When Facebook launched 20 years ago, most users didn’t give much thought to how it worked beneath the hood, much less to how its code was written and audited.
Two decades later, many of us are forced to become more sophisticated consumers of technology because of widespread bad faith practices on the part of tech companies. We are paying attention to the ways apps collect and handle our data, how they approach privacy, and even who their major stakeholders are.
Lately, the term ‘open source software’ is being used more frequently when talking about technology in general, and about crypto specifically. While we are used to thinking about security and privacy in our software, what does it mean for users if an application is open source? What does it add to the user experience, and does it really matter?
What open source means
When there are technological advances and new software products are launched, the creators can choose the terms on which to share their innovations with the world.
Most of the time, we see companies use the proprietary model, which means the software code is owned by the company and hidden from the public. Individuals and other companies have to pay to use the software, it can’t be modified to fit specific user needs, there is no way to know how it really works and how it uses data, and users are completely dependent on the company in terms of access to the application.
Under the open source model, creators publish the code so it is accessible to anyone who wants to view it. Computer science students can study it to improve their skills, bug hunters can audit it for security vulnerabilities, developers can build on it to create their own products, and users can download and use it for free (and without giving up their data!).
The open source model is a uniquely collaborative approach to building software. It not only changes the tech culture from the inside, but also has an important impact on what users can expect from the applications they use.
How open source is used in crypto
Open source software has been particularly embraced in crypto. There are several reasons for that.
Decentralization is one of the main principles of crypto. It is both the way blockchains operate on a technical level, and the way the global crypto community operates on a human level. There is no centralized authority that has control and gives - or withholds - permissions. That’s why proprietary software and gatekeeping can be seen as antithetical to the crypto culture.
Transparency is another important value of the crypto ecosystem. When anyone is able to view and audit the code, projects can invite members of the community to find bugs in the software, thereby establishing trust and benefitting from expert knowledge. Meanwhile, users can feel confident that an application is not hiding any shady dealings under the hood.
One of the foundational goals of crypto is to remove barriers and shortcomings that exist in traditional finance. Open source software helps achieve this by making decentralized finance products compatible and composable. When projects build upon each other’s code, they can make their services work well with other, existing applications. As a result, users can manage their assets across multiple platforms, wallets, and financial tools without limitation.
Cryptocurrency is not just another TYPE of financial asset. It’s an entirely different WAY to approach finance, and open source software is an important part of making it possible.
Why you should only use an open source wallet
When choosing a cryptocurrency wallet, security is the most important consideration for most people. So how does open source software contribute to security?
- As mentioned above, the transparency of open source code allows it to be examined by anyone, so it’s impossible for a wallet to hide bugs, poor practices, or shady operations with users’ assets or data. A team’s decision to make their code open source is a statement of confidence in their product and an expression of good faith to their users.
- Usually, open source code can be downloaded for free and run completely client-side. Users can be confident that even if a wallet company stops operations, they will never be locked out of their assets.
- A company that makes their code open source is encouraging innovation and growth in the space by allowing other developers to build on the existing tech. This encourages competition and lowers barriers to entry, which results in improved products for all end users. That’s why supporting open source products makes the entire crypto space more secure and user friendly.
- Finally, most of the time open source wallets are also self custodial, which is another extremely important aspect of crypto wallet security. Learn more about that in Why Self Custody Matters and Which Crypto Wallets Are Secure.
Ready to get your own open source, self custody wallet? Give MEW wallet app or Enkrypt browser extension a try!
