Steemit, Inc Supports 0.8.3
We believe all past and pending hard forks are in line with the recently proposed constitution. Over the next week a major irreversible distribution of Steem and Steem Dollars will be made. There has been a heated discussion on slack over which algorithm should be used to distribute funds.
New Curation Reward Algorithm
The hottest issue of dispute is the curation rewards algorithm. This algorithm has changed 4 times including the initial release. Steem 0.2.0 changed it by accounting for integer overflow. Steem 0.4.0 (April 29th) changed it by converting from r^3/R to r^3 / R^2 and Steem 0.8.2 changed it to another equation all together. All of these changes have been made in an effort to achieve a reward distribution proportional to effort and stake.
The first two changes were clear "bug fixes" designed to bring the code in line with the intended algorithm. The third change is different. It is a change to the intended algorithm with an effort to achieve an intended result.
There are currently 2 options that are on the table that witnesses must decide between by July 4th.
Steem 0.8.3
This version of the software uses the Steem 0.4.0 algorithm to distribute curation rewards prior to June 24th and uses the new algorithm for rewards after June 24th. Under this algorithm 40 people get 99% of curation rewards, 6 people get 75% of curation rewards, 3 people get 50% of the rewards, and 2 people get 42% of the rewards.
Steem 0.8.2
This version of the software will distribute all pending rewards using the latest algorithm which is designed to remove a strong bias toward rich accounts getting a disproportional rate of return on their votes. Under this algorithm 60 people get 99% of curation rewards, 13 people get 75% of curation rewards, 5 people get 50% of the rewards, and 4 people get 42% of the rewards.
Summary of Options
In both cases the distribution of curation rewards is heavily biased in both cases towards whales who are actively voting. Going forward there will be more people with larger stakes voting, bots will no longer have a speed advantage over humans, and total curation rewards will be reduced by 50% in favor of increasing content rewards. The result of this initial distribution is a small percent of total steem and will be quickly dwarfed by the steem allocated over the next 3 months. In other words, there is relatively little long term impact in terms of wealth allocation.
In total less than 60 people are meaningfully impacted by the difference between 0.8.3 and 0.8.2. Of those impacted, most have expressed a desire to support the best interest of Steem over any personal profit. We commend the team spirit of everyone involved.
Principles
At stake is the question of principle. Principles have value and are what unite each and everyone one of us under the common banner of Steem. For many people a system that violates their principles is a system that they do not want to be involved in. As a community it is to our benefit to adopt principles that are widely accepted and highly valued in the market.
The principles of keeping promises, following contracts, and respecting property rights are sometimes at odds with the principles of stakeholder voting power, democracy, code is law, and greatest good for the most people.
Even when we have clear principles choices are not always clear when there is an unresolvable contradiction. Regardless of which route the community decides (0.8.3 or 0.8.2) there will be people who feel that promises were broken. On one hand there are the masses of users who believed us when we said everyone could earn something meaningful by voting, and on the other hand there are a few people who studied the fine print of the code and decided to vote accordingly.
What is most important is the perception of everyone outside our community who is trying to decide if they will join. This is especially true of people with a large amount of money they might invest. Dana Edwards recently wrote a quality article on Ideological Security vs Financial Security.
We believe that whenever there is ambiguity, conflicts should be resolved with a bias toward the code.
Steemit, Inc Supports 0.8.3
This has been heavily debated inside Steemit, Inc. We have a desire to see everyone rewarded for their participation, but we also have a desire to respect the code, intent, and documented communication. We would also like to reward those who discovered the “bug” in the curation reward algorithm. The resulting debate has forced us to find solutions that will improve Steem.
The bug in the curation reward algorithm may have allocated about 1% of the Steem market cap in an undesirable manner, but it is just below the proposed threshold of justifying any kind of major retroactive change. The impact of adopting 0.8.2 would be similar to the impact of losing well over 1% of all Steem to a theft or hack. By adopting 0.8.3 we can retain support of a large portion of the cryptocurrency community who might perceive 0.8.2 as theft (even if it technically wasn’t).
Conclusion
We recommend all witnesses upgrade to 0.8.4 which will include an important bug fix, but is otherwise identical to 0.8.3. Witnesses will need to upgrade by July 4th. We also recommend the community work together to refine an official constitution that all Steem users should be asked to sign by vote. This constitution will help us avoid / resolve future conflicts and communicate to the outside world what our community stands for.
For the sake of consensus and so that we can move forward to better things and work towards growing the community, I will upgrade my witness to 0.8.4
I think this is related to the constitution post. You should link to it.
The winner in the end should be Steem future as a whole and not short term gains.
consensus will come one way or the other, as we can not continue without it.
I will support what will keep us going forward. Everyone should.
Good luck with witness consensus on all this, and thanks for all your VERY hard work.
Absolutely. I add my thanks.
I just don't understand....above you show that more people are rewarded with the 0.8.2 algo which doesn't require changing the rules prior to 24th June. Why are you supporting the 0.8.3 algo? Either way the whales win so it can't be about that. If you've debated this heavily....then it can't be clear what the best option is from a moral or steem standpoint. So why not take the option where more people are rewarded, where the rules people were operating against are observed and people trying to contribute honestly (like me) don't get caught in the middle? All i'm asking for is a clear explanation because ultimately, form a certain perspective, i might as well have not contributed half my content, let alone curated to the extent i did.
I have a desire to see the most people get the most benefit. In this case the decision is based on principles not outcomes with an eye toward growing the size of the pie rather than fighting over how to divide today's slice.
The impact of compromising values is to lose many heavily invested individuals. Losing these individuals means losing market cap and ultimately lowering everyone's future rewards dramatically.
Dan, my trust in you, the fact that i'm not alone and that i truly love this platform is the only reason i'm not inconsolable right now. I don't mind sacrifice. I just didn't understand the why. Now i'm starting to....i'll have to be pragmatic along with the others. In my own way, I was trying to defend the integrity of steemit as well as my 'reward.' That's it now. I'm going to give myself a slap and get on with it. There are content creators that need my votes :)
Please read my steem apology
This is actually a very interesting point and not one that has been clearly stated before.
All of the comparisons we've seen between algorithms are comparing SP with SP. But this is not a valid comparison because SP on one fork is not an identical asset to SP on a different fork. As such they don't necessarily have the same market value. Of course, we don't know in advance what those values will be, but ignoring the difference altogether causes the analysis to be incorrect.
Looking toward maximizing the market cap (and, assuming no total supply change, equivalently the value of the SP unit), at least as one consideration, makes a lot of sense.
It isn't really a significantly greater number of people. It is 159 accounts with a non-negligible gain, a significant number of which can reasonably easily be identified as: a) bots, b) people (including the largest known whale) holding more than one account, c) people who even larger losses on a different account. Just because the rest can't be so easily identified as being in one of these categories, doesn't mean a good number of them aren't as well.
I support the idea of wider distribution of rewards, but this just wasn't it (and maybe that will be an issue going forward with the same algorithm too, or maybe not, we will have to see). I hope to organize a pool funded by the largest beneficiaries of the original algorithm to voluntarily spread out some the initial rewards to a much larger number of active early-adopter users. Even if no one else wants to participate I will likely do some of this on my own, but I will contribute more if others are on board too.
Those 159 accounts are, even when you substract the a) b) and c)s, >10% of the active userbase. How would you define significant?
Bots get more with the new algo because they curate more. The only reason they're not getting much with the old algo is their smaller stake in single accounts. The same reason all the minnows lose with the way that's been decided, no matter how hard they worked.
0.8.2 is the full retroactive version. This caused trouble, some of the losing parties even threatened to leave and continually dump the steem markets with their funds. It's probably better to give in to that, than risking the whole project's future for a slightly better distribution.
Thank you for your candor pharesim. Although, I'm totally confused now. I guess i never really understood the curation mechanism or the full implications as it changed.....i just enjoyed voting. As you can see, i'm no whale and risked much on VP. Clearly greater forces have been at work and i just have to accept the situation. I don't hear others agreeing with me, which must mean the others affected are all in agreement.
You're not a whale but your SP is much larger than the bulk of the new users who were recruited to sign up via Facebook, etc. You are also a successful blogger here, and will receive, I suspect, a nice overall reward payout on July 4 along with daily rewards if you continue to contribute and get votes. Overall, the idea of the algorithms (both of them) is to encourage people to do exactly what you are doing which is vote for the good stuff. There are secondary considerations such as encouraging concentration of SP into single accounts rather than breaking it up (because the former means an individual identity with reputation rather than a bunch of suck puppets) but that is not something a typical, non-abusing user with a single account would ever really need to consider. Thank you for your contributions, BTW, I've enjoyed a number of your thoughtful posts and comments.
Thank you smooth