Thoughts and alternative proposal on HF20

in hf20 •  last year

We just got done with hardfork 19 and the next one is already in planning. While it's great to see developers being active, I have to say I'm not fully satisfied with the proposed changes.

It's not yet a time to focus on getting millions of users onboard

We have seen a lot of new users coming to Steem lately. That has brought up the problem that I've written about a few times: the signal-to-noise ratio is getting worse. There is just too much stuff to see, it's getting harder and harder to find content that I actually like.

It's bad for readers: they have to spend more time to find something enjoyable.

It's bad for writers: they have a harder time to get followers.

If the user experience is getting worse because we are getting more new users, why we would want to focus on getting even more new users?

That's why I'm not very excited to see plans of getting millions of new users to Steem. We just don't have yet any tools to filter all the content and customize it to create a great user experience. The UI just can't handle a big userbase at this point.

Instead of getting as many new users as possible, I suggest focusing on getting better users. Instead of getting comment sections flooded with "nice article, please follow me" comments, let's try to create more meaningful discussions.

In short, we can't focus on quantity yet. First, we have to focus on quality.

I understand the desire to get as many users as possible – it's very common for startup firms – but it's really not necessary. Steem is still in beta and at this point, we need more high-quality users who are willing to invest their time and money to the platform to make it better.

One way of getting a higher quality userbase is to make users pay for their own account. When people invest their own money, they take the service much more seriously. They care much more about their reputation. They want to see the platform to be successful in the long term.

I'd love to see an easy way to buy a new account. Especially we need a way to buy an account with fiat currency.

If we tell clearly to the new users that a Steem account is valuable cryptoproperty, I don't see much harm that they are required to pay for it. They are getting value for their money, after all. It's like buying a lifetime subscription to a service.

More decentralized alternative for user signup

While I prefer new users buying their accounts, I admit that there are still a lot of potential users who don't want to or can't afford to buy an account. The Steem ecosystem needs a way to get them onboard, too.

The HF20 proposal isn't very good. It's quite complex and creates a many ways of misuse potential. Especially removing the dust vote threshold seems dangerous. If automated spam was a bad thing earlier, isn't it still bad? The intention is good, to give new users a chance to interact with the blockchain always, but it also means that spammers will have the same chance.

I'd love to see Steem trying more viral user acquisition strategy: let existing users invite their friends. To be able to do that, we need an easy way for users to create an account for a friend.

I suggest a new kind of token that can be used to create one account. It's almost like SBD: the blockchain makes sure that one SAT (Steem Account Token) is always backed with enough steem to let new users have enough Steem Power for their account.

SAT will be transferable. Users can buy, sell and donate them.

SPOW instead of OPOW

One of the great innovations of Steem was to introduce the concept of subjective proof of work. It's different from objective proof of work, like mining, because it's based on subjective opinions of users instead of objective measurements like hashing power.

SPOW is the way of distributing rewards in Steem. It's calculated by upvotes of users.

The benefit is that with SPOW we can use the blockchain to fund all kinds of stuff, not only incentivize block production.

From the whitepaper:

In effect, the criteria by which work is evaluated is completely subjective and its definition lives outside the source code itself. One community may wish to reward artists, another poets, and another comedians. Other communities may choose to reward charitable causes or help advance political agendas.

The value each currency achieves depends upon the demand for influence within a particular community and how large the market believes each community can get. Unlike prior systems, subjective proof of work enables a community to collectively fund the development of whatever it finds valuable and enables the monetization of previously non monetizable time.

The obvious question is then: Why not use SPOW to create new accounts?

When a developer or a community leader wants to create new accounts for new users, they just need to write a post describing what they are doing and choose to get the reward as SAT instead of SBD, steem or SP. If the community likes the idea or effort, they will get lots of upvotes and they'll be rewarded with SATs that they can use to create accounts.

Much better alternative for OPOW

I really, really dislike traditional proof of work mining. It wastes huge amounts of energy and computing equipment. I happen to care a little bit about the environment so I strongly oppose all OPOW mining blockchains.

Seeing a proposal to include wasteful mining back to Steem blockchain was a very unpleasant surprise. I hoped that we would have a consensus by now that it's really bad thing in every way.

Let's sum up the negative sides of proposed account mining:

  • It wastes energy and incentivizes the production of mining equipment. All that is taken away from actually productive work so it's negative for the whole society.
  • Because accounts can't be created for free, somebody is always paying for them. With mining, the miners are paying for them with fiat money that they use to buy electricity and mining equipment. So the value will flow outside of the Steem ecosystem for electricity and mining equipment producers.
  • Using Litecoin's algorithm means that there exists a huge amount of mining power outside of the Steem community. It's like giving away all the new accounts for people who have already scrypt mining equipment.

I really can't see how the Steem community could benefit from having OPOW-mineable accounts, especially with an algorithm that's already used by another big blockchain.

Instead, using SPOW-mineable accounts will be much better choice. No wasted electricity and accounts will be given to the members of the Steem community. Because Steem accounts are valuable cryptoproperty, it means that the value won't flow outside our community to Litecoin miners and electricity companies.

There won't be any changes to the inflation model. Basically the current inflation is just allocated differently. Instead of steem, SBD or SP, new tokens created by inflation will be allocated as SAT.

There is another problem requiring immediate fix

One thing that I want to see fixed in the next hardfork is SBD.

The pegging mechanism is completely broken which makes SBD unusable as a currency. It needs to be redesigned or removed. It's not wise to keep broken features in the blockchain.

This might be a little bit controversial proposal, but I think the best solution would be to replace Steem Backed Dollar with Steem Account Token.

Anybody could earn SAT by blogging, just like they can earn SBD. If they don't need SATs, they can use the internal exchange to sell them to those who need them. If we remove SBD, the internal exchange could have a new life as an exchange for SAT.

Backing SAT would work basically the same way as backing SBD. There will be a virtual supply that is used to fund a new account with SP when SAT is used to create the account. I'm not a programmer but I think this is pretty much the same thing as using SBD to steem conversion.

Replacing SBD with SAT would be double beneficial: we would get rid of broken feature and get a new and needed one instead.

With more viral user acquisition, I suspect that we will have higher quality users. When more new users come because their friend asked them and gave them the account, they will care more about the platform than random people who heard about this somewhere and made an account just because it was free. This will make the whole platform more attractive for other potential users and, of course, creates better user experience for old users.

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I just want Equality gone.. it is not healthy. people is not voting, even if they (we) like.
I want minnows to vote more that "10 times" without having to use systems they are not aware of that help them to reduce a VP% for a given upvote.

This Equality is not good when there are so many users that don't even log in. And some of them just wnat their STEEM/SBD traded ASAP because they won't commit to a system they don't even understand, while they are getting $1 a week because their posts and comments are only upvoted by them as no one wants to vote.

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This post received a 4.8% upvote from @randowhale thanks to @jofg! For more information, click here!

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Ok, I managed to get my comment on the top of the list! Thanks randowhale!

I fully agree about the superiority of SPOW over OPOW.

It looks like it all depends on what is perceived as more valuable to the ecosystem:
-- me upvoting my own content (which I am allowed to do)
-- or me bringing a new user (which I am not allowed to do)

As of now Steem prefers the former and HF20 does not really change that. Quite stupid.

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There have been some rumors of referral system maybe coming someday. That would help, probably, depending on how it's implemented. With SAT it would be easier, because with it there's not much work required to analyze whose SATs are used by new users.

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Yeah, I quite like your idea of SAT. My only concern is that it introduces one more level of complexity to a system which is already quite complex. But maybe in this case it's worth it, especially if it makes the referral system easier.

Yet maybe for now the easiest way out is to just allow users to raise SP via posting and then use it to create new accounts for their friends. Or just spend their own SP for that purpose. I would gladly do that but I cannot - unless I am not aware of this functionality in Steem (please let me know if that's the case).

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My only concern is that it introduces one more level of complexity to a system which is already quite complex.

If we remove SBD at the same time, the overall complexity doesn't get higher. It might get even a little bit smaller. For SAT, there is no need for price feed because the price of one SAT is set by witnesses, it's the account creation fee.

Yet maybe for now the easiest way out is to just allow users to raise SP via posting and then use it to create new accounts for their friends. Or just spend their own SP for that purpose. I would gladly do that but I cannot - unless I am not aware of this functionality in Steem (please let me know if that's the case).

It is possible already. Any account can create as much new accounts as they want (if they just have enough steem to pay account creation fee, which is transferred to the initial SP stake of the new account). But Steemit.com hasn't yet implemented it in the UI, you have to use cli_wallet instead.

There are a few problems in this, even if it was easier.

Psychologically it might be better if users have tokens that can only used for account creation and for nothing else. Although it can be transferred (which enables it to be used like a currency), its primary function is account creation so that's how most people will use it most of the time. And it's much easier for the community to watch if the rewards of posts are used for helping new users or not.

Then there might be regulatory benefits. Of course the taxman does what he pleases, but it might be possible (at least in some jurisdictions) to make a claim that SAT is not taxable income – the purpose of the token is to help the system get new users, not to make money for the person who earned it. Basically it's just a right to decide who can get a new account on the platform, and not income.

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If we remove SBD at the same time, the overall complexity doesn't get higher.

For me SBD is a fundamental part of the ecosystem. But I get your point: SBD is quite useless without the peg.

But Steemit.com hasn't yet implemented it in the UI, you have to use cli_wallet instead.

That's really a shame. In HF20 they aim for a mobile app, yet still the basic functionality is missing on the webpage. A classic example of messing up the priorities.

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"Psychologically it might be better if users have tokens that can only used for account creation and for nothing else. Although it can be transferred (which enables it to be used like a currency), its primary function is account creation so that's how most people will use it most of the time."

While I do support the sponsorship model for new account creation, the statement I quote here is an unwarranted assumption. For example, people can buy stuff with Air Miles, which were never intended to be a currency with that potential for use outside of airline promotions.

Without deliberate breaking of functionality of any token which is tradable, it is impossible to state categorically that it won't become just another currency.

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Can you provide a link to what exactly the HF20 proposal is? I am interested. But do not know where to find the proposal.

STEEM On!!

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Thanks for the reference. Final question - what is the target date to go into production?

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I don't know, the development progress seems to have slowed down. HF20 will definitely not happen before it is announced by @steemitblog.

Interesting reading.. I'm a newbie here, but I have to agree with you, everytime i click on the New section i see hundreds of new posts.. in just minutes! I'm trying to post interesting and unique content, but it get lost in the crowd! I guess that will be disappointing for new users, so many of them will quit quickly.. don't know if that's good or not o.O

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Yeah, it's bad. That's why other social media platforms, like Facebook, have automatic algorithms to select what will be shown to the users. The problem is, of course, that users will then see only what Facebook wants them to see. They no longer control the experience themselves.

Steem has a chance to make users to be in control. We just need tools to create a custom feeds, based on what we are likely to be interested in. Also we need a much better notification system, otherwise a lot of posts worth reading will be missed.

Fortunately there is the community feature coming, which I think will help a lot.

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I was a user of tsū.com before they closed the door, but before they did close, they introduced a community system.
That made it, almost overnight, become a much better way of finding what you wanted to see.
Tsū was a lot like steemit, the monetary system was different, but essentially it worked like steemit in how users got paid for posting.
Before the community system most users found things by the tags associated with the posts.
Each community had a head moderator who essentially was paid a percentage of the value of all posts, they were allowed to have up to two deputy mods who got paid a percentage of the head moderator's income from the group.
This system worked great.

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It couldn't have been completely awesome if tsu.com closed their doors. Do you know why they went under?

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Lol, tsū was, unknown to general users, explained as an experiment when they all of a sudden closed their doors without notice.
Loads of tsū family here now.
But the Groups/Communities addition was like the days in the old West when the gov opened up new land to settlers, people stampeded for the "Owner" status of the group's that they wanted because the owner took 50% of all post income from the groups.
You were required to have a balance of $100 in your account before they would cut a cheque, that made a lot of people angry when they closed and didn't have enough in their account!
Pretty shady dealings really.

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Interesting background. Thanks for providing info. 50% going to group owner was clearly the wrong number. But I could see concept working and being reasonable if it was something like 5%; as payoff for all the curation work that would be needed to be a good owner of each community.

No obvious reason why steemit.com would shut down in the short term. As long as there is a 9% or 10% inflation rate there will always be some type of rewards pool to distribute. And if confidence in platform grows, the open market price of STEEM could continue to rise which will attract continuing interest for new entrants.

STEEM On !!

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Cheers Dave!

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How do you know the community feature is coming? Can you provide a reference to what HF20 will be providing?

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This might help you Dave - https://steemit.com/steemit/@steemitblog/proposing-hardfork-0-20-0-velocity
You can read this and pay attention to the Conclusion.

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Thanks for pointer. Looking forward to the millions of new users, errr, sort of.

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How do you know the community feature is coming?

It's mentioned in the roadmap: https://steem.io/2017roadmap.pdf

Hmm, interesting, SAT rather SBD. Maybe SAT could be used for other things too, like post promotion. They could be useful for all sorts of things and we could call them Steem Highpowered Interactive Tokens..err, ok maybe I'm not the best for names..

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Yeah, SAT might become a currency just like SBD is now. Instead of pegged to the price of US dollars, it's pegged to the price of a new Steem account. It could be traded in cryptoexchanges just like any other cryptotoken.

Referral program would be the most obvious feature to be built with SAT. With SAT-created accounts it would be easy to track who got the new user to come.

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LEL

Always with the smart comments, this @neoxian!

I agree with all the problems brought up here but I don't think making people pay for accounts fixes anything and just creates a bad new user experience.

Maybe we should limit reach if there's too many low upvote posts by one user within a set time. Although it still creates issues with people creating tons of accounts.

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It's already limited how many transactions an account can make and it's depending on how much SP the account has. I don't think that's a big problem, it's just a question of adjusting the limitations to be suitable for the needs of the community.

The real problem is that we can't give away truly free accounts because they will be hoarded immediately. Somebody has to pay for them. So the question is: who will be the payer? I think the fairest solution is that everybody will pay for themselves. But of course we will get a lot more users when there is a way to donate accounts.

My proposal of SPOW-mineable accounts is basically just a way to make sure that steem earned by posts is used to create new accounts instead of something else. Part of the inflation will be marked as "can be only used to create new accounts".

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Maybe we could have a community vote or something? So the introduce yourself post would be something that based on either not getting a flag or getting enough upvotes would be how new accounts are approved. The only problem would be could the community keep up?

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The namespace would be also a problem. If a new user registers an account but makes a bad introduction post, they won't get any SP but they still have the name of the account. That means nobody else can't get that name anymore.

Also different languages will become problematic. Not everybody can write English.

And not everybody even want to introduce themselves, they are not interested in blogging but just want to have a cryptocurrency wallet.

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Namespace everyone is familiar with due to Reddit, Yahoo, etc. having the same issues. Wallet wise I guess we could say pay a small amount or post.

SBD might be broke not in how it is coded into the system but the hype in crypto makes it more likely that sbd and steem are being used more for trading. Unless you can control the centralized exchange market, the peg will be broken by the thousands of traders who only look at the major exchanges and never even use the assets on their native platforms.

Time to be a bit divergent

I like the criticism!

I would take it one step further than working on the front-end first. I would prefer they work on the protocol level first. I see way too many flaws in this experiment on the blockchain level to allow any more beta testers (although to be fair, it's more like an alpha, right?). STEEM is the first of it's kind, getting to mass adoption too soon could end in a catastrophe. Would be a shame to waste so much potential!

I don't know if the SBD peg is broken, maybe the introduction of promoted posts has changed everything? But i'm no expert on the subject at all.

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I would prefer they work on the protocol level first. I see way too many flaws in this experiment on the blockchain level to allow any more beta testers

What do you think are the most important problems at the protocol level currently?

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The most crucial ones:

  • Curators are rushed into curating (often don't even have time to read the content)
  • Curators have no monetary incentive to vote on others (self-votes earn more)
  • Curators have no monetary incentive to flag content (it effectively costs money, without any return)
  • Content can only receive rewards once

Early adopters problem:

  • Whales still have too much impact

Great and thoughtful post.

One insight you bring is that signal to noise is becoming a more significant problem. This is greatly exacerbated by the 400% acceleration in VP decay that HF19 brought, as decreasing our ability to curate to a 1/4 of what it was to a Steemit that sees an order of magnitude more posts than were made when HF19 was first discussed dramatically degrades our ability to curate content from this influx of new accounts.

Regarding account creation costs, I'll point out that, while account holders clearly benefit from gaining an account, Steemit also benefits. Estimates I have seen indicate the value of a new account to be at least $300, and range much higher.

Current political landscapes have created an expectation that new accounts not require financial investment. Various factors create this expectation, but they're not in Steemit's control. It simply isn't realistic to expect new accounts to be widely adopted in the current environment if doing so requires an investment in money, rather than merely time.

I'll point out that, regardless of whether I wanted to or not, I could not have opened an account on Steemit that required any financial investment at all. I hope few would think my presence on Steemit to be a bad thing for Steemit.

I strongly support a sponsorship model for new accounts, and this is essentially what the current model is, although the current model is broken by being to financially draining. I suspect that reputation, as it represents vetting by the community, may be useful as a means of doling out account creation tokens potentiating new account sponsorship.

Whatever is done needs to be financially without cost for new accounts, as people who aren't familiar with Steemit are incapable of understanding how it is different in practice from other social media, and therefore highly unlikely to be willing to invest in an account.

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Current political landscapes have created an expectation that new accounts not require financial investment. Various factors create this expectation, but they're not in Steemit's control. It simply isn't realistic to expect new accounts to be widely adopted in the current environment if doing so requires an investment in money, rather than merely time.

I'd love to see this tested. We can all argue all day long whether or not new users are willing to pay for an account, but it's probably just waste of time. Easiest solution would be to try it for a while and see what happens. My guess is that it's just a marketing problem: if we explain clearly why an account is valuable, potential users will understand it and pay without complaining.

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God I love science! As you point out, it is something easily testable.

Let's test it. Well, let's hope 'they' test it =p

Definitely agree on quality over quantity. I think it'd be a good idea to have people pay for their accounts. For all the same reasons you listed. Since it's possible to make money with a Steemit account, it's not at all unreasonable to ask for a one time payment.

I'm not sure about SBD, though. Right now, it's broken. But I'm currently not in favor of removing it, since I think a price stable crypto token has value. It gives STEEM an edge over BTC, for instance.

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I'm not sure about SBD, though. Right now, it's broken. But I'm currently not in favor of removing it, since I think a price stable crypto token has value. It gives STEEM an edge over BTC, for instance.

So far it has given very little value. It was a better idea when steem was hyperinflationary and people needed a stable alternative, but now that steem has only a modest inflation, there is much less need for a price stable currency in the ecosystem.

I'm still catching my breath from HF19

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And I'm hating HF19.