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How do copycat projects deny resources and users from projects with a proven history of creativity and disruption? In this article, Kee Jeffreys explains how to look forward to a more mature blockchain market, only true innovators will survive.
From the emergence of blockchain technology in 2008, opportunities for developers to build on publicly available code in order to create new technology infrastructures and bring new products and services to the market have grown exponentially.
The ethos of the blockchain sector of open source development has shared the innovation, transparency and accessibility is far from the attitudes surrounding the main inventions historically: think of the War of the Currents, the dispute over patents around the invention of the telephone and also to the most recent feuds among known technological giants. While allowing developers to keep information accessible is a number one priority, the industry sees its fair share of imitations without innovation. This betrays the spirit of the open source movement and can have negative effects on the whole ecosystem. Looking to the future in a more mature blockchain market, only true innovators will survive.
There are many examples of projects that have taken open source and implemented new developments to the benefit and advancement of the blockchain industry. DASH, one of the most popular cryptocurrencies, was built as a fork of Bitcoin. It has incorporated a new governance structure, however, built around masternodes to incentivize users to protect the decentralized network and enable new features like InstandSend and PrivateSend. DASH has also introduced new block reward systems, with 10% of the block premium dedicated to a network development and promotion budget.
This allowed the DASH network to fund new initiatives and developments on the platform internally – while Bitcoin relies on funding from external groups such as Blockstream. Likewise, Loki used Monero as the basis for creating additional features far beyond anonymous transactions. By allowing users to create privacy-focused applications such as online marketplaces on the Loki blockchain and to access the Internet anonymously through the Loki mixnet, Loki started out as a tough Monero stump, but introduced new features to bring added value to the market .
Despite these examples of creativity and development based on open source projects as a basis, the blockchain sector hosts many "script only" projects, which emulate existing products without further innovation. Many projects have simply copied the underlying technology and business model of Bitcoin, Ethereum and DASH – cloning governance structures and technology frameworks without any clear justification for the benefits these models present to users. "By copying and pasting" the code of successful projects, new initiatives risk inheriting the weaknesses of existing platforms without advancing the community.
For example, many projects have replicated the DASH masternode network – however, while this type of governance architecture offers some advantages over the fully decentralized nature of the Bitcoin protocol, the creation of Proof of Work blocks can leave the small-cap coins in the market open to 51% attacks. Further developments, such as the introduction of new difficulty-adjustment algorithms and hashing algorithms, can help nascent projects overcome some of the security problems associated with Proof of Work, but it is a fundamental issue faced by naive forks.
Looking at the dark side of the open source ecosystem, the result of numerous cryptocurrencies and almost identical businesses can lead to fragmentation of funding between original innovators and only copycat projects, that is to say those projects with a proven history of creativity and interruption are denied the resources and users they would otherwise have benefited from. An obvious example is when there are a number of forks for an original blockchain protocol, without clear technological progress. Bitcoin's hard forks that have generated Bitcoin Diamond, Bitcoin Gold, Bitcoin Private, for example, have only added limited value to the market, fracturing the Bitcoin community and the market capitalization of the currency.
With the maturing of the market, it is hoped that the spirit of openness and transparency within the blockchain sector will prevail. In nature, evolution ensures the "survival of the fittest" – or those more adaptable to change. This is true for any industry that tries to evolve and change over time. Most projects only copycat will gradually vanish from the market as users and investors become increasingly discerning about the projects they support; those that bring added value or services to the market will find long-term stopping power.
