As with other forms of FOSS, one way to fund development work is through provision of services associated with the software.
Blockstream is a company founded in 2014 by a group of Bitcoin developers with a mission to “build crypto-financial infrastructure based on Bitcoin”.
Blockstream provides funding for the development of Bitcoin Core, the predominant bitcoin network client software. It also employs a large number of prominent Bitcoin Core developers.
The company has raised $76M to date from investors, including venture capital firms Horizons Ventures and Mosaic Ventures. - Wikipedia, 05/26/19
Blockstream’s business model is in some ways similar to the software as a service model of companies like RedHat. Blockstream develops the open source software (Bitcoin Core in this case) alongside services which rely on that software and which generate revenue for the company. Where Blockstream is different is that the services it provides rely on the Bitcoin network, not directly on the software but on the common pool resource that software is used to create. If Blockstream needs Bitcoin to do something new or differently to improve its service, it does not have the same unilateral power to push that change that a company like RedHat has. What Blockstream does have are some seats at the table in discussions about how the Bitcoin Core software should be further developed, in the form of the contributors it employs.
Bitcoin Core in turn has the benefit of community trust and inertia built up over a number of years, making it quite entrenched with the vast majority of Bitcoin full nodes running this software implementation.
It is worth noting that Blockstream’s efforts to enhance Bitcoin go beyond the Core software and its own revenue-generating products to encompass things like an array of satellites continually broadcasting the entire Bitcoin blockchain. These allow a user anywhere in the world to obtain the data and verify the current state of the chain without even an internet connection (although a connection is still required to broadcast transactions). Investments such as this demonstrate that it is the common pool resource or network that matters, and that the task of improving its utility does not stop at the boundaries of software but can spill over to include the many other aspects which give that resource value.
More recently still (Aug 2019), Blockstream revealed that it had been growing its own PoW mining operation since the issue with PoW miners over SegWit in 2017 (see here). This is quite an interesting development, as it entails a major entity in the developer constituency also becoming a significant player in the mining constituency.
It is this spill-over and the degree to which the software is enmeshed in a resource with other important attributes that makes CBPP a useful lens to apply. I will argue below that the path to realizing this technology’s potential lies in bringing more of the aspects that give the resource its strength and value “onto the commons”.