Let's be real. That romantic fairytale of crypto was born out of the ashes of the 2008 financial collapse. It sold a vision of utopia where everything was governed by radical transparency, community governance, and open-source innovation. It was an alluring fantasy, vowing to tear down the opaque power structures that defined legacy finance. Dreams change, particularly when looking to the often sobering needs of the real world.
That belief—that open source is the only way to achieve true decentralization—is, quite frankly, naive. It may be quaint to imagine a democracy based only on the periodic return to a town hall meeting. It’s completely unreasonable for a nation of millions.
We've all heard the arguments: open source fosters community review, promotes transparency, and prevents centralized control. Yes, these are valid points. The world isn’t black and white. Just because something can be good doesn’t mean it is most of the time or all the time or that it’s the only good alternative.
We rejoice at every positive outcome of open-source software. The operating systems that most of us use every day—Windows, macOS, and iOS—are proprietary. Are we really slaves to the big centralized tech overlords? Maybe some do, but most of us recognize the trade-offs: convenience, user-friendliness, and often, a more polished experience, in exchange for less control over the underlying code.
I’m not trying to throw shade on open source here. It's not. It’s time to admit its limitations, particularly as crypto seeks to go mainstream. The Solana Loopscale exploit led to a massive $5.8 million loss on an opaque protocol. A lot of people are using this incident to claim that closed-source systems are inherently flawed. The tidal wave of hacks and exploits still haven’t let up for open-source DeFi projects. Yet, even with their code open for public scrutiny, vulnerabilities are found. Open source isn't a magic bullet against vulnerabilities; it's just a different set of trade-offs.
Now imagine this, you spend thousands of hours designing and building a new innovative DeFi protocol, or a mind-blowingly awesome NFT marketplace. Then, your code gets copied by someone else who slaps on a new logo and undercuts you by charging lower fees. This is true for most crypto developers. It's disheartening, demoralizing, and frankly, unsustainable.
Developers don’t like the idea of having their code pirated, and who could blame them? Is it any wonder that some are looking to closed-source development for a haven to safeguard their intellectual property and labor-building innovation? It's not about greed. It's about survival. It’s about supporting the development of a healthy, sustainable ecosystem where innovation is awarded. We’re not just copying and pasting.
And what about vulnerabilities? Open-source advocates like to say that “with enough eyes all bugs are shallow. This isn't always true. Too often, those “many eyes” look only to their own opportunities. Or, they may just not have the technical know-how to identify fatal flaws. Malicious actors, on the other hand, are continually hunting for vulnerabilities they can exploit, and open-source code offers them a clear roadmap to a buffer overflow.
I would like to make an unexpected connection here: It's like the internet itself. The internet was built on open, interoperable protocols, intended to democratize communication, collaboration, and information. Yet, that same openness has turned it into a breeding ground for scams, malware, and disinformation. Do we abandon the internet altogether? No. Unlike any other technology, we innovate, we harden, we grow resilient, and we become more accustomed to the danger. Crypto must do the same.
We understand that many who are wary of the increased corporate influence into crypto share our perspective. They view it as a cowardice and betrayal of the industry’s anti-establishment origins. Let's be honest, mainstream adoption requires institutional involvement. These large corporations are able to employ the resources and expertise—a level of professionalism—most early-stage crypto projects did not have.
Closed-source development, which many corporatized interests often push for, isn’t the devil incarnate. Whatever people claim, it’s a tool, and like any tool, it can be used for good or ill. The key is accountability. Even closed-source projects should be held to high standards of transparency, with extensive documentation available, regular code audits, and open communication with the community.
So, is crypto losing its soul? I don't think so. It's evolving. The tech utopia dream of a fully decentralized, completely open world is meeting a brutal reality. It runs smack up against a complicated, cutthroat, and sometimes downright adversarial landscape.
We have to do better than the oversimplified “open versus closed” binary and adopt a more sophisticated framework. As demonstrated by Uniswap v3, licensing is a worse alternative than patents for protecting intellectual property. It pushes the community contributions to flourish. Whether the code is open or closed, regular code reviews are critical to exposing vulnerabilities.
The future of crypto depends on our ability to be creative, to pivot, to learn from our failures. We need to get real on solutions that make sense from a security, scalability, and public adoption standpoint. Open source should and will play an important role in the future of the crypto ecosystem, but it doesn’t have to be the only way forward. The soul of crypto isn’t a series of check boxes and rules to comply with. It addresses the need for a fairer and more accessible financial system—which at times requires shutting down the spigot.
The Evolving Soul of Crypto
So, is crypto losing its soul? I don't think so. It's evolving. The idealistic vision of a completely open, decentralized world is colliding with the realities of a complex, competitive, and often hostile environment.
We need to move beyond the simplistic "open vs. closed" dichotomy and embrace a more nuanced approach. Licensing, for example, as demonstrated by Uniswap v3, offers a way to protect intellectual property while still allowing for some level of community contribution. Regular code reviews, regardless of whether the code is open or closed, are crucial for identifying vulnerabilities.
Ultimately, the future of crypto depends on our ability to adapt, to learn from our mistakes, and to embrace pragmatic solutions that prioritize security, scalability, and mainstream adoption. Open source will always have a place in the crypto ecosystem, but it's not the only path forward. The soul of crypto isn't about adhering to dogma; it's about building a more equitable and accessible financial system, and sometimes, that requires closing the source.
