What is Cardano?
For most users, Cardano is like a service that allows them to send value. In order to use this service, they need to have a blockchain wallet on their computer. The wallet is able to communicate with the Cardano network. It is also possible to use DeFi services, in most cases, through web browsers. Wallets represent users and are essentially a middleman that allows them to use DeFi services. Service functionality requires interaction with the Cardano network.
Cardano is a public blockchain network. Cardano works thanks to volunteers from all over the world who have installed the software created by the IOG team on their computers. From the software developers’ point of view, Cardano is a computer program that executes certain processes that enable the network to run.
In the context of this article, think of Cardano primarily as software.
What is Open-Source?
The term ”open-source” originated in the software development industry. It refers to software that anyone can inspect, share, control, and modify. It represents a specific approach to creating computer programs that emphasize the values of transparency, collaboration, and community-oriented development.
Cardano is an open-source project. This means that the source code can be found in the publicly available GitHub repository.
Anyone in the world can see how Cardano is developed, who is involved, and how actively. Independent developers from around the world are able to look at the quality of the source code, and adherence to best-practices standards and processes. We’ll talk about the benefits later.
By contrast, there is a proprietary software development approach. It is also called “closed source software”. The source code of such a program can be inspected or altered only by its owners. In most cases, they are private companies that strive to monetize the software.
A fundamental difference in trust in software
How does open-source and closed-source software differ? In both cases, the software is developed by a team of experts and software developers. The difference is that in the case of closed-source software, only a closed circle of people understand how the software works. These are usually employees of a private company who are not allowed to talk publicly about the internal affairs of the company. From the users’ point of view, this means that they have to trust the company. If they have questions, they must ask the company representatives and trust that they are telling them the truth. Companies tend to keep details about how the software works because they see it as a competitive advantage or they don’t want someone to easily copy specific algorithms. Often, revealing details about how the software works could spark public disapproval. The functioning of the software is also kept secret for security reasons.
It’s an open secret that the primary goal of social services is to keep your attention for as long as possible. Algorithms, therefore, present you with information that touches you emotionally. You may feel the need to learn more, respond, or express yourself in some way. There is also debate about the ability of algorithms to influence your opinions in a targeted way.
Private companies are profit-oriented. Their goal is to monetize your attention, and it is certainly not in their interest to publicly disclose how they make a profit. Moreover, it is not possible to obtain evidence that firms are abusing their position.
Cardano is a public blockchain network that needs to be profitable to ensure security and decentralization. Unlike private companies, Cardano is a mission-oriented project. Therefore, it primarily serves the public. The goal is not to profit for the benefit of a small group of people. The aim is to perform a public service well and to raise funds in a completely transparent way to reward pool operators, stakers and finance its further development.
For the network to gain public trust, it must be ensured that everything works as publicly advertised and as the public expects. This can only be achieved by making the source code open and allowing anyone to look at it. People can then trust the technology directly through the source code. There is no need to trust the team or even the company so much.
Experts from around the world can examine the source code in detail and point out any problems. This means that no secrets can emerge that could benefit a small group of people or be misused. People continue to have confidence in the team and in their ability to maintain the source code and innovate. However, everything can be checked by the public. Scrutiny is what is completely lacking in the case of closed source software.
Why Cardano is an open-source project
There are many good reasons to build Cardano as an open-source project. As described above, first and foremost it is people’s expectations. It would be suspicious if a public blockchain network had closed source code and no one knew how it actually worked. A decentralized project must be inherently open source, as there must be no third party that people can trust. Every blockchain network has a team of developers. This is as true for Cardano as it is for Bitcoin or Ethereum. Each project has defined rules for maintaining the software and suggesting improvements. It is important that everything is as transparent and open as possible.
Blockchain networks are decentralized, but decentralization at the software development level is difficult, if not impossible. Transparency and openness is the only way to bring development closer to decentralization.
Let’s now look at the other benefits of open-source projects.
One of the biggest advantages of open-source projects is the high level of security. By its very nature, open-source software enables anyone to look for and propose fixes to security flaws. Proposed fixes are also peer-reviewed. It opens the software up to a large base of inspectors who can quickly detect issues. Cardano, similarly to many other open-source projects is much more secure than proprietary solutions.
Closed source projects might contain exploits that nobody knows even exists. If a security flaw is not noticed by a team that may be small or does not have domain experts, there is no one else in the world who can point out the flaw. In general, the more experts that find a code to be secure, the more certain it is. In practice, it is very easy to overlook a security risk, or not be aware of it at all. Hackers are constantly inventing new ways to break security. The only way to deliver secure software is to stay one step ahead of the hackers.
Another good reason for open-source is to prevent the existence of backdoors that are implanted for a reason. In the case of closed-source, nobody can verify that they do not exist. If a team knowingly creates backdoors in their own software, they are very likely to use them to their advantage. Backdoors can allow the team to stop or limit functionality, or gain access to something that should remain in the possession of users. The team essentially exploits the advantage of the middleman.
It may be that a team creates a backdoor deliberately but does not plan to exploit it to the detriment of users. The team may want to be able to stop code execution in the event of some serious problem. For example, in the event of a hack. That’s a legitimate request, but from the users’ perspective, it’s a risk. If the software has a backdoor, the team should be transparent, tell the users about it, and clearly declare under what circumstances it will be used.
Backdoors can have a character of security vulnerabilities. The team is not aware of the vulnerability, but someone else notices it and exploits it for their own benefit. Therefore, it is important that anyone in the world can look at the source code independently of the team and point out vulnerabilities. It may be a vulnerability that is difficult to exploit, but under certain circumstances, it can be done. In that case, it is good for the community to be aware of that and demand better security. The team will then design and implement a better solution.
Continuity of open-source projects is their other big advantage. These projects will exist longer if the community finds them useful. Copies of them can easily be created. If a private company decides to stop working on a closed-source project, it is no longer possible to fix or improve the program. It will naturally lose its users that will be taken over by competitive solutions.
In the case of open-source projects, this is not a problem because the community owns the source code and can continue development. Cardano is in the hands of the community, so should Charles Hoskinson and the IOG team decide to leave the project, although this is unlikely at this stage, Cardano would continue to be developed.
While it’s easy to take Cardano source code, or parts of it, and use it in another project, there’s no need to fear the competitive environment. The community generally uses the original version, and copies don’t have as wide a user base. The community can’t be forked as easily as the source code. On the other hand, if a better version of Cardano is to be created, it is actually a good thing that users will start using it. Evolution is healthy and there is no point in resisting it by keeping the source code closed.
Another benefit of open source is that experts can analyze the behavior of the program and explain it to the general public. Thus, no one needs to doubt the behavior of Cardano, its security, or decentralization. If an expert found any problem, he would bring it to the attention of the community. Other experts could express their opinion. So, it is difficult to claim something that is not really true. In every community, there are respected experts whose opinions are listened to by the community.
Public source code forces individual developers to deliver quality work, and adhere to code styles and processes. If a developer knows that the whole world will see his work, he will be eager to do it well. The peer-review process will ensure quality. A security audit is an extra assurance that there are no critical security flaws in the code.
Scientific papers are also public
The IOG team also publishes all scientific papers related to Cardano and other topics related to blockchain technology. It is evident that the team favors technological progress and the desire to promote decentralization in society over self-interest. Scientific research is an expensive process requiring time, money, and domain experts. Thanks to the IOG team, humanity will forever know how to build a working Proof-of-Stake mechanism.
No one today knows for what project this knowledge will be useful. Proof-of-Work was originally created as anti-spam protection. At the time of its creation, no one knew that it would one day become a network consensus for Bitcoin. Bitcoin would never have come into existence if many scientists had not published their scientific papers on asymmetric cryptography, hashing functions, distributed networks, blockchain, and other topics before its creation. Bitcoin was created on the basis of previous scientific knowledge. It has opened new doors and research continues. The new knowledge will be used in new projects including Cardano. The IOG team knows what technologies are needed for the Cardano mission, so they can steer the research in the right direction.
Published scientific papers have similar advantages to published source code. Anyone in the world can look at it and provide feedback to the team. That is, to look for flaws in them, or to confirm that the conclusions reached are correct. Other scientists can build on the work and continue further research. The results can then be used by the IOG team. It is smart to publish scientific papers because of the feedback and the possibility that someone will take the research further.
The availability of scientific papers and the source code will enable other projects to emerge and significantly advance technological progress. It means that it is not necessary to fund the same or similar research from scratch. The IOG team has solved many complex technical problems and the results are available to the world for free. For example, the Polkadot project used Ouroboros Proof-of-Sake. The team didn’t need to reinvent the wheel, they just needed to verify that the PoS they adopted worked as intended. This is quite common in the open-source world. An IOG team may one day use the work of another team. All projects support each other in this way.
Even DeFi services should be open-source
It’s good to remember that any software you use within the decentralized industry should be open-source. This also applies to DeFi services that are developed by teams that are independent of the IOG team. The source code of all decentralized exchanges, lending platforms, NFT markets, and other services should be open source and audited by an independent third party before the service is launched.
Some teams believe that they do not need to publish the source code and that a security audit is sufficient. This is a very dangerous approach. It basically means that the source code is seen by, say, 5 developers and then one security company where 2 other experts look at the code. Nobody else knows how the source code actually behaves and there could still be security flaws and backdoors in it.
A security audit can provide a high degree of assurance about the quality of the source code, but it is still not 100% certain. User confidence in a closed source project may be lower.
Teams may be tempted to delay publishing their source code because they have been working on it for some time and don’t want someone else to easily copy it and use it for free for their own project. It may be that the team promises to release the source code after some time when the service has become established in the market. The team’s motivation for this behavior is understandable, but undesirable in a world of decentralization.
It may be that the team wants to deliver their solution to the market quickly, so the source code is not well written, or the team is aware of some potential problems. In other words, the team may try to mask the reality and bet more on marketing than on quality. Users should always demand that the source code is open and community experts can comment on the code.
From text editor to cryptocurrency and beyond
The software has changed the way the world works. Before, people had to do everything by hand. If they wanted to keep a record, they had to write it down or print it out on paper and then carefully store it in an archive. It was a laborious process. It was equally difficult to find the information and reuse it. Technological advances have made it possible for any of us to record any data digitally and easily store, search, sort, and even encrypt or analyze it.
Computer programs are powerful tools. No wonder IT companies develop them and profit from their sales. We all use some kind of operating system, text editor, or player. With the advent of the Internet, programs have started to emerge that use communication protocols to function. This has allowed people to communicate with each other instantly over a distance. In the beginning, only written form, today video calls are common.
Social networks are also essentially just software and network protocols. Big IT companies have created services with a strong network effect, essentially giving them some power over all users. To maintain control, their software is often closed-source. No one can take advantage of corporate knowledge and easily copy the service. Companies hold on to power through their technological dominance. Dominance can always be abused to one’s advantage.
New communication protocols and cryptography have given rise to internet banking. We can talk about the first digital money. Choosing a bank basically means choosing a web service and a mobile application that the bank will provide you with in order to use your money. You are placing your trust in a government-regulated financial institution. Banks are centralized and therefore can also abuse their dominant position.
Cryptocurrencies came up with the concept of decentralization and have been open-source from the start. Both are extremely important. Decentralization allows us to get rid of inefficient and unreliable intermediaries. Instead of trusting an institution, or a small group of people in charge of an institution, we can put our trust in the source code. This code is run by volunteers around the world, so instead of individuals, we trust a whole group of independent people. In addition, each of us can be the one to run the software. Just install the Daedalus wallet, which is a Cardano full node that allows you to interact with the Cardano network without intermediaries.
If you are to trust the source code that is used to create a full node and blockchain wallets, it must be open-source and in the hands of the community. Closed source code leaves control to someone who can abuse their position. Never trust a project that has closed source code. The team may have bad intentions, and no one independent from the outside can confirm or deny this.
Fans of decentralization are often also proponents of open source. Clearly, as cryptocurrencies grow in popularity, the pressure to push for decentralization and the preference for open-source projects will grow. The pressure may one day be so great that the current IT giants will have to adapt to it. This will be difficult, as the loss of control over source code may result in reduced profits.
It doesn’t make sense to use cryptocurrencies, keep them in your own wallet, and be forced to give up control in case you want to lend them to someone for interest. Imagine having to lend your ADA coins to a centralized bank at 5% interest. This is completely contrary to the whole concept of decentralization. It makes sense to expand the possibilities of decentralization and create trustworthy financial services. Smart contracts essentially expand the possibilities of decentralization by allowing programmability. It is possible to create a bank that is completely transparent and no outsider will be able to influence its decision-making.
It is hard to imagine that people would understand the meaning of decentralization and open-source, learn how to use blockchain wallets and protect SEED, and then not want to further promote these concepts in society.
Decentralization doesn’t stop at transactional systems. Cardano will allow you to create tokens and exchange them under pre-declared rules with anyone in the world. Two people don’t have to know and trust each other. Yet they are able to exchange ADA coins for HOSKY tokens through a decentralized exchange. This is just the beginning.
We need to test these concepts and then seek to promote them more widely. Social networks, banks, and institutions will one day have a decentralized basis. People will use the internet through their blockchain wallet, where their money, identity, history, data, tokens, NFTs, and other things will be. Just as we hold SEED to protect ADA coins, we will be able to protect other things, including our privacy, in the same way.
The concept of decentralization brings about a paradigm shift. When we interact financially or socially, we use the services of intermediaries to whom we often unwittingly or unwillingly give power. Third parties have the opportunity to abuse their position or not provide a quality service. They can profit from these services and use the profit to gain more power in society. The concept of decentralization together with open-source software can change the rules of the game. Cardano will allow to establish trust between users and become a much more reliable intermediary than the current centralized ones can. All people will have control over how Cardano works through open scientific studies and source code. People should demand the same third-party code that builds their services on top of Cardano.