How and Why Decentralization Wins on Steem

in SteemLeolast year

How and Why Decentralization Wins on Steem - Steemleo.png

One of the many benefits of leveraging cryptocurrencies and blockchain tech is for the value of decentralization and Web 3.0. A decentralized system has the potential to drive more value to the users, developers and entrepreneurs who choose to buidl on those systems as opposed to build on top of centralized systems where the rules can change like the flip of a switch.

In the early days of Steem, Steemit, Inc. (Ned Scott and Dan Larimer) ran a ninja-mine operation in order to gather as much STEEM stake as they could.

Their reason for doing this is so that they could legally launch STEEM without making it a security. It has since become a common practice for newly launched cryptonetworks.

The issue with this is that it creates a great deal of centralization around the entity who launched the network and subsequently “ninja-mined” the tokens that drive the network. When one entity controls too much of the total supply, issues of centralization and power struggles naturally arise. Most people are inherently power-hungry and will seek to control things so that they might fix an outcome in their favor.

Over the past several years, we’ve seen a decrease in the centralization of Steem. As time has passed, content creators, users, developers and entrepreneurs on the Steem blockchain have bought & earned massive quantities of STEEM which has led to the wider distribution of the currency and the dilution of Steemit, Inc.’s power over this chain.

The stake was never used to vote on consensus, which made the chain appear more decentralized than it actually was. Once Justin Sun got his hands on Steemit’s stake, the entire game was flipped on its head as 1 person now held the keys to the Steem kingdom and could sway the rules of the chain in any way he wanted.

What followed is now what we are experiencing in the present. A power struggle between the decentralized Steem community and the entity known as Steemit, Inc. which is now being driven by Justin Sun.

When you first hear this story, you might wonder how a decentralized group of rag-tag individuals could ever stand up and face someone who has so much power. One entity with vast resources, connections and the largest stake in the network.

The witness rankings, however, tell a much different story. They tell a story of how Steem has become more and more decentralized since its inception. How each passing day, week, month and year has led to the dilution of Steemit’s power over the governance of this chain. It’s a beautiful thing to see power drain from centralized power structures into decentralized, community-operated power structures.

"Blockchains are politically decentralized (no one controls them) and architecturally decentralized (no infrastructural central point of failure) but they are logically centralized (there is one commonly agreed state and the system behaves like a single computer)” - Vitalik Buterin

Steem is Winning Web 3.0

"Decentralized networks can win the third era of the internet for the same reason they won the first era: by winning the hearts and minds of entrepreneurs and developers."

"An illustrative analogy is the rivalry in the 2000s between Wikipedia and its centralized competitors like Encarta. If you compared the two products in the early 2000s, Encarta was a far better product, with better topic coverage and higher accuracy. But Wikipedia improved at a much faster rate, because it had an active community of volunteer contributors who were attracted to its decentralized, community-governed ethos. By 2005, Wikipedia was the most popular reference site on the internet. Encarta was shut down in 2009.” - Chris Dixon

This blockchain is obviously not perfect, but that is not to say that it doesn’t have amazing qualities and a track record proving the validity of collective will and decentralization.

Take a look at — I was here over 3 years ago when this was really the only way to use the Steem blockchain. shortly became my interface of choice for obvious aesthetic reasons, but Steemit is the original interface of this blockchain. It is also a centralized interface that has only really been managed & maintained by Steemit, Inc.

If you read the analogy that I quoted above between Wikipedia and Encarta, you can see why Steemit has continuously lost its user base to alternative interfaces and dApps on the Steem blockchain.

Rapid improvement and decentralization.

For all its faults, the Steem blockchain is one of the most decentralized blockchains in the world. Look around at other chains like EOS and TRON and you’ll see just how decentralized Steem really is.

We have thousands of content creators, developers, investors, businesses and communities who all work to buidl in their little corner of Steem. Granted, in the context of centralized entities like GAFA (Google, Apple, Facebook and Amazon), this is a drop in the ocean.

In the context of crypto & blockchain, however, this is a massive level of adoption and decentralization. There is no 1 entity that is 100% responsible for development on this blockchain. Instead, there are many entities that are all working separately but together on the collective goal of making a better dApp, building a bigger community, creating a great piece of content or sizing up a more meaningful position in the STEEM token.

"Centralized systems often start out fully baked, but only get better at the rate at which employees at the sponsoring company improve them. Decentralized systems start out half-baked but, under the right conditions, grow exponentially as they attract new contributors.” - Chris Dixon

The reason why Steem exists today is the very same reason why decentralized systems are superior to centralized systems in the long-run:

Centralized systems start out good. They start out fully-baked and with a full feature set for their users.

Decentralized systems start out “bad”. They start out with a lack of features, a lack of use cases and often even a lack of vision.

When Steem was created, Dan & Ned had no idea that Splinterlands, 3speak, Actifit, Steem-Engine, Communities, etc. would be created on Steem. They were focused on their interface and their vision.

In the beginning, there was centralization.

Since then, decentralization has spread like a virus on this blockchain. A virus with good intent.

Posted via Steemleo


Staking coins, in general, have an issue with centralization as the one with the most coins generally gets the most rewards. Anyone could just buy up Steem and thus buy up power over the chain. DPoS seeks to make it harder with voting, but clearly, Steems voting system isn't full proof since he was able to make new sock puppet accounts and attempt to game the system.

I think this calls for an age-based DPoS attribute for witnesses. The longer you own the staked coins then the more influence you can have on the chain. It could help, but that may just centralize things further for whales who are witnesses. Some of these changes will end up helping whales and hurting new users in the long run.

It is good, but we need to stop the fight and maybe do a chain split. At the moment is the status quo without advancement.

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