Purposeful Communities, Closed Hierarchies, and Decentralization

Defining “Purposeful Communities”

Let’s define a “purposeful community” as a community that is organized around fulfilling some specific function. Corporations, government bodies, and nonprofits are all examples of purposeful communities. In contrast, I wouldn’t consider a town or country a purposeful community, since they aren’t trying to accomplish a specific well-defined goal.

Closed Hierarchies: An Industrial Model

Today, purposeful communities scale beyond Dunbar’s number by adopting a hierarchical and closed structure. The community has a single executive (“CEO”, “President”) and power is delegated through a “chain of command” down to workers on the edge of the network.

These organizations have hard, binary boundaries (you either are an employee or you aren’t a part at all) with expensive processes for bringing people in (or ejecting them). The organization is usually opaque, trying to ensure as little (unbiased) information about its internal processes makes it out as possible. (Any such information leakage reduces the power of the individuals at the top of the hierarchy.)

This model of organization design worked very well for industrial revolution era. It’s good at taking a specific well-defined strategy, reaching economies of scale by coordinating a large organization, and then extracting as much value as possible. This strategy was originally developed around the production of physical assets (factories, equipment, etc); it’s easy to control access to these resources (and thus ensure an “organizational monopoly on value extraction”). Thanks to the invention of “intellectual property”, the closed-hierarchical model could be applied to organizations producing intangible assets (think IBM, Google, etc).

Closed Hierarchies vs Open Source

However, this model does not and cannot apply to open-source communities. The closed-hierarchical model is all about controlling access to something, and then using the point of control as leverage to build a hierarchy that maximizes value extraction. Open-source gives up control, and thus gives up this mode of organization.

In the absence of a model for capturing and directing resource flows, open-source projects have been forced to make do with less: less resources, less structure, and less powerful tools for coordination. However, even in the absence of scalable organizational forms, they’ve thrived. Why is that?

I think the rise of open-source demonstrates a vital weakness of the closed-hierarchical model when dealing with intangible capital.

By creating a hard boundary (“hired” vs “fired”) around who can participate, they exclude the overwhelming majority of potential contributors. This isn’t so bad in the industrial model, where success comes from executing on a well-defined strategy at scale. But it’s crippling in the intangible innovation world, where 10x or 100x ideas can come from unexpected corners. The aggregate value provided by the “long tail” of unexpected contributors can be huge.

By creating a hard boundary (“negotiated contract to use our IP” vs “infringement”) around building on top of ideas, the closed-hierarchical model excludes the overwhelming majority of potential users. In particular, it disproportionately excludes “just tinkering” use cases, since the tinkerers are not going to going to have the scale or resources to negotiate agreements with giant corporations. This isn’t so bad in the industrial model, where the cost of excluding certain users can be easier to predict upfront. However, with software and innovation, today’s “just tinkering” often becomes tomorrows “society-transforming innovation”. Those innovations are smothered by the closed-hierarchical model.

It’s because of these advantages that open-source projects, when well-resourced, have consistently outcompeted the closed-source alternatives. You can consider Linux vs Windows (Windows won desktop computing, but Linux is ubiquitous in mobile and server computing) as an example. As an even more dramatic example, consider Git vs Bitkeeper. This dominance has extended so far that companies like Google pre-emptively open-source key technologies (like TensorFlow), because they know if that if they don’t, their tech will be outcompeted by an open system.

Open Coordination

To realize the paradigm-shifting value of open-source, we need to build the social technologies that enable effective open coordination at scale. Such a system should:

  • Be open/permissionless: anyone can contribute, and be rewarded for their work.
  • Support self-organization and decentralized decision making: people should be propose new initiatives and coordinate around new types of work, without needing approval from a centralized administrator.
  • Enable value harnessing without control: Projects should be able to “harness” value from downstream projects and dependents, even though they do not have the control that allows them to exclude potential users. (Cred needs to flow upstream.)

SourceCred aims to be such a decentralized and open approach to coordinating purposeful communities.

This post is inspired by some questions asked by @AdrienDLT.


This is a great framing of the current power dynamics. It is clear OSS has an advantage in emerging markets for intangible capital, and that this will only accelerate with the development of systems like SourceCred. It’s sending transaction costs through the floor. It will be compelling to knowledge workers (already is:).

Boosting seems like a smart way to both incentivize curation of the cred graph and attract capital inflows.

Now that the basic structures in the SourceCred infrastructure have taken form, and are being implemented, I’m curious to see how contributors interact with them. Is the current group of contributors large enough of a data set?

A part of me is also on the watch for “the firm” or other coercive hierarchies emerging in new form inside SourceCred. If only one company, for instance, is doing all the boosting, it could just start looking like a standard employment relationship in disguise. I’m also wondering if the “carrot” of outside capital injected into the system to boost contributions will create enough motivation to organize contributors effectively. When I think generally about this, I keep coming back to the idea of keeping contributors connected, or “sticky community”. E.g. if company X comes in offers a lot of money for a feature most contributors don’t want, and one contributor (contributor A) takes up the offer, the other contributors should have some of that Grain/capital flow to them as well, due to their previous work with contributor A. Conversely, if one contributor (contributor B) decides to make a courageous stand against those at the top because it has become tryanical and oppressive, they will still continue to get Grain/capital from connections to other contributors, even if the top tries to retaliate by ostracizing them.

Excited to play :slight_smile:


Given that we have so few contributors, I think we definitely will want some more users playing in the system. Currently working on writing up a 2020 roadmap, the overarching goal will be to onboard 2 other communities to using SourceCred, which will start to give us validation on whether this model can work for other communities, too.

Also, as we get the supernodes system up and running, and increase the flow of financial rewards, I want to bring more contributors to SourceCred, too.

In this example, contributor A gets more cred (so they get a larger share of the pie, long term, for having brought more into the system). But the gets distributed to the contributors at large based on their cred, not just to A. So when one person finishes a boosted task, everyone benefits.


We’re playing with it on the Hackalong.io discourse just to let you know/keep you looped in. We’re not in the depths yet though, just gently playing with it until fuzzy reputation metrics like badges (important yin currencies) are integrated (or built our end). In that regard it would be cool if SourceCred could recognise the Discourse badges :slight_smile:

Hackalong.io looks cool!

In our last community call (which I’ll be posting a recording of soon), we were talking about how impressed we were with Discourse, and how we might incorporate more features, such as badges. We also want to eventually create a node for the Discourse project itself to acknowledge the utility we’re getting from it, flow some cred to them.

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Re OSS vs closed: obviously we love open source, but… it was mentioned that OSS software beats closed source contributors every time. Depends… Both Apple and Microsoft (driven by many closed source technologies) are the most valuable companies in the world. That being said, they’re moving towards more and more open source work (yay). Also, if the value that Apple and Microsoft captured was distributed among all the stakeholders (not just shareholders, but stakeholders) of those companies, then that could be amazing.

So in addition to the points mentioned above, I’d add as a caveat that the more the world becomes connected the more that systems that leverage this connectivity will be successful. In the limit, open source will dominate. SourceCred and tools like it will help make that happen :slight_smile:

Very interested in this! Where can one learn more (and potentially contribute) these initiatieves, esp on the engagement/outreach side of things?