Economic Reality of Software

Software is not a physical, tangible, manufactured good. The storage device it lives on is tangible, physical, manufactured, but the software is not. The software is a reconfiguration of the energy that is on the storage device. Change the software, you change the energy.

Energy does not rust like metal. You can lose energy but when you maintain energy, software has properties physical things do not. Instantaneous transfer, perfect purity of form, and endless replication. Ironically, this unlimited nature of software works against traditional ways of defining the value of a thing when physical scarcity is a reality. Software is not scarce once created.


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