This means that any independent programmer or company can study it and make changes and extensions of any kind.
But this approach opens the way to “free riding“, and poses the problem of monetizing open source projects.
Vitalik Buterin, together with Zoe Hitzig of Harvard University and E. Glen Weyl of Princeton Faculty and Microsoft Corporation, has analyzed the problem from an economic point of view, extending the problem of free riding not only to open source development but also to public goods, understood in the sense of Hume, that is, goods whose use cannot be precluded to any member of the community.
The solution proposed by Vitalik is radical and consists in “Liberal Radicalism (LR)”, a line of code that would increase the funding of projects incrementally depending on the number of participants and the degree to which they care about the project in question.
Buterin followed the Quadratic Voting theories of Eric Posner and Glen Wey, which present a mechanism whereby individuals do not have a vote but a budget of vocal credits, so they can express the preference and its intensity for each decision.
So, if an individual had a strong interest in a project, they could spend all their credits to get that project up and running.
This has the consequence that the additional credits spent can intensify the support and therefore have a higher cost than the first one.
The paper written by Vitalik, entitled “Liberal Radicalism: Formal Rules for a Society Neutral Among Communities“, translates this voting system into a mechanism for financing public goods in the sense described above: the financing of each project is proportional to the square of the sum of the square roots of the contributions received by individuals.
The scientific proposal is a rather complex mathematical concept, it is extremely interesting and, if applied in the crypto field, would consist in an evolution of the current financing mechanism of blockchain projects, liberal donations and ICOs which would have a strong impact on the current utility and security tokens.
Obviously, LR implies the certain identification of all participants, the voting/financing mechanism does not allow anyone to remain anonymous or pseudonymous.
This contrasts the ideal of Eric Hughes’ Cypherpunk’s Manifesto which is the basis of the bitcoin blockchain.
Many of the authoritative anonymous developers, who contribute so much to the bitcoin project would be faced with an ideological and ethical dilemma.
Let’s consider the journalistic field, more precisely investigative journalism, the application illustrated in Vitalik’s paper could catch the attention of many insiders.
Certainly the trade-off applied to some public goods, such as public infrastructure, would be in favor of the application of the LR method of financing because it allows highways, for example, whose usefulness is decided mainly by those who contribute to them, and no longer on average proportional to the utility itself; here privacy would not be a value to be preserved.
The mathematical resolution of the problem of free riding, proposed by Vitalik’s research, goes well with the application of smart contract technology.
From the economic point of view, it is one of the most effective solutions to the problem, but it assumes an idea of plutocratic society, so dear to the radical liberal groups, not easily acceptable from the social point of view.