Bitcoin's Developers Are Debating A Change To Its Open License

Ever since its launch last August, bitcoin has had an antagonistic relationship with its offshoot, bitcoin cash. But their battle may have provided a trigger to seek ways to protect bitcoin’s core code from indiscriminate use.

If a proposal to change the open source MIT License governing bitcoin is implemented, then further forks from bitcoin might not be allowed to use the original cryptocurrency’s code. The MIT License used in bitcoin is widely used across open source software projects to enable innovation and collaboration. (See also: Will Bitcoin Undergo 50 Forks In 2018?)

The MIT License is a permissive free software license that originated at the Massachusetts Institute of Technology (MIT). When an author makes software available under the MIT License, they grant permission to use, share and modify the software at no additional cost.

A multiplication of the number of forks from bitcoin’s blockchain has caused confusion and consternation among developers. For example, bitcoin cash critics have accused it of profiting from bitcoin’s established brand. Others point to frivolous offshoots from bitcoin as proof that the forking craze has gone out of bounds. (See also: Should Coinbase Stop Selling Bitcoin Cash?)

The new proposal, which has been suggested on a mailing list for bitcoin developers maintained by the Linux Foundation, involves the addition of wording on the MIT License that would make it difficult to profit off bitcoin’s brand after forking from the cryptocurrency’s blockchain. Specifically, the proposal prohibits the use of bitcoin “in a name and/or marketing material” in a new project unless it is “fully compatible with the bitcoin (core) blockchain.” 

Since it is a fork from bitcoin’s original blockchain, bitcoin cash would automatically become ineligible for use of bitcoin in its name. (See also: Bitcoin's Biggest Unresolved Tax Question: Hard Forks). 

Mixed Reaction, Mostly Against Proposal

Reaction to the proposal has been mixed. 

“The reuse of the bitcoin core code can allow even a child to launch a form and this mess should stop,” writes Aymeric Vitte, a list user. "Maybe people like to get 'free' coins but they are misleaded (sic), they can lose everything and there are some more vicious side effects, like replay protection collisions between forks,” he adds, referring to the duplication of transactions that may occur on forked chains as well as bitcoin’s original blockchain. 

For the most part, developers are opposed to the proposal. According to them, there are several problems with the solution. For starters, ownership of the bitcoin core software is unclear. Currently, the MIT Digital Currency Initiative partially funds development costs, and code is maintained by a team of developers. Hence, it would be difficult for someone to claim ownership and sue another party for using the software. 

Some have also construed a change in bitcoin’s license as an “attack” on bitcoin. “Even if my code changes are compatible with the current blockchain as per bitcoin core I would have the lifetime "threat" that one day my code wouldn’t anymore because of changes in bitcoin core,” wrote Felix Wolfsteller, another list contributor. There is also the threat that a change in licensing would stymie further innovation on bitcoin’s blockchain. 

Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin.

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.