EOS is not free to use
Yet no transaction fee?
Yes, it is a lot like Steem, resource credits {RC} based.
Set some stake.
Every interaction with any blockchain will put a strain on the available resources. There are factors like RAM (memory), CPU (processing) and NET (storage) that are being used. Every transaction has its own type of operations. EOS can add 2 blocks per second to its blockchain. Each having transactions in them with certain operations running. The more of these per block, the heavier it weights on the resources of the blockchain system. That will have its reflection on the EOS based stake price of the needed resources for every single interaction.
With HardFork 20 Steem got their own system installed, known as Resource Credits {RC}. At first it was set at quite a low amount. After which it was almost impossible to interact with the Steem blockchain. Although it was experienced as a very unpleasent experience by many, it did unintendly show how stake determines the usage limits. When it gets set to high, meaning you need to have a huge amount of Steem Power at stake, only a few can post, reply, vote and so on. Finding the right levels is very important in a resource based system.
The resource market
One thing that can put an extreme unwanted strain on an information storing blockchain, like Steem, is SPAM. The same accounts for EOS and a lot of other blockchains out there. Even the Bitcoin blockchain can be flooded with useless low value transactions, not paying a transaction fee. Delegated Prove Of Stake {DPOS} based blockchains can put a limiter on that, in a more effective way than Proof Of Work {POW} ones can.
Supply and demand can be used on a DPOS system to keep the strain on the blockchain system under control. Meaning that also SPAM accounts need to put in enough of their own skin. And the more it tries to flood the blockchain with its SPAM, the more resources it needs to put at stake. Finding the right resource limiter settings might take a while, but I think at the long run it will adjust itself almost perfectly. That accounts for the Steem Resource Credit system too.
Not really gratis, but still free
It is always possible to pull the tokens put on stake back out. This means less influence on the blockchain system of course. Unless the demand drops, so less stake is needed to interact with the blockchain. It can also turn around in the other direction, where higher demand needs more tokens to be put at stake. Then the user decides if it is worth investing more, or not.
While the user, group or company, has enough skin in the game, they can interact with the blockchain without any apparant transaction fee. In reality though there is a resource usage charge that an account is being credited for. With Steem this resource usage limiting system does work like a self recharching accumulator. Like Whaleshares uses Mana, Steem uses Resource Credits. (And still has Voting Power, for some reason unclear to me, as a seperate and intregrated(?) resource usage limiter.)
True transactions
There are these false claims being made in the cryptos realm that the 24 hour transaction volume for EOS is fake. Just like for the other DPOS based blockchain systems that have free, but not gratis, transactions. These transactions do come at a price, but they are settled by the use of a stake system. Where one could even argue that the price is payed for with the build in inflation.
No matter what though DPOS based blockchains proof they are ultra fast and can scale easily. Unlike Ethereum that seems to choke on kittyfur. Currently the main three DPOS based blockchains do over 6 million real transactions a day, backed by resources put in stake. While not even braking a drop of sweat. And Ethereum can not even do 10% of that and has to deal with unconfirmed transactions...
It seems to me that those who claim EOS has mostly fake transactions, because they are 'free', does not understand how DPOS functions. Ah well, what else is new... To me it is the most clever blockchain system so far. Now, when can we get to only using the Resource Credits at Steem and lose the superfluous Voting Power thing...?
Transaction fees still has Ethereum chocking on kittyfur.
Screenshot taken at http://blocktivity.info
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TrufflePigThere is one significant problem with the way that you describe the mechanisms in both the steem blockchain and EOS:
They don't describe a market.
Economics 101. To qualify as a market, you need certain things to exist.
A resource to be traded.
That we have.
A demand for that resource.
That we have.
And finally, some would say absolutely crucially, a price signaling mechanism so that those with the demand can evaluate those offering the resource, compare them, and purchase it via exchange.
That we pointedly do not have. And there is really no interest in implementing price signaling in this market, which is a sad thing. If for no other reason that it would facilitate the means by which you could properly load balance accesses across multiple servers.
In order to have a price signaling mechanism, we would have to have some sort of means by which when you go to make an interaction with the blockchain, you are alerted to how much it will cost in RC. Then you can decide whether to make that transaction or wait (or take that transaction to another platform).
Ideally, each witness would price bytes, storage required, and bandwidth required separately and individually for each witness server. A client would query several (and have the possibility of adding or removing from that list on a user level), check for the best prices, and give the user the option – along with the option to tell the client "make the best deal you can at any given point." But the user has to be presented with a price.
As it stands, the steem blockchain doesn't have a market for resources. It has a dynamic limiter, where transactions have a fixed cost and the pools are communal. The pool costs vary, but there is only one pool per resource and no competing providers.
It's deeply disingenuous to refer to anything of that order as "a market."
Even though I understand your arguments, I am still keeping it like it is.
The simple definition would be: a market is a place where supply and demand meet. It is a market in the most basal form.
The tension between demand and supply will set a price. It works for resources too.
And that's it for me.
Just meeting does not a market make. Everyone wants things, some people make things, but it doesn't matter if I'm supplying something you don't want, and it doesn't matter if you want something I'm not making, even if we come together in the same place.
If there is one supplier, there is no market. There is just a limit on exchange. If the consumer has no choice, that is they have no real indication of what that price is, there is no market. They are not involved. They have no means of engagement. Either they get the thing that they want or they don't and there is no decision-making along the way.
There is an absence of the one thing that is absolutely required for there to be a market: feedback.
This is important for the way that the steem blockchain "prices" RC expenditure because there is literally nothing you can do as a consumer to engage with a provider. There is no competition. There is no price signaling to allow a customer to decide whether they even want to engage in the first place.
Without that signaling, there is no market. There is just a resource pool limit and that's it.
Calling it a "market" gives it a dignity it doesn't deserve.
It's a shame that it's not a real market, because then witnesses might be able to compete amongst themselves to see who could deliver a witness node for the least price which still covers their expenditures. That would be interesting and make the whole system more efficient. It would even incentivize witnesses to potentially offer different classes of service, a high-speed, high responsive node with an expensive API versus a node with slightly less responsiveness but lower cost, perhaps making it more feasible for new and small users to engage with the social media aspects of the system because they don't have a need for sub-second API response.
And that's terrible, because incentivizing innovation is one of the things that blockchain technology is supposed to be about, if you believe the hype.
Your suggestion for a real blockchain resources market is interesting, I think.
Do not know if it can be applied to the current DPOS blockchains, like Steem, Whaleshares and EOS. It might be a next step.
With DPOS the witnesses need to keep up to the standards of the blockchain demands. Telos even lets blockproducers proof if they are up to it.
With the DPOS system a user can decide to put more stake in, leave it like it is, or pull some out. Yet a future innovation might show a solution that makes it possible to integrate your proposal into a blockchain system.
Blockchain tech is still in its early years. Never thought something like Steem would even be possible. Yet here we are.
So, something like you describe might not be that far away. There are things that still surprise me like https://friendup.cloud, also a blockchain innovation. We've not seen it all yet, I guess.
There's no reason that a proper market can't be set up for DPOS systems.
Of course, there has to actually be exchange, which is one of the reasons the RC system also fails to be a market. When I commit an operation to the steem blockchain, I sacrifice the RC. I burn it. No one actually acquires that RC in exchange for what I am allocated temporarily from the pool. It is a pure limiting mechanic.
If, however, instead of burning RC I gave it to whatever provider was giving me bandwidth/disk storage/blockchain overhead, the witness node, and there was a use for RC for witness nodes which would return it into the overall economic ecology, we would have an actual market.
The problem is from the perspective of a witness node, a user is a pure cost. There is nothing in a direct sense that I offer as value to a witness node that they would be interested in trading RC for. Or anything, really. That speaks to a larger problem which is that witnesses have an active and powerful disincentive to want to increase the number of users on the steem blockchain because every new user is implicitly a consumer of bandwidth/disk space/blockchain operations and thus a cost.
You might counter that the more users, the more likely that the crypto-commodity of STEEM will increase in value, and that's true. Simultaneously, the more users who are creating content, not only the more overhead a witness node must maintain but the likelihood of more spread voting which will dilute any given witness's position in the pool, the more likely there will be more competition for being a witness there is, and the nonlinear nature of the means of replication for witness nodes on the steem blockchain very well may more than eat any possible advantage.
This is just a limitation in using the wrong technology for the wrong solution. Blockchains are a terrible solution for providing a database backend for social networks. An absolutely horrible idea. The storage replication issue alone is a nightmare.
Anything is possible in the future, but some things are definitely limited by the axioms of information theory. And by basic real economics.
Could we see an actual market for witness node resources? It's possible. Are we going to? Not on the steem blockchain.
Thanks for the extended reply, will read it tomorrow.
The only thing left for me to reply is that maybe we might agree that we disagree.