Open Source money: what is it?

It is often called Open Source Money.

Open Source generally means that a person can copy and share the process, product, service, etc.  Also, a person can make changes which are contributed back to the source.  And changes can be shared with others as can derivatives which potentially lead to a fork or alternative to the original.

Is that the case with Open Source Money?

In this article, we'll take a closer look at Open Source Money and hopefully lead people to consider possible pros and cons.

We will start off by mentioning Bitcoin, because Bitcoin has specifically dubbed itself Open Source.  For all intents and purposes, it was the first form of this type of "money".

The wikipedia article on Bitcoin probably states it most accurately.  "Bitcoin is a peer-to-peer payment system introduced as open source software in 2009".  As a payment system, like one would perform online banking or use services like Paypal, it is intended to be a method by which people can conduct online monetary transactions from one individual to another.

It is more accurately called a cryptocurrency.  There are many other types of digital coins, as listed in the wikipedia cryptocurrency article.

Of course, there are benefits to using p2p payment systems.  As mentioned, simply to conduct a monetary transfer.  In the case of these cryptocurrencies, the transactions are audited to help ensure the accuracy and appropriate credit and debit aspects of money like transfer.  And it is supposed to be annonymous.

Since the inception of cryptocurrencies, there has been a lot of public hype, both in forums as well as in popular, public media.

There is possibly some benefit to these types of systems, although they are certainly known to be quite volatile in value.

The open source nature of such currencies remains strictly in the software.

How is that relevant?  In the sense that an open source, digital currency is equivalent to creating physical, monetary tokens.  Just like the bank or government issued coins in your pocket and notes in your wallet.  There is no printing press.  No coin stamps.  A person can't make a bitcoin that they printed out, into some other currency by changing the logo on the coin and sharing it with others, nor can they paint a token from an arcade with a cryptocurrency logo.  They would have to take the software that is used to create these coins, in order to create and share coins.  And it is the software itself that might allow them to modify it in a way that makes it something different.

Without getting too deep into the politics of money and alternative money sources, and the legality of non-government money, the reality is, any currency has to have at least a level of trust that the coin that I purchased with some physical, valuable asset will be worth the same amount to the person whom is accepting this alternative currency when I buy some product or service with it.

And, the fact that people can generate their own money with the software is the equivalent of counterfeit and fraud risk.  Even with the security checks of government issued money, there are many instances of counterfeit money and methods attempted, sometimes with success, of obtaining goods and services with money that does not actually exist.

Money and value transactions are tricky at the best of times.  Most money was at one time linked to some specific resource which had at least some consistent, presumed and agreed upon value.  These days, it is harder and harder to agree upon that value, especially when banks simply, for all intents and purposes, print more money when they want to.

Again, it not the intention of this article to speak about the woes of our monetary system, aside to suggest that the world could certainly use an alternative to the current monetary convention which exists, globally.  How that could be done in an open source manner, is something that would likely be a great thing for people to really begin to consider and talk about in public forums.

With regard to these digital money systems, they have pros and they have cons.  These may not be perceived nor any more real than those that exist with any other traditional currencies.

If a person is comfortable using these currencies, then they could become a great alternative for conducting transactions.  For those who are more traditional, these are probably technologies to shy away from.  Certainly, converting one's money to digital currency still carries significant risks.  Even while many currencies have seen very significant value increases, they certainly could equally see failures that could cause converted money to be worthless.

This is most certainly buyer beware technology unless and until these currencies have become much more mature and stable.