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Jacob Cow, known as the nerd of the street, introduces the process of compiling software from source code in this tutorial. He explains that open-source software allows users to access and modify source code. While most programs can be downloaded as binary packages, occasionally, you may need to compile a program from source to install it. Compiling involves translating source code into a binary that can run on your computer. This process is necessary when the desired program is not available in pre-compiled form.