An Open Source License for Emerging Financial Technology
Approximately one year from now, a decade will have passed since Bitcoin’s white paper by Satoshi Nakamoto was posted to a cryptography mailing list. Today, we find ourselves amidst a deluge of innovation in the space. There are over 1,100 cryptocurrencies with a total market capitalization of almost 150 billion US dollars, and despite government crackdowns and increased regulation, the ecosystem keeps rapidly growing. CoinMarketCap.com is getting more website traffic than the Wall Street Journal (WSJ.com). In June, ICOs raised more funding than both Angel and early-stage VC funding combined. People are predicting that daily trading volume for digital currencies will soon pass Apple, which has one of the largest market capitalizations on the planet. Many of these new instruments share one thing in common — that they rely on open source software, like Bitcoin or Ethereum.
A New Open Source License for Digital Currencies is Needed
Some of today’s most prevalently used open source licenses were written in a different era. The Apache 2.0 license (the latest version) was released in 2004. This was three years before the iPhone. The most popular phone that year was the Nokia 2600. The 3-clause BSD license (also known as the New BSD License) was released in 1999. This was five years before Facebook was created, and four years before Myspace. AOL had just released a new innovative plan that let people connect to the internet at speeds faster than dial-up. The MIT License, which is the most-used open source license today, is also many years old—from the turn of the century. It is used by many projects in the digital currency space.
Never before in history has there been such a rapid increase in retail and institutional investments, applied directly on top of open source software.
The Digital Asset / Payment Protocol License
Copyright <YEAR> <COPYRIGHT HOLDER> Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the "Software"), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions: + The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software. + Accept that the Software involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. + Do not infringe upon the trademarks and/or word marks of the Software as described in the trademark license agreement located at: <LINK> THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
The Digital Asset / Payment Protocol License (DAPPL) is based off of the MIT License. It favors its simplicity and comprehensiveness with two added distinctions, market risk and trademark disclaimers.
Each week, hundreds of thousands of new users are getting involved with digital currencies. A standard market risk disclaimer included in the licenses of the open source projects behind them would be similar to the same disclaimers people are already seeing when interacting with traditional trading software and related platforms from various financial institutions.
The rapid rise of digital currencies have gained the attention of media outlets around the world. Every day, it’s easy to find new articles about Bitcoin, Ethereum, and countless ICOs. A negative side effect of this are numerous pop-up projects, scams and pyramid-like schemes designed to mislead people who are drawn into the space hoping to reproduce the profitable returns mentioned in the media. More projects should actively develop trademark policies and link to them in their licenses to prevent their likeness from being used and marketed toward something misleading, or worse, nefarious, in another forked project that relies heavily on their code bases.
The Digital Asset / Payment Protocol License (DAPPL) has been released to help open source fintech software. Existing licenses that are frequently used originate from an era when much of today’s internet, by and large, simply didn’t exist. The licenses that are used in open source projects, especially those that directly interface with people’s money, should evolve and grow just like the underlying technology.