The Linux Credit Card Initiative

The Linux Credit Card Initiative
Michael Turner
Dec 17 1998
DRAFT 0.1.3


While I'm fairly sure that I'm the one who first came up with the key idea--i.e. of offering a Linux Credit Card as a way to help fund development efforts--it is now being independently implemented.

See The Linux Fund for details. I discovered this only recently (ca Sept 15, '99), courtesy of Stig Hackvan, but it seems worthy of support.

About This Document

This document is a draft proposal for the Linux Credit Card Initiative, a promotional device for an institutional framework for financial instruments that aim ultimately at providing reasonable compensation for labor on projects that advance the Open Source Software agenda.

The intent is to address a common concern: there are many projects that do not currently enjoy much support either because they are more ambitious than most OSS work currently done pro bono, or less intrinsically rewarding than most such work.

As a solution to this problem, this document proposes an idea that might solve some other problems as well: Open Source Banking. The key idea of Open Source Banking is that banking software should be Open Source. Open Source software development has proven to be a very low-cost path to robust applications in certain areas; in areas where security is a critical consideration, Open Source also improves on closed-source models because security holes can be found and repaired more quickly. Banks that use Open Source will save on both software and on embezzlement and fraud, and can pass these savings on to their customers.

The logical place to start is in the Open Source community itself, where the technical feasibility can be best appreciated.

Fielding a credit card was selected as a way of making some part of Open Source Banking a reality, in the interest of bootstrapping other technological and organizational components. Companies that offer affinity credit card programs can help provide the initial outreach.

This document is a strawman. The author is not an expert in OSS processes, licensing models, or in the details of operating credit unions, and has little sophistication in the tax and liability questions that might be raised by this proposal. It is a Request for Comments in the original sense of the term. In informal IETF terms, the goal is "rough consensus". In lieu of "running code," arguments for and against inclusion and deletion of components of the proposed framework should always make reference to real-world experience with success or failure of analogous components in other contexts.

What is the Linux Credit Card?

The Linux Credit Card is a credit card that will

Why a credit card?

Who's minding the store?

The Linux credit card will be offered under the auspices of a CREDIT UNION.

The board of directors of this credit union will be nominated initially from lists of

Nominees who accept will be voted on by the membership.

A provisional board of directors may be formed to work out the initial organizational start-up problems.

Compensation for board membership activities will be in line with that for the credit union industry, with the exception of non-voting members, who, having for the most part been the biggest net financial beneficiaries of OSS so far, shall serve pro bono.

Who can be a member?

Anyone willing to pay in advance the annual fee (TBD) for the Linux credit card, who meets the credit-worthiness requirements of the card-services provider selected, and who accepts by written commitment the risk of being drafted into a project study comittee (see below) can be a member.

In time, the organization may admit of different levels of membership, with different degrees of responsibility and benefit.

How will projects be funded by this initiative?

The pool of funds will be supplied by a percentage of income generated from interest income. Funds committed unilaterally by members for work on specific projects will be held in escrow, and excluded from this pool, but will be allocated, together with any added pool monies deemed needed, to approved projects.

Allocation of funds will be made by study comittees.

Study committees will be formed by random selection of the membership. The sample shall be large enough to form a reasonable statistical sample of the membership.

Committee membership will be subject to the blind-peer- review constraints used in submitting research proposals and research results in the academic research community.

Members can be excused from committee membership if the service could impose undue hardship, or if a majority of the initial selection agrees with the member's plea that the member has little of value to contribute.

Lack of technical ability will not be grounds for being excused in the case of market-focused study projects, unless the products under consideration would be strictly for developer consumption.

Committees shall consider, but not be bound to, funding commitments made under other developer-incentive programs sponsored by this initiative. (See below.)

Votes will be closed ballot.

Compensation (if any) for work done on study committees will be scaled to that applied toward jury duty in the jurisdiction of the member, where this applies. Claims for compensation in excess of some understood plausible maximum will be reviewed by the board of directors.

Except as agreed by members of the committee, all business of the committee may be conducted over the Internet, and will use automated authentication processes to conduct committee business to the extent possible. Any software used for these process will, naturally, be open-source, and certified as sufficiently tamper-resistant for the purpose.

What incentives will members have to promote development initiatives?

Members interested in promoting certain projects may use their Linux Credit Card account to make "lay-away" payments on unreleased products that have come to their attention. Products that are thus seed-capitalized and very successful in the market might, by mechanisms to be determined, compensate their benefactors not only with full reimbursement, but bonuses of frequent-flyer miles, equipment discounts, prizes etc. Similar arrangements might be made for "early-adopters", incentivizing developers in the practice of releasing early and often, and of listening to their customers. Products that fail to materialize can have their charges reversed through normal card membership services channels.

When will it start?

As a tentative and approximate deadline, Linux credit cards should be in the mail to members in Fall 1999, regardless of whether the organization has taken on what its members agree would be its optimal form.

The purpose of any early distribution would be to increase credibility, mindshare, and financial resources for building the OSS credit union into an open organization fully accountable to its membership.

Where in the world is it?

The Credit Union offering the Linux Credit card will have the minimal physical location required by the relevant regulatory agencies in whatever city, state/province and country the provisional board of directors agrees is best.

Actual credit card services will probably be outsourced to a company that specializes in affinity group credit cards (E.g., MBNA International).


This section attempts to be comprehensive, but is necessarily incomplete.

Institutional Influences:

The Berkeley Food Co-op (now defunct), and, perhaps more important, the Finnish cooperative business model from which it was transplanted by Finnish immigrants in the early 20th century. This might have been the first business I ever set foot in.

The Twin Pines Savings and Loan (now defunct), a Berkeley Food Co-op good-neighbor business where my first account was opened in trust by my parents when I was a teen-ager. This experience introduced me to the notion that sometimes you should let other people manage your money. I didn't like it at the time.

The Berkeley Co-op Credit Union, the only part of the Berkeley Co-Op to survive the politics and the market conditions that brought this community institution to an end. Its survival is encouraging.

The Berkeley-Alameda court system, for showing me first hand the process of jury selection.

The Briarpatch Network, as explicated in the writings of Michael Phillips ; and Clear Glass Publishing, which makes some of his writings available as open source.

MasterCard, brought to fruition decades ago, an effort in which Michael Phillips was a strong organizational influence at the outset.

The Internet Engineering Task Force, awarded the CPSR's 1998 Norbert Wiener Award for the model of "open, democratic dialog"; and (D)ARPA for its early sponsorship of this model, as well as for its direct sponsorship of me when I was doing research work at U.C. Berkeley.

The Free Software Foundation, for establishing the precedent of a working institution devoted to both open source software production and ideals thereof.

Working Assets, being (I believe) the first credit card that employed the idea of pro bono credit card use.

The University of California, my alma mater, for showing me that a corporation legally organized as a trust can produce a wealth of intellectual assets for social benefit;

U.C. Berkeley in particular for showing me how such assets can be deployed in software, and more generally, how peer-review processes work (and fail) in research settings.

The Computer Science Undergraduate Association at U.C. Berkeley. I was one of several instigators and a founding member. It may have members now who hadn't been born when it was founded.

AT&T Bell Labs, as restrained by monopoly regulation, for providing a limited-distribution model within which I could observe the dynamics of Open Source Software before it was known as such.

The Berkeley System Distribution efforts, as most energetically exemplified by Bill Joy's often-single-handed delivery system for BSD tapes, a Joy to witness.

Cygnus, for making a successful break into commercial operation. My first experience with Cygnus was taking their version of Gnats, a bug-tracking system, into production use.

The notion of selection of an electorate by lot, which can be found in both German and Greek antiquity, and probably reinvented in innumerable other places; as well as the idea of closed balloting. Ernest Callenbach's A Citizen Legislature revived my interest in lottery-electorates. More recently, there is the idea of Deliberative Polling (tm), which can be explored in James Fishkin's The Voice of the People: Public Opinion and Democracy. The Berkman Center for Internet & Society is running the Internet Deliberative Poll Project

Interested discussants so far, who offered helpful opinions and/or encouragement:

Others I've discussed this idea with, and whose own notions of how to solve problems addressed here were a spur to my own thinking:

Stig Hackvan (

(His own initiative will be grandfathered up into the "Institutional influences" section of the Acknowledgements at such time as his initiative begins to show signs of being an institution.)