This model is fair, legally sound, practical, and easy to understand. In the Ransom model, the programmers are paid by the simple demand and quality of their work, not by selling copies of their work by creating artificial supply restrictions.
The problem that Ransom solves is that many open source developers work very hard on their software projects, and usually end up giving their work away, due to the nature of open source. I firmly believe that their social-mindedness and generosity do not qualify as reasons why they shouldn't be fairly compensated for their work. It is impossible to ensure payments through open source software use, so the rules of publishing the software in the first place need to be changed.
Current models do not work since they are not fair to all parties. Purely "closed source" softwares not only severely restrict the user's abilities and freedoms, but also ignore the laws of value by ignoring software's ability for unlimited supply using a simple 'copy' command. Purely open source software removes any chance of reliable income from the programmer and leaves them to the whims of gifts and benefactors. Neither of these are acceptable.
Details: In short, Authors (the programmers of the software) first publish their work under a Ransom License (a special proprietary license). There exists the stipulation that the code will be automatically freed to a set Free License ([OSI]/[FSF]-approved or the public domain) once a set amount of funds have been collected from Contributors (satisfied users, grateful corporate customers, or distributors/resellers) or a set amount of time passes, whichever comes first. You can read details of the complete step-by-step process.
The public gets completely open source software, and the programmers are fairly compensated for the real work they do, not the amount of "copies" they sell. Public interests are protected by legally-binding guarantees and oversight organizations. You can read details of all features and considerations.
Issues: The current issues being discussed are:
Discussion: All discussion of Ransom occurs on the Ransom mailing list, to which you can [subscribe, unsubscribe, or manage]. The list is not moderated, but you must subscribe to post. You can also [read and search the archives] of the mailing list.
Background: This project began as an idea from a friend, Eric Murphy, on how to finance a digital identity system (which has now grown into [PingID]). I took the idea and posted to [Crynwr's Free Software Business list] about it. This project is the final realization on how to achieve financial compensation for producing open & free software.