Why a Steem Power reward cap would be as controversial as the block size cap in Bitcoin [FAIRNESS vs FREEDOM?]
Why a Steem Power reward cap would be as controversial as the block size cap in Bitcoin
@craig-grant initiated an interesting discussion when he said that there ought to be a cap on Steem Dollar rewards. He set the cap at $500 per blog post. This blog post is a proper response to his, and also to initiate a wider discussion on this topic. I will outline my concerns in my post, and open up a discussion.
My list of concerns with blog post reward caps
- It acts as a salary cap for bloggers. Just as with the salary cap for sports, or for anything else, this salary cap skews the market.
- It breaks the functioning of Steemit as a Social Computer.
- It empowers the dollar over Steem Power.
- It gives an unfair advantage to high net worth individuals who can now buy as much reputation (Steem Power) as they want, while everyone else is capped.
- It will divide the Steemit community as much as the Bitcoin block size cap divides the Bitcoin community.
What is the true value of the Steemit community?
The value of Steemit is in the people who participate with it. So it is about the value of the social network behind the technology. This is a very valuable social network which is why posts can pay out so much, and why the market cap is currently high, but it is reputation which is the big picture, and in this case Steem Power is our reputation currency.
So in my opinion the worth of the person does come into play. That could be the social worth, as in who the person knows and their social reach. That could be any particular kind of wealth they bring to Steemit, whether it be beauty, intelligence, or something else. Steemit has wealth from we who engage with it, and only by giving large rewards to great people can we expect to retain them. These rewards shouldn't to be measured in Dollars but in Steem Power because Steem Power is our reputation currency while Dollars are only useful to people who have bills to pay (and I admit I do have bills but that's not to say everyone cares about that).
Steemit as I see it is about community, and is a social network, while the blog posts are about the value of the content of the blog, but at the same time there is reputation involved where a blog post by a particular high valued person within the community will get higher payouts. If Elon Musk for example were to post here, he might get a very high payout even though he clearly doesn't need the money. The same with Dan Larimer who routinely gets high payouts on reputation alone.
This doesn't mean their content isn't highly valuable, but more that the community values them as a whole person because the community knows them well. So I would say a lot more goes into the value of a blog post than just the value of the text, but also consider that Steem Power is reputation. In my opinion, it doesn't matter whether the dollar values are attached to the posts, but it does matter what the individual is doing for the Steemit community or is trying to do for it.
In order to reward long term commitment to the community, I think we have to prioritize reputation and Steem Power. I think for example @dollarvigilante gets such high payouts because of who he is, who he knows, and his established fanbase, and I think it's perfectly rational to reward someone like him higher than most bloggers.
I originally thought, why not reward individuals who have higher Q scores? I'm not saying to disregard content, but there are thought leaders, celebrities, VIPs, or just people who have been involved in the crypto community for a long time, and as a result, Steem Power flows to these people. I guess you would call these people top bloggers, and this may be the case, but to be a top blogger takes years of blogging, and it's not like they just came on Steemit from no where and get $10,000 or $20,000 posts.
I don't think you can separate "value of the person" from "value of the post" when reputation is what we are talking about and Steem Power gives a person more power if they are a top poster. Basically whales have a certain status, and Steem Power is the currency of status, and I think the trick is to make it more fun for people to compete for that status (gamification), but I don't see a way where you can cap in any direction without unintended consequences.
The rich yet uninvolved investor example
For example if I don't know anyone in this community, never post, never care about crypto, Steemit, don't share any values except profit motive, but I work for a big company, and my company pays me a very high salary which most people might see as dramatically unfair (way more unfair than these $20,000 posts), then I of course would be free to use my acquired dollars no matter how I acquired them, to buy unfathomable amounts of Steem Power, and there is no cap on me when I want to buy reputation.
So I would be able to buy without limits? But people who actually care about Steemit but who have nothing but time, cannot ever compete with my ability to simply buy whale status? I think that is the source of the problem. At least as it is now, while it might not be fair, it's equally unfair to everyone. The random rich person buying Steem Power will never know if some random poster could get a $50,000 post, multiple times, and become their equal. In a Steemit where there is a $500 cap, it will become just like the block size cap on Bitcoin and people who are filthy rich will have unfair advantages over people who have to earn whale power on Steemit. I'm not convinced the cap will be easy to raise once you set that kind of precedent, and I think corporations might love such a cap because it means bloggers can't really acquire Steem Power at the same rate when you consider there is also a frequent post cap.
Steemit as a Social Computer
In order for Steemit to function as a social computer, it has to compute something. Steemit currently can compute the value of a blog post in relation to the market cap of the Steemit community. This is an incredibly interesting experiment because for the first time ever, people who have been blogging for years, can finally see what their blog posts are really worth to the community. This ability for the blogger to see the truth in terms of worth of his or her posts is lost if there is an artificial cap in terms of some socially meaningless dollar value.
Why empower the dollar?
I understand people need to earn dollars to pay bills. I'm one of the people who has bills to pay. At the same time there is no real way to determine the true value of a dollar. I don't know what a dollar is worth because it's worth something different to different people. The only way I can know what it's worth is in relation to other dollars which also really have nothing more than subjective worth, but what the dollar does is allow us to pay our taxes, pay our bills, and sustain ourselves.
But what is the dollar in relation to Steem Power? It's not reputation. A person with a high net worth in banking should not be able to simply leverage that to buy as much Steem Power as they like while those who have to earn it with time must compete for it and on top of that deal with both a "reward cap" and a post frequency cap. In this way there is now a maximum amount that any blogger can get in terms of Steem Power no matter how good their posts, no matter how hard they work. This approach in my opinion of having the cap would have short term benefits in exchange for long term pain.
The Steemit community ultimately is going to divide
It seems the Steemit community is ultimately going to divide, so the question is how would we like to see it divide? As the community gets big there will be a clash between people who think there should be a reward cap and people who don't. In fact, there are also people who are saying Steemit should have a minimum reward akin to a minimum wage such as what Trevon says in this video:
My opinions and thoughts
I think @craig and @trevonjb mean well and want to create a Steemit which is perceived as fair. Unfortunately I think due to game theory and other reasons, there is no way to make one part of Steemit fair without adversely effecting other parts of Steemit. In addition, I notice the people who are trying to make Steemit fair are focused very much on the dollar payouts instead of the Steem Power flow. The flow of Steem Power to top bloggers in my opinion is necessary if the whales are powering down, and if the power is distributed to everyone equally then it becomes a lot less fun for people who play to win.
In my opinion, the key to Steemit success is gamification. The idea is to make the pursuit of Steem Power a fun process. The casino element is controversial but it does add an element of unpredictability and fun for some players. Seeing Steemit as a game is another dividing point because not everyone sees Steemit in that way. So I propose people try looking at Steemit as a "Social Computation Game" and mutual aid society. If it's a Social Computation Game then it has to actually compute something, which means putting some kind of cap on the output would make the results completely meaningless even if it would spread the money a bit more. It would be like having a cap on prices or on salaries in sports, and then with that you can never have the super star athlete.
There is indication that you can run a sports organization with the salary caps. There is also the model used by the UFC which is a very top down model where fighters don't have much room to negotiate their salary yet fighters get retirement benefits in exchange. The thing about sports is that you don't have a very long career in sports, and you make as much as you can while you are in your prime because you are an independent contractor, there is no retirement fund to take care of you when you get old, and in a way bloggers face the same realities.
Bloggers as athletes
If we like we can think of bloggers like we think of athletes. There is a very low chance of making it into the NBA and everyone knows this, but people try their best because of the chance to get rich. People also lose their money just as quickly because the time in the sun is very brief. In social media or blogging it's even more brief than in sports and a person can literally have one year in the spotlight and never be heard from again. It's literally 15 minutes of fame for some people.
A cap puts a limit to this and even if a post goes viral it's limited to $500? It might be perceived as fair to some, and in some short term view it might diversify the content a little bit, at the same time it will create a long term divide, and cause long term controversies, and there are many problems which would only become apparent when you have hundreds of millions to millions of bloggers but which aren't currently apparent now.
My list of solutions
- Raise appeal of Steem Power through gamification. Steemit has to be fun just like WoW is fun, and people must buy Steem Power in pursuit of fun not just profit.
- Rather than a reward cap, instead a reward shift. Shift the percentage toward Steem Power and away from Steem Dollars if the reward becomes above $500. In this way the person still get much more Steem Power and a lot less Steem Dollars but the Steem Power flow will remain in favor of bloggers.
Additional notes: A popular complaint is that the top payout or trending blogs now are mostly people talking about Steem, or crypto, or anarchism, and this to me is no different from a month ago when people complained that Steemit was rewarding travel bloggers and the highest post was a make up tutorial. People are going to always complain about whomever is popular at the time, and when Steemit trending was rewarding mainstream people, there were just as much complaints as today. In my opinion, it's not possible to make everyone happy all the time, and when posting anywhere else a person has no expectation to make profit, yet because the dollars are in everyone's face UI, it encourages people to think about the dollar more than anything else. This may be solved with improvements to the UI, and these improvements to the UI can also help people find similar posts from the same author or other posts voted up by the same group of voters.
References
- https://www.weusecoins.com/why-blocksize-limit-keeps-bitcoin-free-decentralized/
- http://www.boxinginsider.com/headlines/floyd-mayweather-manny-pacquiao-purse-exceeds-nfl-team-salary-cap/
- https://en.wikipedia.org/wiki/Salary_cap
- http://www.bloodyelbow.com/2016/6/23/12011036/white-defends-ufc-pay-fighters-make-a-lot-of-money-were-on-par-with
Good analysis. A few of us recently also looked into capping curation rewards however found it has weaknesses that allow whales to game the rewards. We haven't recently looked as deep into capping the total blog post rewards. If a large group of steemers see a net benefit but it also seems to be a divisive issue, then it could be proposed to move to the new system for only a short period of time (e.g. 2 weeks) as a trial period.
2 weeks trial of capping total post rewards is well worth a try. Whales would have to spread their rewards out over a greater number of posts. Perhaps implement the cap as being effective after a blogger has already received rewards over $500 for 2 posts, this way every blogger has a chance to score big at least 2 times.
@craig-grant, @ned - this idea is worth looking into. At a bare minimum it will force a spread of rewards to other deserving posts, even if it's just a small effect. That effect will ripple because the handful more that are helped by this will be motivated to continue on and do their best to spread it to others.
Too much power in too few hands right now. That's the hierarchy of government and major corporations. Not a look we want.
The chain supports per-post-cap already, but that option is not shown in current UI so far.
It might support it but when would it be justified to interfere to that degree in the market? Some kind of black swam event or because of some vague perception like fairness? Fairness is subjective enough that it could open Pandora's box to guide development into directions which cost freedom in favor of fairness and that is what I am a bit concerned about.
For people who see Steemit as a tool which promotes freedom, either from censorship or financial freedom, then having this sort of cap would possibly put their dreams to sleep. It's sort of like the American dream sells the United States economy, and in Steem the dream is to get from minnow to whale, to get a lot of Steem Power, not from buying it but from blogging, and people compete in their own ways to try to be the top blogger, and this is good as long as it's fun.
But the problem I see is not enough gamification. I think @ned would be able to benefit Steem more from hiring an expert on gamification to improve the economics in a way that make Steemit sticky and fun, so people want to buy or earn Steem Power for the unique privileges it provides. If we make it harder to earn it would be like dramatically raising difficulty for miners, but then if Steem is really cheap then people who earned their money outside the community, can simply buy ownership while this cap is in place.
The issue with the cap is we already have a situation where post frequency is capped, where payouts are capped at 30 days, and now there is discussion of what could be interpreted as a salary cap? Top bloggers will feel punished for being successful which is not a good psychological element for something which you want to be fun. The perceived fairness gain is great but it's measured in dollars not Steem Power which is the issue, as bloggers who might not even care what Steem is might post just to get easier to earn Steem Dollars.
I do see short term benefit of perceived fairness, but I see long term costs which outweigh it. If someone can find a way to implement it without the long term costs I could change my mind and I offered a solution which I thought was a good compromise, which is less payout in Steem Dollars and more payout in Steem Power, but same reward size.
Please please don't. I'm worried if you set this precedent it could be as bad as changing the Bitcoin block reward arbitrarily or like the max block size, or like the DAO fork. It's going to create the Steemit equivalent to a "class war" which at this early stage is unnecessary for only a perceived "fairness" which isn't truly going to be fair long term.
And honestly I'd probably benefit financially from such a cap because I consistently produce high quality content, but I am more worried about creating demand for Steem Power and keeping Steem fun than focusing on making Steem seem totally fair in terms of dollar value. The best idea I saw was to allow a voluntary shift in percentage from Steem Dollars to Steem Power so we get the benefit of perceived fairness without hurting the Steem Power aspect.
I vote against the trial because I think it would not be worth the negative psychological and political consequences. At the same time if you and other developers are determined to do a trial, then at least produce some statistics so we can learn what we gained from it if anything is gained, but in my opinion the costs long term would far outweigh the short term gains because it would reveal just how much power developers have to do a sort of price control that culturally I don't think the current community could tolerate.
Of course I could be wrong but I would see the divide would be between people who want freedom and people who want fairness. It might be that it's a balance between the two. I also see a divide between people who want more gamification (focus on fun) and people who want to focus on making Steemit a more serious platform. As you know what sides I'm on in this debate, I'm just being fair to say there are a lot of people who would take the opposite sides.
If I am being honest. I would hate to see this tried first. I would genuinely love to see the power contributors (Whales, I just don't like the word) try to work with people who are genuinely willing to curate. I say it that way because I understand it is completely unreasonable to expect everything read by a handful. If that was tried for two weeks first as an experiment, it could change the incentive that requires the solution.
In that two week period perhaps a discussion and solution on what could be done to promote visibility of all material. More than anything it's the incentive:
change the incentive, change the behavior.
Very, very important point. Reputation is far more valuable than content, especially right now where it's this early. If steemit attracts big names who consistently vote (not just anarchists and voluntarists mind you), the spread of rewards will be far more "fair" in that it will be over a diverse array of subjects. That will help this debate a great deal.
I think if there was a statistic that showed how many "top bloggers" are curating blogs by others, it would show very few even bother. Curation rewards do not earn good money. I have figured out the best way to earn with curating is to upvote myself 90% of the time and baaaarley upvote anyone else, to maintain a high level of voting power and highest paying vote.
Although blake's point is valid, he also has $30 000 worth of STEEM, and does well on his posts regularly. craig, your thoughts and feelings on this matter are bang on! In the past I had argued for STEEMPower to dissipate over time, if the holder is not 'properly active' - posting & curating .. the lost power would be added to STEEM interest paid out to all members. If on top of that there was a cap on the amount earned on each post, and the number of effective votes raised up, then we could see a very healthly level of diffusion of STEEM Power.
If the little-people are supposed to just step aside for SUPERSTAR BLOGGERS, and forget any chance of gaining anything for their efforts here, then ... who should give a fuck about this place!?
More over reliance on "meaningless" dollar values. That dollar value is completely meaningless! How much Steem Power does he have? @craig-grant has almost 25,000 Steem Power and I have just over 28,000, and these are the only numbers that matter in Steem Universe.
Those dollar values are only estimates and are virtually worthless because we probably will never see those amounts realized. Whatever the true amount is will be based on how much demand we create for Steem Power by making the Steem Social Media Computation Game a fun game to play. If it's enough fun, people will power up.
So it's time to expand the privileges for powered up accounts!
I see your point about tweeking of the steem power up and down mechanics to make it more fun and interesting, more like a game to play rather than a rigid system of money.
Capping rewards may actually make it more fun to play for the majority which is actually more important to giving "meaning" to those "meaningless" dollar values.
It is worth experimenting with and iterating on. There is more at stake here than simple ideology.
If it doesn't work then the system can revert to the old reward system.
Why merely speculate on the outcome when we can test it and gather genuine experimental data?
Testing the hypothesis is the smarter way to do it.
@thecryptofiend Only temporarily, like austerity measures, or quantitative easing, its short term cheap money which comes at a long term cost. It's in my opinion not worth the long term cost.
For example, that precdent of having a $500 cap, could become a $50 cap when there is 700,000 people instead of 70,000 people, and could become a $5 cap at 7 million people, and do you now see the problem?
It will become impossible to earn Steem Power at a reasonable rate because there are too many caps on success. I know, a lot of people are into socialist ideas, but we also have to be honest that these ideas are not fun, particularly when you consider Steem could end up having competitors who don't decide to cap, and where do you think the top bloggers will go?
I don't support the cap because long term it's a bad idea. Short term it might allow me to get more Steem Dollars but less Steem Power? But what is the point if I don't know how to measure my own success? If the highest I can get is $500 then I would not have anything higher to strive for and would get bored.
And in terms of Steem Power, if I feel I can't ever become a whale or work my way up, even though I'm an early adopter? I would also get bored. The point is yes you can make a game easier, but you don't make it more fun by making the game boring for the people who are winning without breaking the rules.
You want to keep the current winners happy while expanding the ways to play and win the game. We can't all be skilled bloggers. Why not open new opportunities for people who want to earn Steem Dollars and let bloggers focus on being good bloggers?
And I know people say it's 'just a trial' but so was a lot of changes in governments or in other blockchains, where they make some controversial change just to try it out but then it gets harder and harder to remove the change as more people join. Something like this is easy to implement and remove at 70,000 people, but at 200,000+ people it's a different story. And let's not forget, there is the 24 hour curation cap, a post frequency limit, a 30 day limit, I mean there is only so much you can do to help people earn Steem Dollars from blogging before you say maybe it's time to let people earn Steem Dollars or and Steem Power doing something else.
Because @ned supports this idea I now expect them to try it out. I think it's a terrible idea but I now at least have notice that it's going to be a trial. If they try it they should at least collect and share statistics, because during this trial Steem Power flow is gong to change dramatically.
I wrote a proposal the other day about voluntary self-capping... The principle is that the lower the self-cap you aimed for, the higher the multiplier of the reward you'd get: https://steemit.com/steemit/@alexgr/thoughts-about-capping-rewards-in-an-incentivized-way
Im waiting for the first high frequency author bots that have an army of info grabbing replicator web spiders creating content as a hive mind, whilst an army of worker bots curate and upvote at such a rate that within 1 minute posts will have 50000 upvotes and the post is worth a million$...oh wait its started :)
After the first 15 posts on the trending page, the $500 cap is in effect
I think if rewards were to change then shifting it toward Steem Power is definitely where I'm voting.
I'd like to point out that before Steemit, we were not relying on the rewards to pay the bills. So, to feel entitled or expect rewards to pay the bills...in my opinion shouldn't be our focus.
Summary by @tldr:
It gives an unfair advantage to high net worth individuals who can now buy as much reputation (Steem Power) as they want, while everyone else is capped.
Steemit has wealth from we who engage with it, and only by giving large rewards to great people can we expect to retain them.
In order to reward long term commitment to the community, I think we have to prioritze reputation and Steem Power.
I think for example @dollarvigilante gets such high payouts because of who he is, who he knows, and his established fanbase, and I think it's perfectly rational to reward someone like him higher than most bloggers.
The rich yet involved investor example For example if I don't know anyone in this community, never post, never care about crypto, Steemit, don't share any values except profit motive, but I work for a big company, and my company pays me a very high salary which most people might see as dramatically unfair (way more unfair than these $20,000 posts), then I of course would be free to use my acquired dollars no matter how I acquired them, to buy unfathomable amounts of Steem Power, and there is no cap on me when I want to buy reputation.
But people who actually care about Steemit but who have nothing but time, cannot ever compete with my ability to simply buy whale status?
In addition, I notice the people who are trying to make Steemit fair are focused very much on the dollar payouts instead of the Steem Power flow.
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The success of steemit depends more on investors who buy steem power than bloggers who earn it
Try thinking about it like this and we are on the same page:
The success of Steemit depends more on "players" who power up their avatars with Steem Power.
Distinction is made between "investors" and "players". Players are gamers who interact with Steemit because it's fun and who don't care if it ROI as long as it's fun to play with. This is the same mentality we see from players of Diablo, World of Warcraft, and it guides people to want to upgrade their Second Life accounts by buying land, or upgrade their MMO experience by buying in game properties for sake of in game status.
The point is, the game world is seen as a virtual world which is more fun and better than the "real" world. The investors on the other hand bring in all the legal consequences, all the adulting, all the real worldness that people go to social media to escape from. So if you're talking about millennials looking to have fun, they might pay unlimited amounts of money because most of the people buying apps are gamers. Investors do buy but are cheap and in the current stock market environment and with the current lack of embrace of these technologies, it might not be wise to sell it as an investment rather than as a game with power ups.
anybody who spends money on steem power is an investor, bloggers who earn steem power are not investors, they do not add $$$ value to the system, so their earnings should be limited, this also encourages them to invest if they love the platform
I must say, I'm surprised to hear somebody like you complain about steemit ... do you think you got too much maybe? you could just send it to somebody else, you know ... I really don't understand why you would want to change the essence of steemit ... it served you well, didn't it?
and think about this; what about all those people that get their stories upvoted, not because it's so well written, but because it's a heartbreaking story ... those stories basically serve as charities ... should that be capped as well?
If you invest your time then you invested in the community itself. That does add value in the form of the content. But I do see your point about fiat value which has to come from somewhere but the issue is it's hard to get fiat in.
I think if Steem was as easy to upgrade as Steam there would be plenty of people upgrading Steem Power.
You are a creative bot at least. :)
Good job reasoning through tangible reasons for not changing how things are done pertaining to this issue.
On contrary, I did offer some acceptable changes. The ability to change the percentage ratio between Steem Dollars vs Steem Power in the payout to the author. The point is the ultimate payout reward size remains the same but merely shift the balance toward Steem Power when the reward size is beyond a set threshold.
This is to have the same effect as the Steem Dollar cap, but without actually taking away the long term upside incentive in Steem Power.
The specific issue to which I was referring was the rigid $500 cap. I think that it's great that anyone can offer potentially beneficial suggestions on how to improve steemit, and just happen to disagree with this specific proposal by @craig-grant, though I am pleased that he has used his freedom to share his thoughts.
Your proposed solution is, in my opinion, a better idea.
Sorry for the misunderstanding and thank you for giving me the opportunity to clarify. - @papa-pepper
I would be totally against post value capping, for many of the reasons you mention. I'm not sure if this is actually viable or not, but as a minnow who is still trying to break through the challenge of low visibility and therefore low numbers of valuable upvotes, one tweak I would propose is to allocate a certain amount of the Steem being produced to be a kind of base pay for content posted. It would not be huge, but it would be guaranteed. So you know going in that if you post something here, you will get some kind of small reward. Then if your post is popular with the whales, you get the additional rewards, kind of like a commission, and that's where the real wealth potential is.
Having proposed this, I am aware that implementation would come with lots of challenges around keeping fraud and plain junk down to a minimum. I have some ideas for addressing this, but that would make for a much longer comment.
Ultimately no system is going to be perfect or please everyone, so you really have to pick your system and stick with it, maybe tweaking it a little here and a little there. People will adapt and make the most of just about any type of reward arrangement provided it's consistent. Under the current system, people (myself included) are largely trying to boost their potential profitability by networking and gaining followers who will at least see their content in their feeds. Most of my current followers are probably also minnows, but that is OK, because today's minnows will be tomorrow's whales, so it's money in the bank.
I like the idea of making Steemit more fun by gamification. You could potentially reserve some Steem Power rewards for people who successfully complete "missions" that would also serve to educate them about your vision for Steemit.
I think there's a lot of potential here, and a lot of creativity. In making tweaks to improve things, please keep in mind that what we have now is already amazing.
good thoughts