growth of the Internet, including CVS, IRC, Usenet, and mailing lists, coincided with the growth of open source software.

So what else did the previous “cathedral” model offer?

Actually, that’s right. This has facilitated a number of business operations that we can loosely think of as “value plumbing.” First, it provided incentives to practitioners. This means you paid for the developer to invest time and energy into the project. Second, we provided all the supporting assets (hardware, software, tools, training materials, etc.) necessary for the development to proceed. Third, it played a role in raising funds. Payments were collected from those who benefited from the work being done. Simply put, we managed cash flow to enable and incentivize the production of our solutions, earning us significant profits in return.

At first it was thought to be important, but later it became not so important. People often work on software just for fun. Nevertheless, we cannot deny that this “value plumbing” still plays an important role in human activity and service provision.

So what does this tell us about the future?

Business, especially the service industry, has so far followed very much a “cathedral” approach to service fees, delivery and management that corresponds to this “value plumbing”. This can be recognized through close coordination, increased consistency, explicit top-down management, centralization, and rigidity. The fact that we have a single corporate entity with authority and responsibility for large quantities of products is a very clear sign of this.

As a platform, eBay was a pioneer in truly global decentralization. It has served as a key enabler for small businesses and cottage industries across the developed world (not to mention a lucrative source of funding for some of the less scrupulous operators in Internet-enabled regions of the developing world). With Web 2.0 platforms and mobile (which are deeply intertwined), we see new kinds of distributed applications. The so-called ‘sharing economy’ began to form, with Uber, AirBnB, and TaskRabbit as representative examples. Like eBay, these operators reduce the relevance of the entire class of “structural intermediaries” and replace the “value plumbing” with one large, technologically proficient middleman.

The high level of disorganization they entail usually comes with a degree of casual openness (Uber’s “safe driver fee”, AirBnB’s “cleaning fee”, knowing more about the service providers they match is common). So what do taxi companies, hostels, and unskilled/semi-skilled labor have in common that make them key examples of “decentralized services”? Where does the benefit come from that can be so easily reduced to a scalable automaton?

They manage reputation (through basic word of mouth, marketing and advertising), manage people (through finance, recruitment and contracts), manage markets (by adapting to changes in supply and demand levels) and manage risk (through basic word of mouth, marketing and advertising). inspection). , indemnity, insurance and bonds).

We can’t seriously claim that we’ve created a completely new or open market, but we’re getting close. In the world of open source software, it is a type of shareware. It’s not completely commercial, but it’s not free either. Behind the decentralized veneer, there is still a single entity, a middleman, as you can see if you go to Germany, a country left behind in statism and technosocialism, and the only kind of Uber you can request is a regular government-approved taxi.

So while we haven’t reached this level yet, this is the beginning of a societal shift in expectations. As consumers, we expect greater transparency in our suppliers’ operations (from knowing the name of the driver to the exact origin of the rubber in the trainer) and greater freedom in choosing services. As individuals, we expect greater ability to sell our skills, time, possessions, or potential. As a company, we expect barriers to entry to be low in every market we seek to compete in. As with open source software, it won’t be long before legions of sufficiently talented amateurs (or professionals willing to go it alone) will compete in a market manner on an equal or greater footing with the cathedrals of the industry. .

And the idea of ​​“bazaar service” is the ultimate conclusion of this social change. Since open source software has virtually no barriers to entry and is fluid in terms of leadership and authority, the world of service delivery is: The concerns are the same as 20 years ago. The answer is similar.

Writing software was the first thing to become fundamentally decentralized. This was due to people’s innate technical knowledge and its entirely information-based nature. With Ethereum, cryptography, Web 3.0, and similar services, all aspects of the service follow the same path. The idea of ​​rigid organizations or companies will disappear and the true nature of human interaction patterns will be governed only by openness and information theory mathematics. Once “interaction pattern managers”, “value plumbers” (or “corporations” for short) are subject to the laws of the emergent behavior they enable, the strict legality of emergent behavior will become increasingly stringent. Without a corporate entity (legal or otherwise) to coordinate or benefit from it, it becomes extremely pluralistic and unpolicing, making it less relevant.

We will begin to see a world without intermediaries, intermediaries and trusted institutions. Not only are services delivered directly from providers to consumers, but they also provide advertising, discovery, matching and even insurance. Interaction patterns arise and persist not through clumsy, inefficient legal systems and slow, rigid corporate rules, but through the flexible, nimble, and inherently adaptable emergent effects of direct economic incentives. This is the direction we are heading in, and if it delivers as well as open source software, it certainly can’t happen fast enough.

Can we benefit from this new social model? My opinion is definitely yes. As always, the benefits come from meeting human needs (perceived) or providing efficiency gains to those incentivized to recognize and deploy human needs. However, it is not yet clear what kind of model will be profitable. Don’t expect profit-making businesses to be the same as they are now. Otherwise you’ll be stuck like the people who were looking for the next Microsoft in 2000 and invested their money in VMLinux and RedHat. The big differentiators we think about today will be commercially available in 20 years, just like operating systems and browsers were in ’95.

To first understand where these differentiators lie, you need to understand what makes a product. Food for thought: What if the “goods” turn out to be vendor-neutral, open, and trustless digital marketplaces? Ubiquitous “value plumbing”, business logic constantly evolving while remaining ready for anyone to join… Bazaar Services.

May 4, 2015 Addendum: Revisited cat B, I must apologize for my abuse of Raymond’s analogy. The original work focused more on the distinction between traditional ways of working (mainly commercial software, but with some OSS like GNU included) and distributed ways of working (what we now tend to think of as open source software development) rather than strictly proprietary. . /COMMERCIAL VS FLOSS. Still, speaking cautiously, the concept of decentralization within software development is widespread and associated with open source development. Interestingly, it could be argued that in addition to OSS, some of the Agile methodologies (think SCRUM) join this general trend towards Bazaar’s self-organization, decentralization, and permissionless operations.