Steem Power is Broken: Greed Will Keep it Broken
My Steemit Rant Continues
Steem Power
Steem Power
Steem Power is an ingenious idea. It's a cryptocurrency who's value is literally based on trust. When you have SP, the community is telling you: "We trust you to distribute rewards pool money fairly." Unfortunately, here at Steemit, you can buy trust. Steemit never even got off the ground before it was centralized around it's investors.
Centralized Around Investors
Before Steemit was a thing, I'm sure this seemed like a good idea.
"Let's set up our investors with boundless rewards so we can continue the project ASAP."
The only problem is The Blockchain and centralization do not mix, at all. Steemit investors have way too much power, and they don't even need it. Look at this graph:
Yeah I'm pretty sure investors are doing just fine without the ability to distribute 99% of the inflation generated by the blockchain. Also, if Steemit acts quickly and decentralizes the blockchain, these numbers are going TO DA MOON!!!1 I'm talking Bitcoin numbers $10,000 per Steem coin. Even $1000 per coin is x250 an investors money at this point.
Oh wait I read the bluepaper, so let's not forget this little gem:
Of the supply of new tokens created by the Steem blockchain every year, 75% of those tokens compose the “rewards pool” which are distributed to content creators and content curators. 15% are distributed to vested token holders, and 10% are distributed to Witnesses, the block producers cooperating inside Steem’s DPoS consensus protocol
15% are distributed to vested token holders
On top of all this bull shit you're also giving investors 15% guaranteed interest? Fuck... You...
Rant Over, So What's the Solution?
I don't mind the 15% interest, it's a little weird that you'd give more to investors than you would to witnesses, but whatever. The real problem here is the fact that only investors of Steemit get to decide where the rewards pool is allocated. This is the root of the rewards pool exploitation problem.
The solution is to power down all accounts to an appropriate level. Put that crypto into the savings accounts where it belongs. A complimentary solution is to use my system of three reputations to better gauge which community members are good at what, and give them power accordingly. Obviously, people with the ability to find good content should be the ones distributing blockchain rewards. This isn't rocket science.
Next up: The value of logarithmic soft caps and why Steemit should use them. If Steemit refuses (or is unable) to power down investor accounts this could also be a way to save the blockchain.
You should read the white paper, vested token holders is everyone with SP, there is no distinction between powered up with bought steem or earned steem.
Centralisation is inevitable. The blockchain will revolutionise society, but only when it becomes mainstream and those who bring it to the mainstream will want to control the rules. Whilst the blockchain itself may remain open source the rules of the popular platforms that popularize it will be regulated and controlled - just like Steemit, but by identifiable (and taxable) bodies.
The problem with anarchists is they cannot agree the rules, but if say facebook were to adopt a Steemit style system the rules would be centralised, profit would be taken, and scalability would be controlled. Business will not use any system that cannot be regulated; government will not permit any large-scale business use of anything that cannot be regulated or taxed.
Centralization is inevitable, but decentralization is also inevitable. There is always going to be a shift from centralized to decentralized by the masses because it's intrinsically a better deal. We haven't really seen this yet because the blockchain is so new and on the fringe.
I think the safest blockchains to support are somewhere in the middle.
I disagree with you, I think the 'masses' will always opt to pay for convenience, regardless of whether decentralisation is a better deal or not. However, the cutting edge will, by its very nature always be in the decentalized zone.
Fair enough.