To summarize, what I wanted to ask is the following:
IS THERE A WAY TO KEEP SUCH IMPORTANT SOFTWARE OPEN SOURCE (to be able to vet it) WHILE STILL PROVIDING MEANINGFUL FINANCIAL INCENTIVE TO DEVELOPERS?
luka: These are good questions. Let me point you to a book that I think you will hugely benefit from reading -
Against Intellectual Monopoly. Contrary to popular belief, intellectual property (patents, copyrights, and other forms of "closed source" design) have not accelerated human progress, they have slowed it down.
It is true that division-of-labor and specialization are an indispensable ingredient for human progress, including - or especially - in the development of new technologies, like Bitcoin. And in order for division-of-labor to obtain, people have to have a way to be paid for their labor in terms of a good that is directly valuable to them or can be readily exchanged for goods that are directly valuable to them. This is one reason why
money is so important - it greatly facilitates the division-of-labor by allowing many different kinds of people with many different kinds of skills to be paid with something that has no use-value in itself (you can't eat a paycheck) but can be instantly exchanged for almost anything that
does have use-value (you can use your paycheck to buy a meal or clothes or whatever).
Mozilla, the Linux Foundation, certain distributions of Linux, and many other companies work with open-source software as an integral part of their business model. Richard Stallman prefers the term "free software" but distinguishes "free" as in
free speech from "free" as in
free beer. Free software is really about the former, not the latter. If you really think about it, being able to copy and run an installer is not the culmination of a software business's product. Microsoft, Apple and all the old-school software houses work on this false notion that the software product is really the
copy that gets installed. But then, their
actual products put the lie to this notion with all their insecure, automatic, background updates that have to be run continually to prevent all kinds of catastrophic scenarios in their end users' devices. In short, software is not really the physical bits, it is the entire package of design that is sold to the end-user.
If you take the free software concept seriously, it will change how you think about software completely. All the individual tools that get packaged into a Linux distribution are provided to you free of charge, if you use a gratis Linux distro but, more importantly, they are
free to use as you like (including for building your own software). You can build very powerful software systems just from these ingredients because these tools are all Unix tools or tools that follow the
Unix philosophy. But suppose you want to write your own, custom factory management tool. You have everything you need right in front of you. But even if you have the requisite skills (software engineering), you do not have the time because you have a factory to run! So, what do you do? Well, you pay someone to use this
free software system to design and build a factory management tool for you. Do you see that the free software does not hinder but only facilitates the division-of-labor, in this case? You might reason, "Ah, but when he has finished writing it, I cannot make any money off of it because when I release it on Github, it has to be GPL licensed because it uses GPL'd software." But that's missing the whole point. First of all, no one is compelling you to release it. If your trade-secret factory-management software is such a huge boost to your business, then you will simply keep it to yourself and not share it with the world. Profit! But if you do release it, then you should have designed it in such a way that other software engineers can build and extend on your work, that is, you should have designed it in a way that is consistent with the Unix philosophy. Now, someone can come along and re-purpose your code for something else entirely that you never thought of - perhaps it turns out that your code is super-useful in oceanography applications, something you had never considered in your wildest imagination. But closed-source software
guarantees that this kind of innovation through repurposing of code can never happen. The free software philosophy boils down to this assertion: the public good created by the repurposing of code is so immense that the private good to any one individual of keeping their code closed-source is easily outweighed (in principle, they could be paid the difference out of the public good) so that the only sensible way to keep code closed-source is simply to retain it as a trade-secret (never to release the software to anybody and only use it yourself).
