Is personal funding viable?
blog.gittip.com
blog.gittip.com
Here's a question: What verifiable documented successes exist in the world?
The one that always comes to my mind is Dwarf Fortress. It's not open source, but Tarn Adams has gone with the donation-ware model since January of 2007. I've been tracking those numbers since, and recently have attempted to start getting data on community size where that's also verifiable: https://docs.google.com/spreadsheet/ccc?key=0AhPaW9RBi5v4dGF...
>Instead we should expect a few people to tip a lot, and a long tail of people to tip a little.
Based on anecdotes, this doesn't surprise me, but I'd certainly be curious to have a look at hard data. I know in the case of Dwarf Fortress about 1% of Bay 12's income is from one person: me. Additionally, I'm aware of other big tippers as well.
However to get back to my original question, if folks could provide links or other sources to other successful donation-funded endeavors that aren't humanitarian efforts or fitting the typical charity mold, I'd be interested in hearing about it.
I want to see a culture of people funding each other. I want Tarn Adams to have been ahead of the curve.
What about a sponsorship component? Facilitating companies sponsoring a programmer? Their github page gets a logo or something, and they get a bit check each month. It's not a new model. Skateboarding, for example, which has no practical use aside from entertainment, often works this way I think. Many skaters earn their living from sponsorship and make next to nothing from competitions or whatever else.
If there were a major github competitor (maybe there is, I'm not so much in a position to know), the rivals might also pay these figures to work on the projects they control on their platforms. It helps Github immensely to have all these projects on its platform.
The payoff for the sponsoring company will be the good reputation it gets from that developer ecosystem. There could even be a way to connect this sponsorship to recruiting developers from that ecosystem as employees (the bonus being that they are already familiar with this project)
As a developer, if I want to make money from one of my projects, I'll charge people to use it or to buy a copy. If I can't sell enough copies to fund development, I don't see how I would ever be able to fund development with "tips."
As a user, I don't mind paying for software, and I don't think many people do. Most people realize that it takes time and skill to create a piece of software, and that the people creating it could have spent that time doing something else.
What about a site along similar lines - FridayBeer or whatever - that perks up via social media and supporters at the end of each week. You're having a knock-off drink in the final hours of your working day, or heading off to the pub and the site asks who or what made a difference to your week. Someone's work on an open source project meant that you continued earning a living. Maybe someone else was out there volunteering in the muck while you had it comparably easy in your office. Perhaps it's just a Twitter user or HN commenter who shared an appreciated article you might otherwise not have seen. Shout a beer or, if you're generous, a carton/case.
I think I've seen virtual buy-a-coffee or shout-a-beer sites, but can't remember them being a regularly scheduled thing that makes you consider who you'd like to thank in that moment.
Another idea that could work well is partnering up with some influential bloggers / open source evangelists and holding an international "Feed a coder" day, which brings awareness to the open source community and asks people to make a donation to their favourite projects / libraries / Wordpress plugins on that day.
There are a lot of Wordpress Bloggers out there who would be happy to donate to their favourite plugin authors but just haven't and this could push them over the line (this is just one community I'm quite involved with).
Are you on GitHub? Can we move this conversation there?
That's only if you're a scrooge and don't like spending anything. Since bitcoin started, I spent bitcoin on hosting and domain, t-shirt, musics, development bounties, writers, and other things that I forgot to mention.
I never spent a bitcent on mining hardware, though.
You have to remember that humanity is a not a paper wealth maximizing function. We don't exists to horde money, but to spend it doing things that we like.
Deflation increases the incentive to hoard cash. People respond to incentives. Economies based on deflationary currencies end up suffering from problems caused by this. You may not agree, but pretty much every economist does.
Do you have an example of a vibrant economy based on a deflationary currency? I have several historical counterexamples.
I'm hungry... really f%!#ng hungry, right now. I have $10.00, which - today - buys me 2 hotdogs and a soda. But, if I wait a year, that same $10.00 will buy me a nice steak, some corn chowder, a side of sweet potato fries and a margarita. What do I do? Hmmm....
No doubt... just emphasizing the point that we aren't dealing with absolutes here. People do spend money, even with deflationary currency. I'm not saying deflationary currencies are a good thing, or that there aren't some ramifications. But I think some bitcoin critics overstate the importance of the deflationary aspect, that's all.
In other words, in a deflationary economy there's less incentive to invest in productive activity and more incentive to stash cash under the mattress.
And it's not just held stock that works this way - it's also capital investments like that new more efficient widget-making machine.
I also happens to disagree with the idea of deflation being necessarily bad for society or actually discouraging spending and investment. I contend it that it only shift the timeframe longer into the future, and saving enabling people to buy higher quality lasting goods.
With inflation, it encourages short term thinking and shorter term investment.
Let calculate the revenue a miner would get if they win all the blocks:
50 bitcoin every 10 minutes mean 300 bitcoin, which mean 7200 bitcoin a day. The price of a bitcoin at the time I am writing this is 6.54 USD, so the total revenue is 47,088 USD per day.
That mean, assuming a miner can win all blocks at 50 bitcoin forever assuming the price and difficulty stay the same, he can afford to pay an electric bill of 47,088 per day assuming that the price hold stable. This equals to 17,187,120 USD in revenue every year.
The market cap of bitcoin is only 60,951,475 USD, which mean miner revenue equals 28% of the market cap. However, most economic activities are certainly not miners, but actually trading bots and speculators across exchanges. In the MtGox USD alone, about 8.7 million dollars worth of bitcoin were exchanged in 30 days. You can also add in the various economic activities other than trading currencies, such as virtual goods, hosting, ice creams, t-shirts, porn, illegal drugs, etc.
You can conclude that the miners are guaranteeing more than just revenues for themselves, as the various activities in the bitcoin economy which actually probably dwarf what the miners are making in term of revenues. As far as being actually efficient method of security for a currency? Probably not right now, assuming that security measures actually scale economically. It could be that the actual electricity cost grows slower as more and more efficient method of hashing are found.
> which means that the electricity used up by the Bitcoin network would be much larger on any reasonable measure than what you need to maintain other currencies
This is only true if the other currencies are fiat money. For a non-fiat currency, it is necessary that either (i) it is hard to make (or people will just make enormous amounts and its value will go away), or (ii) it has intrinsic value.
Since paper money is backed ultimately by the threat of violence against those who counterfeit it, wherever they may be in the world, we must include some fraction of our defense spending as well. In fact, the more valuable the currency, the more must be spent on defense to protect it. Isn't this closely isomorphic to your dichotomy?
I too have made this argument several times and I have gotten similar nonsense in response.
I recall reading a story about some guy who was visited by police as they thought he was running an indoor pot growing operation, only to find after searching the premises that he was a bitcoin miner. It takes quite a power surge to draw that kind of attention from police. Bitcoin is geeky, and maybe it's idealistic in some good ways, but it's not "green" and it's not practical.
What happens when there's a loss of electricity?
Do we fallback to paper currency then?
For merchants, just like if VISA/Mastercard/Debit card, etc., goes out due to power problems (and there there is no battery backup or local generation), a merchant can't accept payments until power is restored.
As far as power outages for those mining -- there is no disturbance to Bitcoin even for lots of power distruptions. If the entire world goes dark, your inability to spend bitcoins will be the least of your problems.
This things solve the computational work at a couple orders of magnitude greater than GPUs (the currently prevalent mining hardware) does.
So instead of 70% of the cost of mining going to pay for the electricity, it will be 10%, and the cost of the technology consuming the remaining 90%. I.e., in terms of total kWhs consumed for Bitcoin mining, we probably are already past the peak.
One single bank building in Manhattan consumes way more power than Bitcoin ever has.
You justify <things you don't like> with <anybody with expertise will hate>. This is a total non-starter.
(For the purposes of this comment "familiarity with economics" should be understood to mean: has so much as shopped in a grocery store).
Very low standard it seems. I shopped in a grocery store.
Edit: My comment isn't US-centric, obviously, since I don't know where any of you hail from. Trolls.
It's a currency because people actually use it as a currency. It doesn't mean universal acceptance. Did you ever tried spending yen or peso in an American supermarket?
If you ever been to porcfest this year, you will know that a lot of vendors actually accept bitcoin along with precious metal.
Oh, wait, I can't spend those at the grocery store either. I guess those aren't actual currency either. Silly me!
If not (and likely not, considering PayPal does not allow for their payment network to be used for "pre-sales"), then GitTip can only charge for the actual amounts tipped (and claimed by the donation target).
Right now, let's say I'm willing to tip $150 per year. I can then donating $0.25 to ten people. Since I carry no balance myself (from received tips), that means every Friday I get a charge for the amount I tip. So I would see a charge of $2.50 (10 X $0.25) plus $0.30 plus ($2.50 X 3.9%) = $2.90. So that is a 16% payment network fee.
Certainly this can be optimized, but Bitcoin doesn't have such high fees. The sender pays the fee, and even then it is a fraction of a penny. And the conversion from Bitcoin to USDs is generally under one percent.
Cash (USDs) can be received once each week by GitTip as an ACH direct deposit (using BitFloor) or through Dwolla (using Mt. Gox, Intersango or Camp BX) so easy cash-out methods are covered.
And there are no chargebacks.
So regardless of your politics or what you want to use as a store of value, Bitcoin solves problems very well. Especially for micropayments problems like this.
Also, allow tips of any size. $2048 or $4096 would not be crazy.
The title asks "Is private funding viable?". The answer is no.
True, and Gittip couldn't exist without corporations:
http://blog.gittip.com/post/25215503687/corporations-and-ope...
Can we do even better than "most of the time pretty much"?
> The answer is no.
What makes you say that?
25% - I haven't needed that yet 75% - I don't have the time .00001 % - That is completely technically infeasaible
(Numbers may not add up to 100 after rounding).
I'll write on my personal blog later today why you should care about all of that, but that's the view from 10,000 feet.
I've been building products based on open source technology for the past 10 years. However, I've seen a HUGE increase int the diversity and the amount of open code I've used over the past 3 years! I feel personally indebted to a number of people that I've never met, because I'm using their work! Therefore, I'm happy to tip them a modest amount weekly (what little I can afford)
I love the idea of gittip, and I think it could make "open source developer" a viable job... BUT I don't think it's going to happen overnight. And it may not even happen while individuals are the only ones tipping.
So, what if companies could (or would) tip? There are probably a number of small companies that use open source tech, who can't afford the salary of a mid-level silicon valley engineer, but could afford to pool their resources to support great open source projects (side note: $160k/year is a very comfortable living in the Southeastern US, and probably elsewhere not right on East/West Coast).