Blog rewards CAN’T be widely distributed

in steem •  2 years ago

This is my analysis of the design constraints I have concluded the designers of Steem faced w.r.t. the author reward algorithm(s). I am not covering the curation rewards in this post, except for a brief mention w.r.t. whales.

Note this derives entirely from my own thought process and I’m not privy to any discussions the developers may have had, except for what is in the white paper and what I’ve read on Steemit, e.g. @theoretical’s blogs. So I might possibly have mistakes. If anyone can find any errors in my thought process, please offer your ideas and corrections in the comments section.

Even if this post makes you sad, you might consider to still respect my research and effort. Lying to ourselves won’t help us achieve our goals of transforming the world to a better place. I remain devoted to striving to reach those ideals.

Trade-offs of Available Design Options

Steem computes how the votes divide the pot of money for author rewards.

  1. Weighting each vote equally, i.e. linear weighting, would enable at least two egregious vulnerabilities:
    • Voters could vote for their own posts as the maximum profit strategy because the imparted reward per voter is not tied to any risk of popularity, so those who vote their conscience would eventually over time have their wealth redistributed via debasement to those who always voted for themselves.
    • The ban on transferring STEEM POWER could be subverted by voting on whom you wanted to transfer to, without any risk of loss of (proportional) value (in the money supply). This would enable consolidating free signup balances to meet the theshold for powering down without earning any rewards from blogging. Fake Facebook accounts can be obtained for pennies and even for free if they are resold after employing them to signup free Steem accounts. So attackers could drain the 40% (i.e. ~$80 million) of the Steem money supply that is earmarked for free signup rewards.
  2. Weighting each vote according to its share of the square of the total number of votes on each blog post, i.e. quadratic weighting, nullifies the vulnerabilities from #1 if each blog can’t be sure to receive a sufficient¹ share of the total vote, but it enables at least two (arguably tolerable) vulnerabilities:
    • A maximum profit strategy for the case where sufficient voters are able join together in a pact to upvote each other’s blog posts so these blogs receive a sufficient¹ share of the total vote. For example, an attacker’s legion of free signup accounts (a.k.a. the result of a Sybil attack on free signups).
    • The existence of whales make it unlikely for pacts of the lesser fish to achieve that sufficient¹ share of the total vote.

Steem Chose Whales With Quadratic Weighting

Steem appears to have had no choice but to choose #2 and accept that the existence of whales is absolutely necessary to nullify the other vulnerabilities which lead to degenerate outcomes. But the necessary existence of whales is in itself a (perhaps tolerable) degenerate outcome.

Deviant whales could maximize profit by voting for their own or blog posts that provide kickbacks, because a whale’s vote has such a great influence on the total vote of a blog post both in terms of the whale’s vote power and the increased ranking visibility creating a vortex of upvotes. Although we assume whales are benevolent and motivated to protect the long-term value of Steem, at some future juncture some (perhaps new takeover investors) whales might instead see the mature Steem system as ripe for harvesting both by capturing maximum units of STEEM while also shorting the price to offset any decline due to their abusive activities.

Additionally for blogs that (and especially if whales vote them early) garnish sufficient¹ share of the total vote (which they normally do with regularity), then whales’ share of the money supply can be always increasing (not counting the free signup air drops), i.e. the GINI coeficient can worsen. Note the curation reward algorithms are complex and not fully documented, so perhaps something was done to minimize this effect.

Which Means Rewards CAN’T be widely distributed

But another ramification is that whales can’t dilute their votes too much else they open the vulnerability for pacts to form to enable the first vulnerability in #2. Thus blog rewards CAN’T be widely distributed both for that reason and simply because it is too much cognitive load on the whales to be the deciders for millions of blog posts in a diverse ecosystem of preferences.

Onboarding is the Goal

My understanding from the white paper is that rewards were not intended to be the supreme feature for Steem. It is an onboarding marketing method, with bigger plans to come once the users are onboard. The exaggerated rewards for a fewer number of posts is stated in the white paper to be an advantage because it will cause users to overestimate their potential for earning on the site, i.e. it will cause excess enthusiasm.

The challenge for crypto-currencies has always been how to distribute them to the masses, so we can jump-start an ecosystem that includes more than just male cryptonerds. Steem is offering its imperfect onboarding paradigm and so far it is generating enthusiasm.


¹ By sufficient I mean that a vote is cast for a blog post which garnishes enough votes such that the imparted rewards weight of that casted vote is proportionally more than that vote’s proportion of the total systemic voting power. It is easiest to understand with a simple example. Imagine we have only 101 voters each with 1 unit of voting power in Steem, so each voter has 1/101th of total voting power. If 100 of the voters vote in groups of 10 each on 10 different blog posts, and the remaining voter is the sole voter on a blog post, then each of the 10 impart the square 10 × 10 = 100 rewards for a total of 1000 rewards, and the remaining voter only 1 × 1 = 1 reward. So the sole voter has 1/1001 of the total rewards, but the each of the other voters has 1/10th of 100/1001 rewards (i.e. 10/1001) which is 10 times greater. So we can say all but the sole voter participated in sufficient vote totals in order to receive outsized rewards compared to their proportion of the systemic voting power. The more egregious example would be if all of the voters each voted alone on a separate blog post, except for 10 of the voters that formed a pact to vote on a single blog post. So the pact of 10 would impart 100 times greater rewards (i.e. 10 times greater per voter) to the blog post’s author as compared to other voters.

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

The blogging platform is a Trojan Horse (Dan's term, never forget that)... basically a device to bootstrap something infinitely more valuable = a fast currency that can handle microtx on a general purpose platform.

https://steemit.com/steem/@dan/steemit-s-evil-plan-for-cryptocurrency-world-domination

In terms of the blogging rewards, it's meant to replace Google ad revenue that drives professional blogging. So any discussion that ignores how random whale upvoting will replace Google ad payments to professional writers misses the point.

This may be a harsh reality for some, but the world is not crying out for more 22 yo amateur bloggers.

·

Note that dilemma predicted by my 2016 blog is happening.

·

I had seen allusions to Dan's use of that term. Haha, I think he got that subconsciously from me, as I had so often referred to Bitcoin as a Trojan Horse of the DEEP STATE since 2013, and he has turned it around to have a positive meaning. I am just joking about him getting it from me, but I was known to be the one heavily using that term at Bitcointalk.

Of course most of us understand the motivation to move away from spamming ourselves with ads.

And the greater incentive for mankind is to stop the sort of censorship and theft of followers that the behemoth social networks are doing (see my comment reply to @spookypooky below).

As for professional bloggers, I think it is all about building community and monetizing the community. Ads are a form of that but they have low relevance which is why we find them spammy.

Thus intuitively I don't expect a globalized monetization to be conceptually correct. One of the differences between the design instincts of Dan and myself, has always been that I am looking for degrees-of-freedom and (at least in the past) he was trying to design in some globalized interest rate and collectivized monetary aspects. This was one of the key differences I observed between our thought processes when he and I used to discuss before he left Bitcointalk for his Bitshare forum. However, I also see he has innovated in ways that are insightful. I am thinking the globalized debasement can be used with some localized community degree-of-freedom, but I haven't yet worked out exactly how to do this. I am still in analysis mode.

Btw, this system is a tremendous accomplishment. A lot of development effort in this and an ecosystem with a lot of people contributing. Kudos.

This experiment is providing much data and a testbed for increasing our understanding; and is causing a lot of brainstorming in our cryptocommunity.

Edit: note I have replied to Dan's latest blog proposal.

This is a very insightful piece and a quality discussion as erupted. We are well aware of the limits of the system and are actively working toward a solution that could completely revolutionize the effectiveness of award distribution while mitigating the impacts of misbehaving whales.

·

Apologies I didn't immediately see your comment. Ah I had just finished commenting that I was pleasantly surprised that you upvoted my blog post. I didn't expect any whale to upvote it.

It is great that you are open to constructive criticism. And that you recognize the value of the blog posts which erupt into discussion, because I believe the highest valued content are those that increase engagement and foment sub-communities.

My blog post is also trying to help people understand that the options available for the design are difficult. It is not any diabolical master plan. Since you and I used to debate long ago in 2013 at Bitcointalk.org, you've been trying to find a way to onboard the masses to crypto-currency. Now you have something which is sort of working and has made a big splash, but there are still big challenges remaining in order to make this scale and diversify out.

I am very active in thinking about possible design improvements and tweaks, as I am sure are all of you who are already developers for the Steem ecosystem.

·

As I see it the major issue we'll have to face is not reward distribution (that can probably be fixed with hard-caps per post in order to force the rest of the small-medium rewards to increase) but long-term reward scaling.

-The user base is 50.000. When it goes to 50 million, it will be 1000x.
-The marketcap is 200mn. To keep the rewards "consistent", we'll have to experience a 1000x growth in the marketcap to reach 200 BILLION (bitcoin in comparison is 10bn).

In other words, the userbase can experience booming growth yet the reward pool cannot (in all probability). Which means the avg reward will go down a lot, and that's when the other attributes of the platform, like censorship-resistance, instead of "rewards" must come into play as a motive to participate.

I've made the analogy that early posters are like "early miners" of cryptocurrency, precisely due to the above issue of problematic reward scaling as the userbase increases: https://steemit.com/opportunity/@alexgr/contemplate-this-if-blogging-mining-then-early-blogger-early-miner

...but obviously this can't last for a long time without changes to the economic model or some kind of other tweaks to the economy, money infusion from outside our closed loop, etc etc. I guess we'll see what the devs have in mind for this...

·

that can probably be fixed with hard-caps per post in order to force the rest of the small-medium rewards to increase

No afaics, that would just open the vulnerability for pacts. Once you lower the threshold for sufficient¹ (see blog post), then you've reduced the protection against them.

Agreed on your other points, except I do think the market cap for a social network that somehow creates a new token ecosystem could be much higher than Facebook and perhaps even into the $trillions if the right confluence of factors comes about (e.g. the world realizes the negative profit future of the industrial age economy and wealth moves to the knowledge creation age economy), but that is a long shot so I will concede to your concern.

·
·

If, say, you have a 1000$ or even 500$ limit, I don't see right now how small votes can accumulate to that level. I have ~3500$ in SP and my vote is worth 2 cents. It would take A LOT of money to start hitting the limits.

·
·
·

You are forgetting the effect of the quadratic weighting. Refer again to footnote ¹ in the blog post. The amount of reward is the proportion of the total pot of reward. So if the pact reaches the sufficient level explained in footnote ¹, then the reward is outsized. Ditto curation rewards (I think).

·
·
·
·

Obviously, but still it takes quite a lot... I mean dantheman has ~3mn $ in SP and his upvote is like 140$.

·
·
·
·

I mean dantheman has ~3mn $ in SP and his upvote is like 140$.

If curation rewards weighted exponentially more the earlier you vote as I heard they are (and especially if they are 3 - 5 times author rewards as claimed by @james-show in the comments here), then @dantheman's $140 in author rewards could be good for perhaps an order-of-magnitude higher in curation rewards. I know you were thinking about thresholding author rewards, but if curation rewards are more lucrative for pacts, then you'd need threshold them also.

Also I don't believe @dantheman's upvote is only $140. That is probably because his voting power was diluted by numerous upvotes. I've observed @smooth upvote my post and it jumps several $100s or more when he hasn't been too busy voting recently. @ned upvoted my first blog after my #introduceyourself post and I think it was like instant ~$1000 boost.

Even if you threshold at $500, it won't solve the problem. You will still have a minority of the posts at $500 and the vast majority at a few dollars. The top tail of the power-law distribution is very steep, so not many posts above $500 any way.

You'll need to bring the threshold down to much less than $100 per blog post to really spread out the rewards widely and then you will open the vulnerability to pacts.

Remember my calculation from our discussion at BCT:

Do the math. Rewards are 7.75% of market cap yearly with 50,000 signed up users, so 0.0775 × $200m ÷ (12 × 50000) = $26 monthly per user. But the rewards are distributed non-linearly roughly in a power-law distribution where the upper 20% get 85% of the rewards, thus 80% of the users will get 0.15 × 0.0775 × $200m ÷ (12 × 40000) = $5 monthly. If you argue that actual usership is 1/10th of that, then multiple those figures by 10... Social networks are typically valued at around $100 per user, if we are looking at the stable case down the line. Even if we up that to say $1000 with expectation of acceleration and more ecommerce than typical social networks ad funded models, it is still only $77.5 per year per user without factoring in the power-law distribution effect.

Also I assume naturally income and blog quality is going to power-law distributed as well in any case, so we won't be able to widely distribute rewards in any case. The only way to widely distribute money is to make a few people very rich and the 85% get the crumbs. This is unfortunately the natural power-law distribution of wealth that always exists in every instance of humanity. I guess we can argue the distribution in Steem is even more concentrated (worse) than a natural power-law distribution. So maybe you are advocating thresholds to try to get closer to a natural power-law case, but the problem is the vulnerability comes into play and we are starting from a worse than power-law distribution due to the way the Steem token was launched. So afaics we'd have to compensate with a very low threshold.

·
·
·
·

Also I assume naturally income and blog quality is going to power-law distributed as well in any case, so we won't be able to widely distribute rewards in any case. The only way to widely distribute money is to make a few people very rich and the 85% get the crumbs.

The problem with Steem's voting reward algorithm is not that 20% get 80% of the rewards, but it is that the selection of the 20% is done by 1%. And this is motivating the wrong behaviors and focus of content produced.

·
·
·
·

I've observed @smooth upvote my post and it jumps several $100s or more

Some part of the difference is the drop in market value. My votes aren't worth what they used to be worth either.

The problem with Steem's voting reward algorithm is not that 20% get 80% of the rewards, but it is that the selection of the 20% is done by 1%.

I don't think it is really the algorithm as much as the distribution. With 50% of the daily-active stake controlled by 1-2%, no matter what algorithm you use, the 1-2% is going to run the show. Nothing can really change until the stake is spread out.

·
·
·
·

The problem with Steem's voting reward algorithm is not that 20% get 80% of the rewards, but it is that the selection of the 20% is done by 1%.

With 50% of the daily-active stake controlled by 1-2%, no matter what algorithm you use, the 1-2% is going to run the show. Nothing can really change until the stake is spread out.

Agreed.

Thanks for raising the point of clarification because no one can read my mind. In my mind I was thinking of selection algorithm in a more general sense of for example not allowing whales to vote (which I posited in this blog would be game theoretically vulnerable to attack) or not even using voting to select rewards. I haven't yet proposed any concrete ideas for a better algorithm for selecting rewards.

Note I am positing in this blog that spreading the stake out will be vulnerable to attack by collusion of voters.

·
·
·
·
·

@Anonymint, did you say only the top 1% decides who can be in the top 20% in Steem, to be the top whales? Are you saying that will always be the case? I was thinking that some people can become whales if they are popular enough to get upvotes each day by thousands or maybe someday by millions of people each day over the course of maybe many years and not just upvotes by bots.

Like I have been saying in previous comments, I want to believe that some people can slowly get into the top 20 percent. Are you saying that the top 1 percent will downvote potential whales if the top one percent decided to do so or something? And if the top one percent has that kind of power, then the question is whether or not the top one percent should have that much power over what might be basically their own FrankenSteem Creation, right?

·
·
·
·
·
·

Mathematically it would require dissension at the top and unanimity at the bottom w.r.t. to upvoting, which seems highly implausible.

·
·
·
·
·
·
·

Thanks for the response. Interesting. Upvoted.

I suspect the distribution of SP on Steemit will be comparable to Karma on Reddit. In 2015, the top 1% of Reddit users had 47% of the total Karma. If you can't see the following photo in detail, click this photo link: http://imgur.com/cfWa4Ty

In an older data set, the top 1% of users had about 20% of the Comment Karma (different from Total Karma):

Logarithmic Scale:

In this logarithmic graph, each number on the y axis is 10x the previous number:
1 = 10
2 = 100
3 = 1000
4 = 10000
5 = 100000
6 = 1000000

·

The problem with Steem's voting reward algorithm is not that 20% get 80% of the rewards, but it is that the selection of the 20% is done by 1%. And this is motivating the wrong behaviors and focus of content produced.

Also, you present a false dilemma: the notion that votes must be weighted linearly (or quadratically, however that works) , or not at all (1-man-1-vote.). And just as a side note, ive never heard anyone actually say that it ought to be one man one vote.

There are actually many models that could provide some normalization, while still giving regular voters some effect on ultimate outcome.

For example, the quadratic mean that i talked about above, or RMS, which i kind of feel like your post is implying we use now, even though im pretty sure we don't. I actually wrote a post about how something like that would help the rewards proccess, but ultimately decided why bother.

·

I replied to your other comment on this page. And that is enough already.

·
·

thanks, but i really don't need you to tell me when i can and can't post.

·
·
·

I meant that is enough for me replying to you already. Of course I can't control what you do. Thanks.

Tl;dr Join for the money, stay for the community.

·

I like that.

And for the censorship resistant storage of content on a blockchain. See what the centralized social networks do. No one should own and control our effort to build a following and our production.

I appreciate posts like this where the real guts of Steem are questioned and broken-down. If there are short-comings in the algorithm, my hope is that through experimentation and iteration, either improvements can be made here or similar competing platforms can come around and offer a slightly different -- and possibly better -- option.

I am impressed that @dantheman upvoted this blog post. I presume that is also @dan's account. I expected that no whale would upvote this blog post.

TLDR: Only the cream swims on top ?

What is your definition of "widely distributed"?

·

The most salient (mathematically accurate) response I can think of at the moment, is level at which thresholded rewards such that the vulnerability would become enabled. See my reply to AlexGR.

In other words, the whales must remain in control.

I might be way stupid here, but doesn't curation rewards being order of magnitude (or at least 3-5 times) bigger than the blogging rewards solve all the issues?

·

Can you expand a bit on that?

·

The white paper says curation rewards are 3.875% same as for author rewards. I heard the white paper needs to be rewritten because some major changes have occurred hence.

I didn't know that curation rewards are that high. I haven't really thought about how making them high would impact my thought process. But off the top of my head, it seems to me the same issues that apply to author rewards and the potential for pacts forming also applies to curation rewards. How do you see it mitigating the vulnerabilities I presented?

It seems to me curation rewards make it worse, because the minions have an extra incentive to vote with the whales.

·
·

Curation rewards are a maximum of 1/3 of the size of content rewards, but reduced from that maximum by votes in the first 30 minutes. The white paper has a lot of details like that wrong.

·
·
·

Is the full 7.75% (or the 10% yearly money supply created) allocated for author rewards and then up to 1/3 taken from that? That matters for my computation of the debasement rates. I am preparing to write Part 2 of my blog on that, so having the correct figures would be helpful.

·
·
·
·

2 STEEM per block are allocated to the reward fund. 75% of the reward fund is allocated for content and up to 25% for curation. There are floor percentages that kick in once the supply gets large enough and I think the numbers in the white paper for those are still correct.

Some interesting insights and perspective.

Actually, there is a solution to steem power transfer problem. Stop giving out steem power to new accounts and make Steemit invite only. If you want to invite someone, you just transfer some part of your steem power to that person, and you are all set. There is no other way to combat the bot account creators. I'm serious, if this issue doesn't get solved, it will come to bite steem community later. With vengeance

·

How we do we distribute ~40% of money supply that Steemit, Inc. controls and has earmarked for free signups?

Your suggestion would likely cause the adoption rate to plummet.

So basically youre saying that because you don't like how people would vote if their votes had any impact, their votes shouldnt have any impact. Thats fair enough, i guess. But the real argument youre making is one for centralization.

ANd its important to keep in mind that, regardless of the merits of centralization, you have a strong financial incentive to support an unbalanced system.

You can look at the price of steem over the past 30 days to see the real impact on blogging quality (and thus on the credibility of the platform)

Also, im not sure in what sense youre using quadratic weighting. I'm familiar with the quadratratic mean (aka root mean squared), which is a normalization method (the root of the sum of the squares), but im 98% certain steemit does not use this.

Voting weight is linear here, at least as far as ive observed. 1000SP has 10x the weight as 100SP, iiuc. am I mistaken here?

·

So basically youre saying that because you don't like how people would vote if their votes had any impact, their votes shouldnt have any impact.

No you apparently entirely missed the point of why a vulnerability could cause some attacker to siphon away all the wealth.

But the real argument youre making is one for centralization.

I am not making that argument; the game theory is. There are no good design options and that is the least likely to be overrun by an attacker.

Also, im not sure in what sense youre using quadratic weighting ... Voting weight is linear here

The white paper clearly says the reward is votes squared, which I also mentioned in the blog.

·
·

No you apparently entirely missed the point of why a vulnerability could cause some attacker to siphon away all the wealth.

As opposed to a few dozen select authors doing the same in exchange for hyping the currency and its centralized control system?

Yeah, i get where you stand. ANd so does everyone reading a post like this.

I don't think an analysis of the reward design can be done without including an analysis of the Curation Rewards.

For example,

A 'deviant whales does not maximise profits by voting on their own post', if their own post is subpar. They would be better off voting (at an optimal time) on a superior post. Assuming they spend an hour knocking up a plausible post, they would be better spending that hour voting on 5 or 6 superior posts. The Curation Rewards would outstrip the Author Rewards. The only advantage of the author rewards is being able to obtain liquid SBD rewards.

It is also worth noting that a deviant whale cannot just post anything and reap rewards. A sham post can easily be spotted and downvoted to zero by other whale/ voters, as that behaviour is against the long term interest of SP holders. The deviant whale will lose any rewards and also lose some of their reputation. In this sense the design is self-policing assuming the majority of participants are rational actors.

·

They would be better off voting (at an optimal time) on a superior post.

They can just work with a group of authors that pay them kickbacks. They can choose the best posts that come out of that group of slave authors. I mentioned kickbacks in my blog post. I've read recently that whales pay 'whisperers' to hunt for the best blog posts for them, so they could be instructed to recruit slave authors. I am not saying any our excellent whales are doing this now. We are talking about game theory for the future.

It seems to me curation rewards make it worse, because the Steeminions have an extra incentive to vote with the whales.

A sham post can easily be spotted and downvoted to zero by other whale/ voters, as that behaviour is against the long term interest of SP holders.

The whale can split up his voting power to hide his activities and/or the slave (kickback providing) authors can produce good content.

·
·

It seems to me curation rewards make it worse, because the Steeminions have an extra incentive to vote with the whales.

This a common misconception. "Steeminions" are actually disincentivised for voting with/ after the whales. A low SP holder gets nothing for voting on a post after a whale. The system works to reward people for voting before the whales on popular posts. It penalises the 'johnny-come-lately' voter. Once the one's jump in, it is irrational for a "Steeminion" to follow unless they truly think it is an exceptional post.

There is no need for a whale to initiate a mass conspiracy of kickbacks etc. They can just simply identify and follow good authors and cherry pick the posts that they want to upvote. Some openly have bots that auto-upvote who they deem good authors.

If you're a whale with say $0.5m- $1m worth of SP, it makes no sense to think like a small time hustler and indulging in nefarious activities for a few thousand extra dollars. The rational whale would either work to make the platform ultra successful or power down and take their money... rather than risk throwing it all down the toilet for small change.

·
·
·

This a common misconception.

I was aware of the before and after weighting of curation rewards.

A low SP holder gets nothing for voting on a post after a whale. The system works to reward people for voting before the whales on popular posts.

They can frontrun the whales. They can study what the whales like to vote for. It is the circlejerk effect so many people are mentioning.

I did it. I voted Jeff's posts early and earned outsized curation rewards when the whales voted later.

Also many minions may not realize they have to vote before, so they vote any way, because some whales did.

Also the pact knows what they are going to vote on, so there is no guessing involved.

If you're a whale with say $0.5m- $1m worth of SP, it makes no sense to think like a small time hustler and indulging in nefarious activities for a few thousand extra dollars.

Well there are scenarios where that isn't the case. For example, if you are a whale shorting the price and then you do activities which cause a run away from STEEM POWER, then you can drive the ratio of STEEM POWER to STEEM very low and you can stay in STEEM POWER minting money at 349% yearly as I showed the math for in my recent blog. Then on top of that dominating rewards at you take nearly all of them by gradually taking over more and more of the voting power. You are profiting in every way. That is sort of nuclear option though so I am not counting that as the likely one. Which is why I wrote in the blog post that "perhaps tolerable".

Also it does make sense to act like hustler because the deviant whale can convert illiquid STEEM POWER to liquid STEEM DOLLARS as rewards, so he can cash out sooner. Also can perhaps obscure that he is cashing out.

That $1 million in STEEM POWER can normally only be cashed out at ~$10,000 per week.

Game theory is very complex. It is very easy to miss some cases.

·
·
·
·

Game theory is very complex.

Sounds overly complex to me. I like to keep things simple. Running down the price to gobble up even more SP, will just leave the holder will a bag of worthless STEEM as people will simply move on to another platform. The sentiment already is that too much SP has been accumulated by founders and early miners.

They can frontrun the whales. They can study what the whales like to vote for. It is the circlejerk effect so many people are mentioning.

Voting on posts before they are popular is the name of the game (if you're curating for a profit). Right now the game IS crude. "Popular" posts are simply posts that whales are likely to vote on. Front running isn't circlejerking, it's rational, if you are curating for profit.

In the future spotting popular posts will be more nuanced. There are already different group of whales with different voting strategies. I know this because I've studied them and I'm currently earning curation rewards at a rate of over 100% pa return on my SP, simply by pre-empting their behaviour. In the future, this will become harder and harder to do this as more or more whales invest or earn their way up the ladder.

My point is, any whale "pact" (or predictable behaviour) can be counteracted by those further down the chain. Any "pact" that solely benefits whales, will simply see the rational 'minion' or 'dolphin' bail on the project, they will obviously be clones and alternative to Steemit around the corner (with likely a more even distribution). I don't think there is a pact as, in my experience, people are fundamentally useless at them!

The whales will simply be shooting themselves in the foot by getting too greedy because unlike most cryptos they cannot just dump their bag. If they choose to cash out in freshly minted SBD, they'll be leaving a lot more acquired SP on the table.

Loading...
·
·
·
·

@anonymint - You make many valid points. Indeed you may be reading the situation perfectly.

Steem is offering its imperfect onboarding paradigm and so far it is generating enthusiasm.

I agree with.

..too much cognitive load on the whales to be the deciders for millions of blog posts in a diverse ecosystem of preferences.

I agree with.

I agree with #1 and #2 in terms of your analysis of the vulnerabilities....

However I do think the analysis is incomplete without an acknowledgement of how the Curation Rewards play a factor (if the whales are acting rationally).

I also can't say I've seen the vulnerabilities in #2 manifest in terms of pacts amongst whales just yet. Of course it is possible. It certainly would be in tune with what happens in the rest of crypto.

However it would be so transparent and foolhardy, that I struggle to believe anyone can be that short-sighted, especially given the inroads Steemit is making into the social media space in such a short space of time.

I'm now convinced a blockchain based social media platform will take off. Steemit has first mover advantage. It doesn't need to be perfect (and isn't) it just needs to top Facebook etc., in terms of censorship and rewards to contributors, they can muddle their way through the rest. Steem could easily x10 x100 it's marketcap in short order if it reaches a critical mass of users. To blow that because whales are stuck in a crypto mindset? After only a month after the soft beta release? I guess stranger things have happened...

Loading...

https://steemit.com/steemit/@chitty/whale-s-dilemma#@anonymint/re-chitty-whale-s-dilemma-20160812t194021874z

Steem could hard fork to minimize whale’s power and have a better distribution of the steem token trough a more horizontal voting system.

Sorry I believe the bolded is an impossible option.

The only way would be to change from voting out of a shared pool of debasement to tipping from individual wallets, which is not a viable model.

Sorry IMO Steem is stuck between a rock and a hard place.

And the rich are now growing richer on Steem.

I'm not completely sure I understand your 2nd bullet on #1. Is it assuming that I go grab a huge pile of free signups, and then have each of them post articles and they all vote on one another's articles?

I think we need to very carefully consider how a 1-account-1-vote might be implemented via a semi-autonomous verification system. As things stand right now, the big voters are simply too big for minnows to have any financial incentive to stick around.

·

I'm not completely sure I understand your 2nd bullet on #1. Is it assuming that I go grab a huge pile of free signups, and then have each of them post articles and they all vote on one another's articles?

Even if we set a threshold for voting above the level given to free signup accounts, the attacker could buy STEEM POWER and vote his free signup accounts above the threshold. Then consolidate them by using them to vote (or just continue voting them up from his STEEM POWER) to reach the threshold for powering them down.

The point is that if we allow voting to be linear it enables targeting which accounts we want to transfer value to via voting, and popularity of the content becomes irrelevant in this attack.

I think we need to very carefully consider how a 1-account-1-vote might be implemented via a semi-autonomous verification system.

I assume you mean that if we can identify account holders then we can prevent Sybil attacks on free signups. But this isn't the only vulnerability with 1-account-1-vote (linear) weighting. Besides, account verification will likely drastically curtail signups, because nobody likes to be forced to do KYC just so they can try the site and vote.

As things stand right now, the big voters are simply too big for minnows to have any financial incentive to stick around.

In my opinion, unfortunately (or fortunately for me) it is impossible to fix without discarding the concept of voting from a shared debasement pool. I am moving on to completely redesigning a Steem-like onboarding mechanism

·
·

Then consolidate them by using them to vote (or just continue voting them up from his STEEM POWER) to reach the threshold for powering them down.

I see. I had misunderstood which threshold you were talking about.

Besides, account verification will likely drastically curtail signups, because nobody likes to be forced to do KYC just so they can try the site and vote.

Certainly. I've been kicking around the idea of a hybrid system where un-verified users have a stake-weighted vote, while verified users get an additional constant-weight vote. I haven't thought through the math, the implementation, or the vulnerabilities it might cause.

I am moving on to completely redesigning a Steem-like on boarding mechanism

I would love to be kept in the loop with whatever you develop; one thing that always frustrates me about this dev team is how ad hoc many of their solutions are, but you seem to consider stuff pretty carefully.

·
·
·

I would love to be kept in the loop with whatever you develop; one thing that always frustrates me about this dev team is how ad hoc many of their solutions are, but you seem to consider stuff pretty carefully.

Follow me. I will blog post if there is something. Thanks for the attention.

Should self-upvoting be disabled? And should whales be moral judges in deciding how much posts are worth or should whales be just like the minnows but with a lot of voting power in the ability to do whatever they want in who and what they upvote and downvote? I guess it goes back to the question of whether having whales is fair or not, right? Which goes back to the fairness of how big the whales were when Steemit started around I think 2016. Were the whales too big to fail or just too big in general originally? Can we ever become whales too? I want to believe that some can maybe become whales or at least bigger and bigger over time. I call it capitalism. I call it the game of life. Maybe some of these things are unfair, but better than Facebook, right? And until we are able to do better, at least we got things like Steem, Gab, Minds, Bit Torrent, Bitcoin, etc.

·

I’ll refer you to my other replies to your comments so I don’t repeat myself.

Don’t forget Yours.org and maybe soon Kik.

If you want to make any name suggestion for our project, then please comment on my next blog.

·
·

I joined Yours.org. Interesting. Thanks. Hope for the best. I do not know about Kik yet.

·
·
·

I am inviting everyone to feedback on a naming a new project which will attempt to fix these problems.

You will find a list of all extant tokenized social networks on distributed ledgers that I’m aware of.

·
·
·
·