2 Open Positions: 1 Postdoc (3+3 years) and 1 PhD (3 years)

We are pleased to that we can now invite applications for a full-time postdoc position (3+3 years) at our Chair of Management & Digital Markets. Read all the details here.
For any further questions please contact: sebastian.spaeth [ at ] wiso. uni-hamburg. de

We are also hiring a new doctoral student. Details are here.

Spaeth, S., von Krogh, G., & He, F. @ ISR (2014)

Spaeth, S., von Krogh, G., & He, F. (2014). Perceived firm attributes and intrinsic motivation in sponsored open source software projects. Information Systems Research, forthcoming. doi:10.1287/isre.2014.0539
is out and if you are subscribed is available here. Everyone else can grab a pre-print version (pdf).  It has taken us just about 8 years to get it done. Hurray! Thanks to Georg and Vivianna for bringing this through, and thanks to Natalia Levina for guiding us through the lengthy process.

Abstract: Voluntary contributions are crucial to the success of open source software (OSS) projects. Firms sponsoring OSS projects may face substantial challenges in soliciting such contributions, since volunteer participants are neither regulated by an employment contract nor offered financial incentives. While prior work has shown the positive impact of motivation on the effort expended by volunteer participants, there is limited understanding of how specific firm attributes shape volunteers’ intrinsic motivation. We offer a theoretical model of how the perceived community-based credibility and openness of the sponsoring firm have a positive impact on the intrinsic motivation of volunteer participants. The model is explored using survey data on volunteer participants from two sponsored OSS projects. Results show that a sponsoring firm’s community-based credibility (OSS developers’ perception of its expertise and trustworthiness) and openness (its mutual knowledge exchange with the community) strengthen the volunteer participants’ social identification with the firm-sponsored community, which in turn reinforces their intrinsic motivation to participate. Moreover, the perceived community-based credibility of a sponsoring firm directly enhances volunteer participants’ intrinsic motivation, whereas perceived openness fails to affect motivation without the mediating mechanism of social identification. Implications for firms seeking voluntary contributions for their sponsored OSS projects are discussed.

NEXT WEEK: SMS Special Conference Copenhagen

Next week takes place the SMS Special Conference in Copenhagen. The conference topic is „Micro-Foundations for  Strategic Management Research: Embracing Individuals“ and features Richard Rumelt, Ronald Burt, and Ernst Fehr as plenary speakers. I will have the opportunitiy to discuss my current research-in-progress with Sebastian Späth in Copenhagen and am very much looking forward to this interesting program! I’ll also most probably twitter from the conference (#SMSCph), so stay tuned.

FULLY BOOKED: THIS on Open & Collaborative Innovation is just around the corner!

As the last preparations are made, the countdown has begun for The Hamburg Innovation Symposium 2014, first anounced here in January. The theme of our symposium is Open & Collaborative Innovation and we are very proud to welcome in Hamburg some of the most prolific researchers on the topic as keynotes as well as participants — just take a look at our program here.

We were taken by surprise how fast we received requests to participate and are very sorry to say that our limits are already more than reached so that we cannot admit further participants. In case we receive the necessary funding, we might organize THIS a second time next year. So stay tuned.

Hamburg has a public 3D printer

3D printing is a powerful tool to learn, collaborate, tinker, and experiment. We are delighted to learn that the „Bücherhallen Hamburg“ have acquired a 3d printer that can be used by the general public for free. Whatever will become of libraries in a (not so far?) digital future, I hope they will remain public places (a „BA„) that enable the sharing and creation of knowledge. This is one of they many ways in which that can happen.

The MtGox-crisis: What happened and what does it mean for bitcoin/cryptocurrencies?

Fundamentals of Bitcoin (in case you don’t know yet)
Bitcoin is the first decentralized cryptocurrency and, even after the still unfolding MtGox-crisis, still the cryptocurrency with the highest market capitalization. Its fundamental innovation is the combination of asymmetric cryptography and public peer-to-peer shared transaction recording (this distributed database of mined coins and transactions is called „Blockchain“). The Reuters infographic below (that I found here) provides a good overview:

Reuters infographic on the bitcoin economy
Reuters infographic on the bitcoin economy (click for full size)

What happened (in a nutshell*)
Mt. Gox, once the biggest trading platform for BTC, first had liquidity issues in connection with the seizure of a bank account by US FinCEN mid last year. As of January, MtGox apparently still had big plans. The real trouble, however, started over the suspension of any transactions from and to Mt. Gox in early February. While Mt. Gox issued a statement declaring that this was due to a „bug“ in the BTC-protocol, a core developer of the bitcoin foundation stated that the issue over transaction malleability has been known since 2011 and can be dealt with by means of an adequate wallet software (cf. here).
Transaction malleability refers to the fact that the way transactions are checked for being processed allows thir parties to confuse senders/receivers as to whether or not a transaction actually cleared. This is due to the fact that one and the same transaction might be modified (e.g. by some mining node clearing the transaction), so that a different hash is created as transaction ID. As the underlying transaction remains untouched, the new transaction hash will clear as valid. However, a sender checking for the intended transaction ID will not find it and might thus assume the transaction didn’t go through. In the end this might not be a problem in case of careful verification processes, but in case funds are automatically re-sent, high frequency traders might be affected. It is assumed that this is what happened at MtGox.

(* you can find an extended history here)

The bad news
Mt. Gox is indeed insolvent on a scale of about BTC 750,000, which is about $435 million at the current exchange rate. It appears to have been deceived into resending bitcoins. Internal documents leaked (authenticity unknown to me, but receiving some credit from insiders) and suggest at least shady handling of the issue that remained unnoticed for YEARS. It is unclear where all the money has been lost. The total loss might be a combination of automatically resent bitcoins and (in case Mt. Gox did speculate for its own profit on the exchange rate using the $ deposits of its customers*) an unfortunate development of BTC/$ exchange rate at the moment when Mt. Gox came under fire due to rising customer preoccupation over transfer malleability and other rumors.

(* Customers had at least two deposits at Mt. Gox, one in $ and one in BTC.)

The good news
Meager, but important: BTC-Protocoll appears to be intact and bitcoin is regaining market capitalization (+2.48% the last 24h to $580.99/BTC). Exploits of the malleability issue can be regarded principally as mere DoS-attacks and other BTC-traders already suspended operations until this is cleared in order to prevent further damage.

Conclusion
1) Bitcoin is like cash and theft is possible in spite of public transactions! Once it is transferred from your BTC-wallet, it’s gone. Sure, transactions are all public and can be traced; but once they are further transferred to a third party and the third party is a bona fide receiver, funds are lost as long as the exploiter behind the address in the middle remains unknown.
2) Intermediaries that create additional money supply based on an off-Blockchain reserve can be victims of bank runs just as traditional banks.
3) Do not automatically resend any bitcoins without double checking.
4) In spite of this crisis, general support for bitcoin seems unbroken: new BTC-ATMs emerge continuously (e.g. here and here) and the malleability issue seems to be resolvable. But it further stokes fears (probably never really resolved) that there might be further issues still unknown. Although this equally affects any cryptocurrency, and while bitcoin remains the most valued cryptocurrency, it will have to face competition from others such as Ripple, Litecoin and many other „Altcoins“. Nonetheless, while the future of bitcoin as a currency remains unclear, its contribution to virtual currencies (and beyond) is already a disruptive innovation.

Update (2014/02/28): Not a classical bank run, but a long-term mega-heist (possibly inside job)!
After a press conference with Mark Karpeles today things become somewhat clearer. It appears to be confirmed now officially that bitcoins have been stolen. Some commentators spoke of a „bank run“ when describing the Mt. Gox crisis. A classical bank run, however, can only occur to banks operating on basis of a fractional-reserve banking system. Mt. Gox did run an internal system of pseudo-bitcoins (off-Blockchain) and held reserves in a „cold wallet“, which should serve (if implemented correctly) as a kind of safe, but is NOT comparable to reserves in a fractional-reserve banking system. In fact, solvency issues arise to banks that create new money supply through lending and borrowing and consequently run a asset-liability mismatch. This is a kind of activity that Mt. Gox did not engage in as to my knowledge. Therefore their insolvency can only be the result of theft or misappropriation of some kind. This would make the Mt. Gox crisis front runner for the award of the biggest bank heist in history.

Update (2014/03/03): Read also this very insightful and witty comment that clarifies why transaction malleability is very unlikely to be the security breach and instead suggests it to be an inside job.

tl;dr: MtGox victim to mega-heist (probably inside job). IMHO, cryptocurrencies will last.