As more areas of our economy become computerized and move online, more and more of what regulators need to understand will be in the source code.
For example, take the VW emissions scandal:
These days, cars are an order of magnitude more complex, making it easier for manufacturers to hide cheats among the 100 million lines of code that make up a modern, premium-class vehicle.
In 2015, regulators realized that diesel Volkswagens and Audis were emitting several times the legal limit of nitrogen oxides (NOx) during real-world driving tests. But one problem regulators confronted was that they couldn’t point to specific code that allowed the cars to do this. They could prove the symptom (high emissions on the road), but they didn’t have concrete evidence of the cause (code that circumvented US and EU standards).
Part of the challenge here is not just the volume of code, but the way it’s delivered: in the case of most consumer devices, code is compiled to binary, for competitive and copyright reasons. So, in the case of the VW scandal, researchers had to reverse-engineer the cheating, by looking at outputs and by studying firmware images.
By contrast, with cryptocurrencies and blockchains, everything is open source, by definition. If you’re curious about how the bitcoin, or ethereum, or tezos networks work, you can not only read the white papers, but you can examine the source code.
Because the value of cryptocurrency networks is embedded in the token, there is no longer a commercial incentive to obscure the source code — indeed, doing so would be detrimental to the value of the network, as no one would trust a system they can’t introspect.
This may seem like a minor detail now, but I suspect it will become an important differentiator over time, and we’ll begin to see widespread commercial and regulatory expectations for open source code over time.