One of the problems with crypto is people treating it like fairy dust. There are remarkably few, perhaps vanishingly so, business models that do not work centralised that do decentralised.
This is one. What is the pay-out? Who makes what guarantees? How are they enforced?
If a business plan requires crypto—as opposed to being enhanced by it—it’s probably dead on arrival.
1. OSS users pay a monthly premium for insurance on the software (incl transient dependencies) that is critical to their business.
2. Part of the cash flow from premiums is pooled into an insurance fund that pays interest to OSS developers. The rest is payed out directly to OSS devs.
3. If there is a bug in an insured OSS project, policy holders have a claim on the pool. The magnitude of the claim depends on the severity of the bug and the time it remains open. Future payouts to the OSS project with the bug are directed to the fund until the payed out insurance benefit is covered.
The hardest part is coming up with a decentralized consensus mechanism for establishing the existence, severity and resolution of bugs, but there is a lot of experimentation going on in DeFi to solve similar problems.
As to why it should be decentralized, it's the same reason OSS is decentralized: you don't want a single actor to control OSS funding.
edit: wording
You’re replacing a single actor you can sue in court with a dynamic, pseudo-anonymous committee one can lobby that will make its decision based on rules or whims. That sounds like a step backwards.
Separately, why would anyone pay the premium? If you want a bug fixed and are willing to pay for it, you’d get the job done faster hiring the dev on freelance.
Swapping this to a simple insurance model exposes the flaws. Unfortunately, there is a lot of this going on in crypto. (Though I am of the belief that people are free to lose their money, as long as it doesn’t become a political problem.)
This is exactly the problem that decentralized oracles are trying to solve. Consensus courtesy of cryptography and game theory.
> Separately, why would anyone pay the premium? If you want a bug fixed and are willing to pay for it, you’d get the job done faster hiring the dev on freelance.
Nothing solves bugs faster than the original dev being financially incentivized to fix it ASAP.
This solves the vote tallying problem. But that’s not the real problem. Trusting the people making the decision is. Cryptographically guaranteed kangaroo courts don’t help anyone.
OSS isn't decentralized at all, there's always at least some group of core devs who hold the commit rights and who make releases. And they will want to control their funding.
If there was a central entity controlling OSS funding they could for example prevent forked projects from succeeding.
That's the thing, on the internet, simple old fashioned money is not like simple old fashioned money. Keeping accounts and transferring old fashioned money between peers on the internet is not trivial.
Discounting the on-boarding problem, crypto is way closer to cash than payment processing networks like Visa, Mastercard, Paypal. Accepting crypto for any kind of work is trivial, you just generate a standard address/QR code that can be read by any other standard wallet, and receive a standard crypto that can be exchanged freely.
Start a Patreon-like business where corporations/users can sign up to give a monthly donation-subscription-contribution to a slew of OSS developers, anywhere from $1 / mo to $$$. Reduce the friction of financially supporting every tiny project you make use of. Throw in a nice suite of uniform communication channels for bug requests and version announcements.
OSS dev: I want to make a living from my OSS work without starting a business around it or seeking employment.
Insurance usually goes the other direction. Large organizations can amortize risk. Individuals need to mitigate risk. Having somebody buy insurance on my code makes me less likely to want to release it rather than more likely.
OSS devs would risk future earnings only.
All you did there was state the basic tenet of capitalist wage labour, except no taxes.
There are some solid ideas behind cryptocurrency and perhaps your example is an illustration of how those good ideas could work. Many of the proponents of cryptocurrency describe such use-cases and it seems perfectly sound and air-tight on the surface.
But the current reality is that the OVERWHELMING use-cases of crypto-currency are wild get-rich-quick shell-games, illicit trade and tax-avoidance schemes. This is showing no signs of sobering up, in fact it has become worse. People keep saying that it will "settle down" but there is NO EVIDENCE for that.
The truly disturbing thing about cryptocurrency is that it reveals the possibility that "money", as a concept, is NOT necessarily a medium to exchange goods and services. It is something much more complex and fluid. Cryptocurrency, as a currency, takes all the awful and volatile hidden features of money, accelerates them and makes them overt and central to it's operation.
I think many of us find that idea repulsive. If crypto (as it currently exists) becomes the money of the future, it will mean that the vast majority of the population who earn money by exchanging their labor will find themselves at the mercy of wild and random fluctuations in the value of their labor. Their labor will mean less or more not because of what they actually do, but because of completely unrelated fluctuations caused by "millionaires" and institutions acting on whims, or even joking around. You could argue that it happens now with dollar money, but that kind of fluctuation has been almost always slow. Crypto promises to make crazy fluctuations the norm.
Vitalik Buterin, for example, famously donated ~1 billion "dollars" towards India COVID relief. Except that it wasn't really dollars, it was some cryptocoin that he was gifted ("shiba-shitto" or something like that). That value plummeted almost immediately. I don't know what it is now, it seems the news orgs have lost interest in the story. I do hope that India COVID relief got something out of it, but would have been better if they didn't have to hire crypto people to process that "money" into something useable when they're dealing with a pandemic.
I agree with you btw just wanted to link to context
[1] https://etherscan.io/tx/0xb65bcbb85c1633b0ab4e4886c3cd8eeaeb...
Yeah, the way I presented the idea above, it's closer to a cooperative than an insurance company. I think it's more important for the buyers of the "insurance" to get their bugs resolved quickly than it is to receive monetary compensation, so the purpose of the payouts is really just to incentivize OSS developers to resolve bugs quickly by penalizing their future earnings if they fail to do so.
But if real insurance with real payouts is desirable, then that's solvable by raising capital for the fund in an ICO and directing some of the cash flow to investors. If I'm not mistaken this is how you'd start an insurance company today: you'd need to meet some capital requirements before being allowed to sell insurance to the public and you'd do that by raising money from investors.
What are those DeFi projects? If someone can figure out such high level consensus mechanisms that would be fascinating.
Pretty much. Getting real world data like this onto a blockchain such that the representation of it on the blockchain can be trusted is as yet an unsolved problem. Blockchains are great at managing data created internally in a trustworthy way, but not data created externally.
1. users pay monthly fee/premium
2. part of that is kept in a pool, part is payed to the developers
3. when bugs happen, funky stuff happens with the pooled money.
See, I didn't need any crypto for that.
Maybe one day crypto can reduce the legal overhead, maybe not.
The hard part is getting people to actually pay for things that they could have for free.
Do you know what the reminds me of? RedHat. RedHat sold (and still sells, I guess) Open Source software together with maintenance contracts (pretty close to what you call insurance).
They needs lots of marketing and sales staff to attract customers. Who replaces the marketing and sales people in the crypto world? Who does the convincing?
I think this doesn’t make any sense but maybe I just don’t understand.