Vitalik Buterin believes open source is better than public goods.
In a recent blog, the Ethereum co-founder shared his sentiments on the debate over open source vs. public good, stating that the term public good has a deep misconception when used in public discourse.
He pointed out that the term “public good” is frequently misconstrued as applying to any service offered by the government.
Economically speaking, however, a public good is one that is non-excludable—meaning nobody can be barred from using it—and non-rivalrous—indicating that one person’s use doesn’t diminish its availability to others.
Vitalik argues that in everyday conversations, there’s a tendency to label government-produced items as public goods, even when they don’t meet these standards. This misinterpretation shifts the debate away from the intrinsic characteristics of the good to a focus on the creators and their stated goals.
As a result, government projects are often automatically classified as public goods, overshadowing decentralized, community-centric efforts like blockchain protocols.
Addressing how funds for public goods are distributed, Vitalik stated that “There is a general perception that public goods funding lacks rigor and is run on social desirability bias.”
Many projects are financed based on their appeal rather than their actual effectiveness. This often causes funds to be misdirected, favoring less impactful projects and neglecting truly valuable work.
According to Vitalik, funding decisions often lack objective evaluation, leading to short-term or politically driven choices rather than those based on measurable outcomes. There is also a tendency for public goods funding to favor “insiders who can play the social game.”
Why open source is better
Vitalik argued for expanding the focus beyond just public goods to include an open-source framework for value and funding. The transparency inherent in open-source projects makes them valuable over time.
Read also: Vitalik warns of tokens enabling political bribery and manipulation
He pointed out that many projects tagged as public goods are open-sourced, such as cryptographic protocol research and open-source software like Ethereum clients and software libraries.
However, he acknowledged that the open-source model struggles to produce physical infrastructure, as it’s primarily designed for digital projects. “That’s the whole point of network state,” he said in response to how the crypto industry is addressing this challenge.
The co-founder explained that open source promotes intentional development rather than aimless creation. While it doesn’t necessarily mean making something free, it facilitates the spread of useful infrastructure worldwide.
He called for a reevaluation of both the definition of public goods and their funding. Instead of assuming a project qualifies as a public good just because it’s government-funded, people should consider whether it truly serves the public in a non-excludable and non-rivalrous manner.
