The Big Legal Issue Blockchain Developers Rarely Discuss

Software licensed under open source licenses is fundamental to the success of blockchain projects.

OSS licenses are used by both of the two major public blockchains, ethereum and bitcoin, as well as many other major blockchain projects, including the HyperLedger programs and R3's Corda.

The importance of selecting the right OSS license and complying with the terms of that license is rarely discussed by the blockchain community.

If blockchain projects seek adoption by enterprises, the OSS license for the project will have a material impact on the rate of adoption.

Jerry Cuomo of IBM recently noted on Frederick Munawa's Blockchain Innovation podcast that the complexity of the OSS licenses for ethereum was one of the reasons IBM decided to shift from ethereum to its own blockchain project, which eventually became part of the HyperLedger project.

Prospective enterprise users of a blockchain project will decide which blockchain project to adopt by applying the same criteria that they use for adopting other OSS licensed projects: the complexity of the OSS project license or licenses; the potential difficulty of complying with the obligations of such OSS license; and the potential challenges of integrating a blockchain project with other software projects.

The most fundamental characteristic of a copyleft license is its "Reciprocal" provision: the legal requirement that both the original OSS and all "Derivative works" of the original OSS be distributed solely under the terms of the copyleft license.

The integration of copyleft licensed projects with projects licensed under other OSS licenses or proprietary licenses involves a complex legal analysis.

The OSS community that supports permissive licenses generally believes that permissive licenses encourage more rapid adoption of an OSS project and that the "Reciprocal" terms of copyleft licenses are not necessary for the successful development of a blockchain project.

Most blockchain projects have not historically focused on the importance of an OSS license choice.