An open service is a concept coined by computer scientist Juan Benet to describe a permissionless service provided by a decentralized network. It should have no central authority or censorship. An open service can continue working without maintanence. Nodes are encouraged to participate using financial incentives such as block rewards or service fees.
- Open-source - the protocol must be open source.
- Forkable - an open service can be forked, not just the software but the network participants themselves. When Bitcoin forks, it splits into two networks. When a disagreement in the Augur prediction market spirals into a network-wide dispute (none have happened yet) then the network splits into two separate "timelines" - in each timeline one side of the dispute is true and the other false. Network participants can choose to join one or the other.
- Permissionless - the protocols are open to join without hassle or selective discrimination.
The term open service is relatively unknown at the moment but describes many modern software projects.
- Bitcoin is peer-to-peer electronic cash.
- Ethereum provides a ledger similar to Bitcoin that is extensibly programmable.
- Filecoin will provide a decentralized storage market when it releases.
- OpenBazaar is a decentralized marketplace where anyone can self-host their own listings.
- Augur is a decentralized prediction market with no central moderators.
- Maker is a decentralized autonomous organization that produces Dai, a stablecoin issued as debt. Anyone can receive a loan in Dai by posting collateral, no counterparty needed.
Open services are designed to be non-jurisdictional, that is, not subject to any legal system. In theory, a government could criminalize their use or the code itself that runs the protocols.
From the perspective of a developer an open service is just a computer program and in the United States, computer programs are protected under the 1st ammendment. Recently, the SEC fined the founder of the decentralized exchange Etherdelta for running an unregulated securities exchange. The EFF has taken issue with a statement with the SEC which suggests that publishing code could be equivalent to providing a service even if the code was never deployed or run by the author. The statement from the SEC is reproduced below:
A system uses established non-discretionary methods if it provides a trading facility or sets rules. For example, an entity that provides an algorithm, run on a computer program or on a smart contract using blockchain technology, as a means to bring together or execute orders could be providing a trading facility. As another example, an entity that sets execution priorities, standardizes material terms for digital asset securities traded on the system, or requires orders to conform with predetermined protocols of a smart contract, could be setting rules. Additionally, if one entity arranges for other entities, either directly or indirectly, to provide the various functions of a trading system that together meet the definition of an exchange, the entity arranging the collective efforts could be considered to have established an exchange.