It's a little past midnight, and a lonely parcel of farmland not far from the new international airport in Bangalore, India, is soaking up a gentle rain. At the center of the lot is a house surrounded by a low stone wall. There's a hole in the roof and a bushel of ginger drying under an awning. Large block letters painted on the wall read: this property belongs to chhabria janwani. Inside, eight men—two armed with shotguns—confer in hushed voices as they peer out the windows. Is it safe for them to go to sleep, or should they stand watch another few hours? A guard wearing a dirty work shirt is the first to notice signs of trouble. In the distance, flashlight beams sweep the roadway. The lights advance, accompanied by a chorus of voices. Then the sound of people scrambling over the wall. One of the guards makes a break for the gate, sprinting toward a police station a mile away. Before the others can do much more than scramble to their feet, 20 attackers brandishing swords and knives emerge from the shadows. Some carry buckets of blue paint. It takes them only a minute to overrun the building. Three guards who stood their ground lie bleeding on the floor. The others surrender.

Firmly in control, the marauders shift gears. They pull out rollers and slather paint over Chhabria Janwani's claim to the land. By the time a police jeep pulls up, the sign is only a memory. The attackers have achieved their goal. Thanks to the convoluted rules surrounding land ownership, the removal of Janwani's lettering throws his claim into question. The dispute is no longer just a criminal matter of a gang of outlaws taking over a piece of ground; now it's a civil issue that will have to be mediated in the courts. This kind of legal battle, with its near-endless appeal process, could easily last 15 years. If Janwani hopes to develop or sell the parcel during that time, he'd be better off just letting his assailants have the property in exchange for a fraction of its value.

Bangalore’s Mobster Turned Mogul: Muthappa Rai is an Indian real estate power broker. He used to be a mafia don, wanted for murder by the Indian police. Wired's Scott Carney talks to the Bangalore land baron.

Bangalore, the fifth-most populous city in India, is the tech outsourcing capital of the world. In the past decade, more than 500 multinational corporations have established office parks, call centers, and luxury hotels here. The arrival of US companies like Adobe, Dell, IBM, Intel, Microsoft, and Yahoo, along with the emergence of homegrown outfits like Infosys and Wipro, has transformed this sleepy outpost into a premier showcase of globalism. Bangalore accounted for more than a third of India's $34 billion IT export market in 2007. Upscale commercial spaces like UB Tower, modeled after the Empire State Building, and first-rate educational institutions like the Indian Institute of Science set the standard for what India could become.

But there's a dark side to Bangalore's rocket ride. City officials—at least those who aren't taking bribes—struggle to reconcile the gleaming promise of the information economy with the gritty reality of systemic corruption, a Byzantine justice system, and a criminal underworld more than willing to maim and murder its way into control of the city's real estate market. As tech companies gobble up acreage, demand has pushed prices into the stratosphere. In 2001, office space near the center of town sold for $1 a square foot. Now it can go for $400 a square foot. Janwani bought his 6-acre plot in 1992 for $13,000. Today, even undeveloped, it's worth $3 million.

But high prices are only part of the problem for businesses looking for space in the city. It's nearly impossible to determine who actually owns any given piece of Bangalorean real estate. Some 85 percent of citizens occupy land illegally, according to Solomon Benjamin, a University of Toronto urban studies professor who specializes in Bangalore's real estate market. Most land in the city, as in the rest of India, is bound by ancestral ties that go back hundreds of years. Little undisputed documentation exists. Moreover, as families mingle and fracture over generations, ownership becomes diluted along with the bloodline. A buyer who wants to acquire a large parcel may have to negotiate with dozens of owners. Disputes are inevitable.

That's where Bangalore's land mafia comes in. With the courts tied up in knots, gangsters offer to secure deeds in days rather than years. "Businesspeople like to do their business, but many times the system does not permit them to do it," says Gopal Hosur, the city's joint police commissioner. "Because of escalating land values, unscrupulous elements get involved. They use muscle power to take control of the land." Some 40 percent of land transactions occur on the black market, according to Arun Kumar, an economist at Jawaharlal Nehru University. Often the local authorities facilitate these deals. A World Bank report rated the Bangalore Development Authority, which oversees urban planning, as one of the most corrupt and inefficient institutions in India.

On the ground, violence is meted out by local toughs like "Mulama" Lokesh, whose first name means "medicine"—as in, if you have a problem, Lokesh has the cure. He's an old-school gangster who happily shows off a bag full of curved swords called longs and cruel Chinese-made knives that he keeps in the trunk of his car. Despite a record of charges that include murder and extortion, even he is wistful for the old days. "The money is so big now that the value of human life has gone down," he says. "Now people fight with guns."

Inspector S. K. Umesh holds a cell phone a few inches from his ear, eavesdropping on a conversation. Since he became a police inspector four and a half years ago, his district's crime rate has plummeted by 75 percent. He's killed five of the city's most wanted criminals and caught more supari killers—contract hit men—than any other officer in Karnataka, the state in which Bangalore is located. Every few seconds, the wiretap emits a soft beep. Wrapping his hand over the receiver, he says, "Without surveillance, we wouldn't be anywhere."

Umesh estimates that Bangalore is home to nearly 2,000 gangsters, 90 percent of them vying for a stake in the real estate market. Calling up a file on his computer, Umesh scrolls through hundreds of mug shots, offering a running commentary on which subjects have committed murder.

Umesh points to a face on his screen: Muthappa Rai. Owing to a successful career as a mob don, Rai has a net worth measured in billions of dollars. Once he was among the most wanted men in India. Today he professes to have reformed, renouncing violence and founding a charitable organization. But he's also in real estate.

"In a way, Rai is just like any other goonda in Bangalore," Umesh says. Still, the mobster has made his mark on the city's underworld. In the 1980s, land disputes were settled with fists, knives, swords, and bamboo canes. But after Rai's arrival in the mid-'80s, guns became the weapon of preference. He often outsourced the violence to pros who learned their trade on the streets of Mumbai and dispatched their victims with firearms.

"He started out with a few card parlors and cut his teeth killing the leaders of rival gangs" Umesh says. Rai murdered a rival in an early '90s drive-by shooting, the inspector explains. Then he fled to Dubai, where he continued his operations. As the price of real estate back home began to take off, he paid $75,000 for the murder of a developer named Subbaraju who refused to sell a plot of land that Rai wanted. The lot would have become an upscale mall had not the hired assassin dropped his cell phone at the scene with Rai's Dubai number on redial. Later, the killer fingered Rai as his employer. Rai admitted ordering the hit to a Bangalore news reporter.

In 2001, Interpol issued a Red Notice—essentially an international arrest warrant—for Rai's extradition. Umesh flew to Dubai to help. The Dubai police nabbed Rai at his home, which had two Mercedes-Benzes parked outside, one red and one purple.

"But none of this matters," Umesh says. "The court acquitted him, and in India there is no such thing as double jeopardy." How could such a tightly wrapped case unravel? "It is very difficult to move things in our judicial system," Umesh says. Moreover, testimony can be hard to come by. "There were lots of things going on: intimidation, tampering with witnesses." Few victims of mob violence will speak out, for fear of further harm. Witnesses are threatened; judges are afraid to try powerful mobsters.

I meet with Subbaraju's son, Jagdish Raju, a few blocks from where his father was killed, at an office building he leases to the government. His eyes fill with tears. "How can we fight the Muthappa Rais of the world?" he asks. "There was no use. What's done is done."

Umesh takes such hopelessness in stride. "Police work is like a sport," he observes. His job is to bring criminals to court, but he holds little hope of seeing them convicted.

Two burly men carrying shotguns smile grimly as I drive past the first checkpoint to Muthappa Rai's fortified compound. I'm an hour south of Bangalore in a patchwork of fallow fields and construction sites. Rai's mansion comes into view at the top of a hill, a giant white building surrounded by a 20-foot-high concrete wall.

At the gate, armed security guards frisk me. They inspect my digital recorder to be sure it's not a bomb. A golf cart carries me over an intricate driveway of cut brick. Hopping out at the front door, I step onto a floor of polished Italian marble.

Rai's home is immense and gaudy, replete with gold ornaments and crystal chandeliers. Though he spends almost all his time here, the house feels eerily unlived-in, like a hotel lobby, as a platoon of servants keeps every surface shining. In the garage sits a bulletproof Land Cruiser. An attendant tells me Rai outbid Nawaz Sharif, the former prime minister of Pakistan, for it. The vehicle is built to withstand AK-47 bullets and rocket-propelled grenades.

Rai greets me with a charismatic grin. I ask about the need for such high security. "I am suffering for all of the things I did in my past," he says. "I can't trust anyone, not the government and certainly not my old enemies." In 1994, in court on extortion charges, Rai was shot five times by a gunman dressed as a lawyer. Although he managed to beat the rap, he languished in bed for two years. The man who hired Rai's assailant wasn't so lucky; he was gunned down while the don lay in his sickbed. Did Rai order retaliation? He lets out a hearty laugh. "Five bullets," he says cryptically.

But those days are behind him, he says. He has reinvented himself as a champion of Karnataka's downtrodden. The primary layer in Rai's veneer of respectability is Jaya Karnataka, a nonprofit social services organization with political overtones that, according to its Web site, appeals to a "universal order based on principles of human dignity, solidarity of people, and freedom of communication." Jaya Karnataka runs free health camps around the state, digs wells in drought-stricken areas, and funds cataract and open-heart surgeries for the poor. Since Rai founded the group 18 months ago, membership has swelled to 700,000 in more than 300 branches across the state. Many people assume the group is Rai's first sally in an upcoming bid for public office.

The organization also serves as a storefront for Rai's main line of work: real estate. "When a foreign company wants to set up a business, they don't know who to trust," he says. "They need clear titles, and if they go to a local person, they're going to get screwed with legal cases. But if Rai gives you a title, it comes with a 100 percent guarantee of no litigation. No cheating. It's perfectly straightforward." On any given day, he says, 150 people make their way to his opulent mansion to seek his help. He declines to name clients—association with his name might be bad for their business—but he lets slip that he recently acquired 200 acres of land for the titanic Indian conglomerate Reliance. A US firm looking to rent or buy might also go through Rai, but not directly. A facilities administrator in Bangalore—probably Indian—would work with a developer who, in turn, would contact Rai to secure a plot. "There's no question of American companies coming to buy land," he says.

According to a lawyer who deals with land issues, the system works like this: Asked to intercede by a prospective buyer, Rai checks out the parcel for competing owners. If two parties assert ownership, he hears both sides plead their case and decides which has the more legitimate claim (what he calls "80 percent legal"). He offers that person 50 percent of the land's current value in cash. To the other, he offers 25 percent to abandon their claim—still a fortune to most Indians, given the inflated price of Bangalorean real estate. Then he sells the land to his client for the market price and pockets the remaining 25 percent. Anyone who wants to dispute the judgment can take it up with him directly.

Rai's lieutenant, Sangeeth—who prefers to be identified as the boss's "blue-eyed boy"—says that violence is almost never an issue. "All anyone needs to hear is his name," he says. "If a rowdy won't back down, then we go to the person who is behind him and cut it off at the spine," Sangeeth explains. "In the hypothetical instance where it does need to come to violence, someone might need to be beaten up. The next day we would leave a message that we were behind it and that this was just a warning. The name alone has power."

Paradoxically, Rai's strong-arming may be helping to curb violence in Bangalore. With a system in place—even a corrupt system—everyone knows how the game is played. As a result, fewer people get hurt. Or, as Rai would have it, "ultimately, everyone wants to settle. No one wants to go to the courts."

India's judicial system may be convoluted, but it's not as corrupt as its law enforcement agencies. In August 2008, Bangalore's new police commissioner issued a memo to police stations trying to rein in widespread corruption. The circular begins: "It is alleged repeatedly in the press, as well as by the members of the public, and the floor of the legislature, that police officers have converted their police stations in Bangalore city as offices to settle land disputes and are taking huge amounts of illegal gratification. This does not augur well for our department." The next 16 pages are filled with instructions for handling suspected mob activity and land disputes. Officers are threatened with strict censure if they fail to comply. Unfortunately, the guidelines are toothless because the department has yet to find an effective way to police the police.

Collusion between enforcers and mobsters raises troubling questions about the future of this city. "Since Bangalore went global, things have gotten worse," says Santosh Hegde, his graying hair dyed jet-black and a chain of prayer beads around his neck. He's the state official responsible for prosecuting corruption cases. "Businesspeople want to get things done quickly, and they have no option but to bribe officials to shortcut the bureaucracy," he says.

Hegde, 68, served six years on India's Supreme Court before taking the anticorruption beat. He oversees a team of accountants who burrow through documents and field operatives trained in covert recordings and sting operations. Since assuming office, Hegde has charged more than 300 officials with receiving cash bribes totaling over $250,000 and illegal assets and land holdings worth $40 million. That's just 5 percent of total bribery in Karnataka, he says, which he estimates at more than $800 million. When we meet, local newscasters are reporting his latest triumph: the arrest of five civil servants who had allegedly collected $1.5 million in illegal assets and cash.

Hegde blames the avalanche of corruption on the outsourcing boom. "Certainly IT companies contribute to the problem," he says. "They work with people who have only a shady title to the land. Then they occupy buildings that are constructed illegally, without permission from the authorities. I don't want to name specific firms, but huge companies build illegally here."

Hegde lodges a new case almost every day, but the power of his office is limited. To bring a case to court, he needs permission from what regulations call "the competent authority." This usually means the malefactor's superior officer, who has little motivation to expose corruption within his own department.

Hegde has reviewed two complaints that mention Muthappa Rai. In one case, a landowner alleged that Rai's men tried to intimidate him into selling a lot in Electronics City, a Bangalore suburb packed with IT companies. He asked the police for protection. "The officer told him that it was best to settle—an obvious case of corruption," Hegde says. "We began an investigation, and suddenly the man who filed the complaint disappeared. We had to close the case."

Still, Hegde remains hopeful—and defiant. "I have lived a full life already," he says. "If they kill me, I will die happy. And if Muthappa Rai gets public office, he'll be under my jurisdiction," he adds with a wry smile.

Back in his mansion on the outskirts of Bangalore, Rai stretches out on a leather sofa and smiles. "Foreign companies come in and everything improves," he says. "I have seen this happen the whole world over. Now I'm helping make it happen here."

Scott Carney (www.scottcarneyonline.com) covered the Tata Nano, the world's cheapest car, in issue 16.07.

Back in December 1996, sci-fi novelist David Brin warned that street cams would soon be everywhere ("The Transparent Society"). In his dream for the future, every citizen would have full access to the image stream. So far, the authorities have enjoyed a one-way view. But Brin was right that each year, surveillance tech would get tinier, more mobile, and more clever.

Estimated value of the US surveillance cam market in 2000: 2.4 billion Estimated value in 2007: $4.7 billion

Number of visible street cams in lower Manhattan in 1998: 769 Number of street cams in 2005: 4,176 Estimated number by 2009: 7,176

Cost to install a camera in the town park in Liberty, Kansas (funded by a federal grant : $5,000 Population of Liberty, Kansas: 95

Number of feet from which a camera can read a license plate: 1,000 Percentage change in red light violations after Philadelphia installed cams: -96

Hours an unmanned surveillance helicopter can hover: 18.7 Minutes a robo-dragonfly (toting a minicam and image-recognition software) can fly: 3

Cost to produce a moth cyborg, which Darpa hopes to turn into a remote-controlled spy bug: $15 Grams a moth cyborg can carry: 5

Check this out," Massimo Banzi says. The burly, bearded engineer wanders over to inspect a chipmaking robot—a "pick and place" machine the size of a pizza oven. It hums with activity, grabbing teensy electronic parts and stabbing them into position on a circuit board like a hyperactive chicken pecking for seeds. We're standing in a one-room fabrication factory used by Arduino, the Italian firm that makes this circuit board, a hot commodity among DIY gadget-builders. The electronics factory is one of the most picturesque in existence, nestled in the medieval foothills of Milan, with birdsong floating in through the open doors and plenty of coffee breaks for the white-coated staff. But today Banzi is all business. He's showing off his operation to a group of potential customers from Arizona. Banzi scoops up one of the boards and points to the tiny map of Italy emblazoned on it. "See? Italian manufacturing quality!" he says, laughing. "That's why everyone likes us!" Indeed, 50,000 Arduino units have been sold worldwide since mass production began two years ago. Those are small numbers by Intel standards but large for a startup outfit in a highly specialized market. What's really remarkable, though, is Arduino's business model: The team has created a company based on giving everything away. On its Web site, it posts all its trade secrets for anyone to take—all the schematics, design files, and software for the Arduino board. Download them and you can manufacture an Arduino yourself; there are no patents. You can send the plans off to a Chinese factory, mass-produce the circuit boards, and sell them yourself — pocketing the profit without paying Banzi a penny in royalties. He won't sue you. Actually, he's sort of hoping you'll do it.

That's because the Arduino board is a piece of open source hardware, free for anyone to use, modify, or sell. Banzi and his team have spent precious billable hours making the thing, and they sell it themselves for a small profit — while allowing anyone else to do the same. They're not alone in this experiment. In a loosely coordinated movement, dozens of hardware inventors around the world have begun to freely publish their specs. There are open source synthesizers, MP3 players, guitar amplifiers, and even high-end voice-over-IP phone routers. You can buy an open source mobile phone to talk on, and a chip company called VIA has just released an open source laptop: Anyone can take its design, fabricate it, and start selling the notebooks.

Banzi admits that the concept does sound insane. After all, Arduino assumes a lot of risk; the group spends thousands of dollars to make a batch of boards. "If you publish all your files, in one sense, you're inviting the competition to come and kill you," he says, shrugging.

Then again, Linux sounded pretty insane, too, back in 1991, when Linus Torvalds announced it. Nobody believed a bunch of part-time volunteers could create something as complex as an operating system, or that it would be more stable than Windows. Nobody believed Fortune 500 companies would trust software that couldn't be "owned." Yet 17 years later, the open source software movement has been crucial to the Cambrian explosion of the Web economy. Linux enabled Google to build dirt-cheap servers; Java and Perl and Ruby have become the lingua franca for building Web 2.0 applications; and the free Web-server software Apache powers nearly half of all Web sites in the world. Open source software gave birth to the Internet age, making everyone—even those who donated their labor—better off.

Can open source hardware do the same thing?

Every open source project begins with an itch that needs scratching. Linux was launched when Torvalds decided he didn't like the operating systems available to him. The top three—Microsoft's DOS, Apple's operating system, and Unix—were all expensive and they were closed; Torvalds wanted a system he could tinker with. As it happened, a lot of other geeks wanted the same thing. So when Torvalds began working on Linux and sharing his code, other hackers were willing to pitch in and help improve it for free—creating a virtual workforce that was infinitely bigger and smarter than Torvalds himself. That is the central benefit of open source projects: They're like a barn raising in which everyone gets to use the barn. Somebody has a problem and creates a tool to solve it. And once the tool is created, hey—why not share it? The hard work has already been done. Might as well let others benefit.

Arduino began the same way. Banzi was a teacher at a high tech design school in Ivrea, Italy, and his students often complained they couldn't find an inexpensive, powerful microcontroller to drive their arty robotic projects. In winter 2005, Banzi was discussing the problem with David Cuartielles, a Spanish microchip engineer who was a visiting researcher at the school. The two decided to design their own board and enlisted one of Banzi's students—David Mellis—to write the programming language for it. In two days, Mellis banged out the code; three days more and the board was complete. They called it the Arduino, after a nearby pub, and it was an instant hit with the students. Almost anyone, even if they didn't know anything about computer programming, could use an Arduino to do something cool, like respond to sensors, make lights blink, or control motors. Then Banzi, Cuartielles, and Mellis put the schematics online and spent 3,000 euros to make the first batch of boards.

"We did 200 copies, and my school bought 50," Banzi says. "We had no idea how we'd sell the other 150. We didn't think we would." But word spread to hobbyists worldwide, and a few months later there were orders for hundreds more Arduinos. Turns out there was a market for this thing.

So the Arduino inventors decided to start a business, but with a twist: The designs would stay open source. Because copyright law—which governs open source software—doesn't apply to hardware, they decided to use a Creative Commons license called Attribution-Share Alike. It governs the "reference designs" for the Arduino board, the files you'd send to a fabrication plant to have the boards made.

Under the Creative Commons license, anyone is allowed to produce copies of the board, to redesign it, or even to sell boards that copy the design. You don't need to pay a license fee to the Arduino team or even ask permission. However, if you republish the reference design, you have to credit the original Arduino group. And if you tweak or change the board, your new design must use the same or a similar Creative Commons license to ensure that new versions of the Arduino board will be equally free and open.

The only piece of intellectual property the team reserved was the name Arduino, which it trademarked. If anyone wants to sell boards using that name, they have to pay a small fee to Arduino. This, Cuartielles and Banzi say, is to make sure their brand name isn't hurt by low-quality copies.

Members of the team had slightly different motives for opening the design of their device. Cuartielles—who sports a mass of wiry, curly hair and a Che Guevara beard—describes himself as a left-leaning academic who's less interested in making money than in inspiring creativity and having his invention used widely. If other people make copies of it, all the better; it will gain more renown. ("When I spoke in Taiwan recently, I told them, 'Please copy this!'" Cuartielles says with a grin.) Banzi, by contrast, is more of a canny businessman; he has mostly retired from teaching and runs a high tech design firm. But he suspected that if Arduino were open, it would inspire more interest and more free publicity than a piece of proprietary, closed hardware. What's more, excited geeks would hack it and—like Linux fans—contact the Arduino team to offer improvements. They would capitalize on this free work, and every generation of the board would get better.

Sure enough, that's what happened. Within months, geeks suggested wiring changes and improvements to the programming language. One distributor offered to sell the boards. By 2006, Arduino had sold 5,000 units; the next year, it sold 30,000. Hobbyists used them to create robots, to fine-tune their car engines for ultrahigh mileage, and to build unmanned model airplanes. Several quirky companies emerged. A firm called Botanicalls developed an Arduino-powered device that monitors house plants and phones you when they need to be watered.

In one sense, Arduino's timing was perfect. There's a resurgence of DIY among geeks interested in hacking and improving hardware, fueled by ever-cheaper electronics they can buy online, build-it-yourself publications like Make magazine, and Web sites like Instructables. In recent years, hackers have been aggressively cracking consumer devices to improve them—adding battery life to iPhones, installing bigger hard drives on TiVos, and ripping apart Furby toys and reprogramming them to function as motion-sensing alarm bots. Inexpensive chip-reading tools make it possible to reverse-engineer almost anything. That's how Chinese hardware copycats rip off products so quickly.

Want to join the world of Arduino developers? Wired editor in chief Chris Anderson already has, designing two Arduino-based autopilots for unmanned model aircraft: ArduPilot and BlimpDuino (you can find them at diydrones.com). Here's his formula for getting your creation out and into the world.

1 Download the Arduino schematic and circuit board files from arduino .cc. Use the free version of CadSoft Eagle (from cadsoft.de) to modify them for your particular creation.

2 Upload your files to a board fabricator like BatchPCB. Your boards will be manufactured in Chinese robotic-electronics factories and sent to your house. Typical cost is $10 each.

3 Order bulk electronic parts from digikey .com and solder the components onto the board to make a prototype. Test the board and your code. You're ready to distribute your gizmo to the masses!

4 If you want to produce and sell the product yourself, use a manufacturing service like Screaming Circuits to assemble the boards on robotic pick-and-place soldering machines.

5 Alternately, an open source hardware specialist like SparkFun or Adafruit can make and sell the product for you. They'll add a profit margin and pay you a license fee .

6 Publish your revised schematics and circuit board files so that others can modify them. The cycle begins again.

This is the unacknowledged fact underpinning the open hardware movement: Hardware is already open. Even when inventors try to keep the guts of their gadgets secret, they can't. So why not actively open those designs and try to profit from the inevitable?

"Apple never open-sourced the iPod, right? But if you go down to Canal Street in Manhattan, there are copies all over the place," says Limor Fried, founder of Adafruit Industries, a Manhattan company that makes and sells open source hardware ranging from the Arduino board to devices Fried designs herself. "It doesn't matter anymore whether your product is open source. Someone in another country is going to open it up and reverse-engineer it anyway."

Like the Arduino team, Fried has found that when people have access to the plans of her inventions, they suggest improvements; they almost can't help themselves. In 2006, when Fried released the design for MintyBoost—an Altoids tin crammed with AA batteries you can use to recharge your MP3 player or phone—some users complained on her forum that it wouldn't charge their devices. Other posters jumped in to analyze the problems and devise fixes; some even sketched out replacement circuitry. (MintyBoost is now Fried's most popular invention; she has sold 8,000 of the gadgets for about $20 each.) In essence, her customers are also her tech support—available 24/7, at no cost to her.

"But how do you make any money?" Whenever Banzi or Cuartielles describe their Arduino strategy, they're inevitably asked this question. And it's a genuine puzzle, because open source hardware isn't quite like open source software. Software costs almost nothing to reproduce; Torvalds didn't need to spend money every time someone downloaded a copy of Linux. But the Arduino team has to pay to produce its boards before it can sell them. Under traditional economic logic, this requires a patent; nobody is going to risk money inventing and selling hardware unless they can prevent competitors from immediately ripping off their designs and pouncing on their market. So how do you make money in a world of open hardware?

Right now, open design pioneers tend to follow one of two economic models. The first is not to worry about selling much hardware but instead to sell your expertise as the inventor. If anyone can manufacture a device, then the most efficient manufacturer will do so at the best price. Fine, let them. It'll ensure your contraption is widely distributed. Because you're the inventor, though, the community of users will inevitably congregate around you, much as Torvalds was the hub for Linux. You will always be the first to hear about cool improvements or innovative uses for your device. That knowledge becomes your most valuable asset, which you can sell to anyone.

This is precisely how the Arduino team works. It makes little off the sale of each board—only a few dollars of the $35 price, which gets rolled into the next production cycle. But the serious income comes from clients who want to build devices based on the board and who hire the founders as consultants.

"Basically, what we have is the brand," says Tom Igoe, an associate professor at the Interactive Telecommunications Program at New York University, who joined Arduino in 2005. "And brand matters."

What's more, the growing Arduino community performs free labor for the consultants. Clients of Banzi's design firm often want him to create Arduino-powered products. For example, one client wanted to control LED arrays. Poking around online, Banzi found that someone in France had already published Arduino code that did the job. Banzi took the code and was done.

Then there's the second model for making money off open source hardware: Sell your device but try to keep ahead of the competition. This isn't as hard as it seems. Last year, Arduino noticed that copycat versions of its board made in China and Taiwan were being sold online. Yet sales through the main Arduino store were still increasing dramatically. Why?

Partly because many Asian knockoffs were poor quality, rife with soldering errors and flimsy pin connections. The competition created a larger market but also ensured that the original makers stayed a generation ahead of the cheap imitations. Merely having the specs for a product doesn't mean a copycat will make a quality item. That takes skill, and the Arduino team understood its device better than just about anyone else. "So the copycats can actually turn out to be good for our business," Igoe says.

NYC Resistor,a club for hardware hackers in Brooklyn, looks like a madscientists' lab, strewn with motorized doll parts, hot-rodded electric guitars, and Tupperware containers crammed full of electronic junk. I'm here to meet with Raphael Abrams, a cofounder of the group. Abrams, 33, is well known in open source hardware circles for developing the Daisy, an open MP3 player. It earned him so much acclaim that he now works more or less full-time designing open projects and customizing audio hardware for other businesses, including hunting companies that hire him to develop duck and deer calls. ("I'm the go-to guy for digital animal-caller designs," he says. "It's the weirdest thing that has ever happened to me.")

Abrams is deep in conversation with Alicia Gibb, a grad student who hacks hardware in her spare time. She's talking about a matchbox-sized widget that museums use to monitor humidity and temperature in their galleries. It's made by Masterpak and retails for $115 (similar devices can cost $400). A single institution might need hundreds of them, so it's a lucrative little market.

But as Abrams and Gibb pick apart the gadget, they realize that the price carries a huge markup.

"This is worth about $15 in parts," Abrams says, whistling as he pokes at the tiny electronics board inside. "It has a really cheap low-end chip. And they charge $400 for this? Someone is getting robbed." He tosses it on the table. "You could sell it for $80."

Gibb gets a playful look in her eye. "I'm gonna do an open source version of this thing," she says. "Wait a minute," I say. "That means any museum will be able to take your free design and fabricate copies itself? Or someone who isn't even an inventor—like me—could send your design to a Chinese factory, produce a couple of thousand devices for $20 apiece, and sell them to museums for $50?"

"Sure," she says, grinning.

I hear the sound of a thousand business models crumbling.

If Gibb actually pulls this off without violating any patents, the company that makes the overpriced widget is in for a shock. No more easy profits based on the obscurity of its intellectual property. It will immediately have to offer a better product or improved service—or risk going out of business.

This may be destruction—but it's creative destruction. Business models will crumble, sure, but others will be born. Open source methods illustrate a hard, cold fact about hardware: It's increasingly becoming a commodity. It is not merely that China has massively decreased the price of producing goods. It's that the price of designing goods is dropping through the floor. As Eric von Hippel, an MIT professor of entrepreneurship, points out, that drop is the result of the emergence of cheap or free tools for chipmaking, 3-D modeling, and online collaboration.

"In a sense, hardware is becoming much more like software, up to the point where you actually fabricate an object," von Hippel says. "That's why you're starting to see open source techniques in hardware. Design is largely going to shift out from manufacturers to the communities."

To thrive in this next wave, hardware manufacturers will have to switch their thinking. Their job is no longer just to dream up ideas—it's equally important, maybe even more vital, to seek out innovations from users. Manufacturers used to have to guess what their customers want, but the customers already know what they want, so it's more efficient to have them design it. The value of manufacturers isn't in cool designs but in economies of scale: They produce high-quality objects cheaply or offer superb shopping and support experience.

I can't help but think there are limits to this. Passionate amateurs can create an MP3 player or a synthesizer. But what about a jet engine? Or a car? To pass regulatory tests, these products require expensive laboratory equipment, like wind tunnels for car shapes and airplane parts, or crash labs. That can't be accomplished by a bunch of loosely connected designers surfing on their laptops in a Starbucks.

Yochai Benkler isn't so sure. The Harvard professor and author of The Wealth of Networks predicts that smart commercial firms will share resources with open source communities. "If you want to design a car in an open source way, maybe you'll work with a corporation that has access to an expensive wind tunnel," he says. This sort of cooperation has become common for open source software. IBM and Sun Microsystems pay staff members to contribute to Linux because it's in the companies' interest to have the software grow more powerful, even if competitors benefit.

Consider the WRT54G wireless router made by Linksys. It was released in 2002 as a simple $150 router for home use. But hobbyists quickly discovered that its firmware—the software that determines the device's abilities—was based on Linux and thus legally open source. Within months, hackers had written new code that gave the device radically new features: They boosted the antenna power, turned it into a signal repeater, and constructed self-healing neighborhood mesh networks. Most of these capabilities are normally found only in devices that cost 10 times as much. Suddenly, the WRT54G market expanded. Based on the free work of amateurs, the router is now one of Linksys' all-time best-selling products.

Mani Dhillon, director of product marketing for Linksys, says the hacking has boosted the router's sales by opening up new uses. "It's a pretty strong and vocal community," he says. "We definitely credit a certain amount of the success to them."

Still, while open source hardware may be exciting, it's also confusing—even terrifying. Pioneers in the field admit they have no idea how to make the jump from small boutique hardware to mass-market devices. Banzi occasionally wonders whether he is simply being a fool by giving away some of his best work on the Arduino.

"If the Arduino chip gets bigger and better and more well known, someone in China will make it for 50 percent less. That is clear," Banzi says over dinner at a late-night Milanese restaurant famous for its coastal Italian cuisine. He stabs at his enormous bowl of orecchiette and sips some red wine, half smiling, half wincing as he imagines his work being plundered by a cut-rate offshore outfit.

"I think there's a fine line," he says, sighing, "between open source and stupidity."

It's possible that open source hardware buffs will ultimately focus not on competing with the for-profit world but in filling niches otherwise ignored.

That's what David Rowe did. Rowe is an Australian engineer who founded and then sold an Internet telephone business. He decided he wanted to help the developing world produce low-cost, high-quality telephone routers. He wanted something that would allow a company to plug in cheap, old-fashioned analog phones and place calls on inexpensive voice-over-IP networks.

"It's a huge need in Africa, but all the hardware that currently does this is, like, $2,000 a pop," Rowe says. "African companies can't afford that." He wanted to design a device many times cheaper than that, but no existing phone-router company was interested in servicing such a low-margin market.

Rowe didn't think he could do it alone, so he organized it as an open source project. In 2005, he found a cheap chip that managed voice and data, and he wrote software for it. Sure enough, once he put the schematics online, word spread and interested hackers in Canada and Bulgaria began offering improvements. Some optimized the software; others figured out how to tweak the hardware to handle extra phone lines or how to collapse the box into a single super-powered phone line.

"We'd get stuck on a problem, and I'd hop on instant messenger and talk to the other guys and say, 'What's going on here?' I discovered that the community can figure it out a lot more quickly than I can," Rowe says.

When the time came to manufacture the device, Rowe didn't know how to find a factory. But it turns out he didn't need to. Early last year, he received a message from a Chinese firm saying it had read about the project and was interested in producing it for him. A few weeks later, the routers arrived in the mail and worked practically perfectly. Rowe commissioned the plant to begin making batches of 50. He was able to keep the unit price down to $450 and still turn a small profit on each one. By summer 2008, he had sold a few hundred of them.

As you'd expect, Chinese competitors have already begun to manufacture routers that compete with Rowe's. He doesn't care; on the contrary, he's happy about it, because his primary goal for the devices is for them to be as cheap as possible, and fierce competition will accomplish this faster. (He and his competitors also share advice on how to improve the hardware.) A group of high tech consultants have begun selling support services to anyone who buys the router. Ideally, Rowe would like to see factories in African countries manufacture the routers, since this would bypass the punishing tariffs that make importing hardware so expensive for Africans.

Meanwhile, Rowe has become a star in high tech international-development circles, getting flown around to speak at conferences. "There's no way I would have gotten this far—and so quickly—had it been closed," he says. "This would have been a typical $4 million or $5 million startup if we had done it the usual way." Rowe isn't sure how the project will evolve. Will he wind up getting outcompeted, pushed out of business? Will some major hardware company offer to make the product on a massive scale?

"A lot of people got scared when I told them I was going to do this open. They were like, 'Is this going to work?'" Rowe says.

His answer: "I'm not sure."

Contributing editor Clive Thompson (clive@clivethompson.net) wrote about the making of Halo 3 in issue 15.09.

Hey, want to be my friend? It's more than possible; it's probable. Hell, we may already be friends—I haven't checked my email in a few minutes. And once we are, we will be, as they say, 4-eva. A perusal of my Facebook Friend roster reveals that I, a medium-social individual of only middling lifetime popularity, have never lost a friend. They're all there: elementary school friends, high school friends, college friends, work friends, friends of friends, friends of ex-girlfriends—the constellation of familiar faces crowds my Friendbox like medals on Mussolini's chest. I'm Friend-rich—at least onscreen. I've never lost touch with anyone, it seems. What I've lost is the right to lose touch. This says less about my innate lovability, I think, than about the current inflated state of Friendonomics.

Think of it as the Long Tail of Friendship—in the age of queue-able social priorities, Twitter-able status updates, and amaranthine cloud memory, keeping friends requires almost no effort at all. We have achieved Infinite Friendspace, which means we need never drift from old pals nor feel the poignant tug of passive friend-loss. It also means that even the flimsiest of attachments—the chance convention buddy, the cube-mate from the '90s, the bar-napkin hookup—will be preserved, in perpetuity, under the flattering, flattening banner of "Friend." (Sure, you can rank and categorize them to your heart's content, but who'd be callous enough to actually categorize a hookup under "Hookup"?)

It has been argued that this Infinite Friendspace is an unalloyed good. But while this plays nicely into our sentimental ideal of lifelong friendship, it's having at least three catastrophic effects. First, it encourages hoarding. We squirrel away Friends the way our grandparents used to save nickels—obsessively, desperately, as if we'll run out of them some day. (Of course, they lived through the Depression. And we lived through—what, exactly? Middle school? 90210? The Electric Slide?) Humans are natural pack rats, and given the chance we'll stockpile anything of nominal value. Friends are the currency of the socially networked world; therefore, it follows that more equals better. But the more Friends you have, the less they're worth—and, more to the point, the less human they are. People become mere collectibles, like Garbage Pail Kids. And call me a buzz kill, but I don't want to be anyone's Potty Scotty.

Second, Friending has subsumed the ol' Rolodex. Granted, it's often convenient to have all of your contacts under one roof. But the great thing about the Rolodex was that it never talked back, it didn't throw virtual octopi or make you take movie quizzes, and it never, ever poked you. The Rolodex just sat there. It was all business.

Third, and most grave, we've lost our right to lose touch. "A friend may well be reckoned the masterpiece of Nature," Emerson wrote, not bothering to add, "and like most things natural, friendship is biodegradable." We scrawl "Friends Forever" in yearbooks, but we quietly realize, with relief, that some bonds are meant to be shed, like snakeskin or a Showtime subscription. It's nature's way of allowing you to change, adapt, evolve, or devolve as you wish—and freeing you from the exhaustion of multifront friend maintenance. Fine, you can "Remove Friend," but what kind of asshole actually does that? Deletion is scary—and, we're told, unnecessary in the Petabyte Age. That's what made good old-fashioned losing touch so wonderful—friendships, like long-forgotten photos and mixtapes, would distort and slowly whistle into oblivion, quite naturally, nothing personal. It was sweet and sad and, though you'd rarely admit it, necessary.

And maybe that's the answer: A Facebook app we'll call the Fade Utility. Untended Friends would gradually display a sepia cast on the picture, a blurring of the neglected profile—perhaps a coffee stain might appear on it or an unrelated phone number or grocery list. The individual's status updates might fade and get smaller. The user may then choose to notice and reach out to the person in some meaningful way—no pokes! Or they might pretend not to notice. Without making a choice, they could simply let that person go. Would that really be so awful?

I realize that I may lose a few Friends by saying this. I invite them to remove me. Though I think they'll find it harder than they imagine. I've never lost a Friend, you see, and I'm starting to worry I never will.

Email scott_brown@wired.com.

Last time Wired caught up with J. Craig Venter, he was tooling around the South Pacific, collecting microbes and dreaming of hatching life from man-made DNA (August 2004). This year, the biologist took a giant leap when his team engineered a synthetic version of a real organism's entire genetic code. Venter picked M. genitalium, a bacterium with one of the smallest nonviral genomes on the planet — just 582,970 base pairs. Here's how they did it:

1 // Venter's team sequenced M. genitalium's DNA to create a blueprint. (The code was later tweaked so the bacterium wouldn't be infectious.)

2 // They then ordered short, custom-made DNA sequences (fewer than 7,000 base pairs each) from specialized biotech firms.

3 // To assemble the delicate crystalline strands of DNA, the scientists harnessed the genetic material of E. coli as a host, resulting in fragments one-quarter the length of the total genome.

4 // Brewer's yeast was added to stitch together the four final strands. Then enzymes were used to remove the yeast. Later this year, the lab plans to boot up the genome inside a cell. Venter claims his work is the precursor to man-made critters designed to, say, make fuel or consume CO2.