Why whales are needed - and a proposal to insure the massive success of steemit, ie Subtractive Upvoting Gradient
Amid all the complaints about unfair rewards, etc. I wanted to explain why I think the fact that we have whales is a big reason why steemit has become so successful so quickly.
First, let me state that I am not any whale and all the STEEM I have was paid for with BTC and earned from my "taker" bot which is one of the few market maker bots that dont do wash trades. I have gotten a mega post and a decent reward post, but most of my posts get a few dollars.
There are some fundamental forces that ensure that there will always be whales, ie entropy, pareto, etc. So love them or hate them, we need to get used to them and since there seems to be enough of the latter, I will focus on the former.
Why should we love the whales? The answer is that whales create a focus and without a focus everything will be blurry. What I mean is that if we imagine a steem without whales, or even dolphins, what would it be like? Everybody's upvote would be the same. That sounds fair, but as an initial condition it has quite the undesired effect of fizzling out. What sort of headline would be "makeup blog post gets $7.77" while I like the 777 number, it wont get much buzz going. Sure, the sustainable average reward per post might well be in the $7.77 range, maybe $77.7 but there cant be an average of $777, not if there will be tens of thousands of posts per day. That is the macroeconomic reality.
Steem could very easily double its userbase each year for 10 years and sustain the current market price of STEEM, if not have it go up multiples as the userbase grows exponentially, but at some point it will reach a steady state equilibrium and the average amount per post will stabilize. Where that is, nobody knows yet.
So back to the whales. Why is it OK for a single upvote be worth $100 while most newbie upvotes are a penny or less? The reason is the chaos that is certain if all newbies had the same voting power before they adopt a common set of guidelines on how to upvote, downvote, etc. In fact, it is unlikely that any large number of people can ever agree on anything.
So, during the "big bang" period of steemit we need a non-homogeneous universe composed of whale upvotes, which act as attractors for additional posts. From that the raw energy will congregate around these whale attractors and condense into galaxies of content that revolved around the original whale attractor.
Doesnt that mean the current whales essentially won the lottery. Yes.
However, if your only complaint was "why wasnt I one of the whales", well the answer is that you werent in the right place at the right time with the right set of skills. It happens, that's life.
Now, moving forward as long as the whale's power flows to the dolphins and that flows to the minnows and there is a way for newcomers to climb the ladder with hard work, then steemit will succeed. However, if the whales create a closed circle among themselves and only upvote for each other, this will not lead to a galaxy of content.
So, I have a proposal. Adjust the upvoting reward to discourage whale for whale upvoting. I am sure @theoretical can come up with some clever algorithm that will reduce the power of a whale for whale upvoting. That will then motivate the whales to upvote for non-whales, ie dolphins and minnows and that will lead to a new generation of whales out of the current dolphins and new dolphins from the current minnows. Something like: Make the effective SP (SP of voter - SP of poster), with a minnow minimum so the whales can feel what it is like to be a minnow just by upvoting for a bigger whale. But notice that the whale's upvote using the difference in SP has most of the desired effect! In fact, it will bias whales to vote for the minnow over the dolphin, for the dolphin over small whales and why use up any power voting for bigger whales.
Even though the effective SP for the upvote is a reduced value, it should have the same effect as now as far as the dilution goes, so there is a cost for whale upvoting whale. This then ensures a steady flow of the whale upvotes to smaller and all the way down the chain, as a dolphin is now incentivized to upvote a minnow over another dolphin. Once there is an incentivized way that through continuous effort and interacting with the community a minnow can become a dolphin can become a whale, then steemit will have no obstacles to growing to millions of users.
Very insightful, the lottery aspect of posts payout may play an important role in Steemit's success. It's so much more motivating to know that a few hundred thousand bucks will be distributed today by chunks of 10k, 1k and 100 to the handful of most popular posts, and that everyone else will get smaller "consolation prize" payouts of a few cents to a few dozen bucks. This keeps the dream alive that someday one could be the one who wins the jackpot. And I think the relatively mundane content of top earning posts also helps sending the message that really anyone could strike gold.
Definitely the lotto behavior is very important, not only because it parallel's standard PoW mining, but as you say normal people see posts which anybody can make in 5 minutes make enough to pay rent (or living expenses for a year!) then they will at least try it.
THAT is the biggest hurdle, so if only we can retain the people that try it, then exponential subscriber growth is very likely.
My analysis is that the envy factor is the biggest obstacle, so anything that doesnt break the overall steemit but reduces the envy factor is helpful. And by making it clear the whale's are here to help the dolphins and the dolphins to help the minnows, it changes from an haves vs have-nots, to everybody is in the same boat and so highlighting success stories of minnow to dolphin to whale will be quite important.
And the best way to get the impression that steemit is about promoting minnows into dolphins into whales is to setup the math to be biased to do that.
So far, I have been quite impressed with the responsiveness of steemit to constructive criticisms. I have been harping on the unfairness and well, brokenness of the liquidity rewards. So of course as soon as I get a bot that is able to get 2% of the rewards, it is suspended :)
But it is all for the improving of steemit, and that is what we all need to work toward. Steemit will have to ignored the obvious things that need to be done to NOT become bigger than bitcoin. I view my job to identify and continue to highlight these obvious things that to an outsider coming into steemit like myself is easy to see, while people here since the beginning it is natural to get used to "the way things are" and not be so keen to change what made them lots of money.
Well, I made a similar proposal 2 months ago!
https://steemit.com/steem/@liondani/lottery-rewards-every-24-hours-for-10-lucky-curators
Sybil.
Well certainly if the big whales go out of their way to make sybil accounts just so they can upvote for it, at least it is more work for them to do. And since they already have a lot of SP, is it really worth for them to do this?
What percentage of the whales do you estimate would make sybil accounts just so they can upvote for themselves? Even if we cant prevent it, we can at least stigmatize it
It's not even whales who would benefit from Sybil. Anyone could attack the platform that way.
I still dont understand how using a subtractive effective SP makes it rate limiting...
It only reduces the power for upvoting someone with a lot of SP, even if the subtractive factor is sqrt(SP author) it biases upvoting to the smaller SP authors.
There can be a million sybil accounts, but what does that gain? The whales have to vote for them and if a whale is voting for newbie accounts that he controls, this will be noticed wouldnt it? especially if the content is weak. So then he needs to hire writers to create useful content, in which case it creates useful content
Maybe I wasnt clear that this was just to reduce upvote power and not to increase it, so whatever attack you say it has, the existing system can be attacked the same way with more power
i must need more coffee. could you explain where the attack is?
Anyone could mine and / or create accounts for relatively cheap. Even at the current difficulty levels now, you can mine 10 names a day (if not more) for a month at only 60 USD. That's 300 names for 60 USD. Now, do that with 15 servers (less than a grand) and you have 4500 names.
Then, it's relatively simple to write scripts to upvote content and you have sybil. Once you have a limiting rate effect of SP, you invite this type of attack.
In addition, it adds additional strain on network.
Id expect most of the current whales got to be whales by mining, and my (admittedly poor) understanding is that you need many miners to be able to run mining all the time, because your miners can't mine while theyre in line to have their pow accepted by a witness.
Even then we would be more "attractive" to the outside world when they see that power is not centralized to a couple of whales but spread to more accounts (I mean at least marketing wise it would be better)
this graph is not yet so much encouraging... I hope the numbers will change and give as a more decentralized feeling in the near future...
https://steemd.com/distribution
Ideally each category would have approx the same stake. It seems my proposal is not liked by a couple of whales who have downvoted this post :(
I am sure that the percentages will equalize. Maybe the .14% will become the 1%. We can only pray.
@jl777 make this paragraph bold using 2 asterisk (*) before and 2 asterisk next to the sentence !
https://guides.github.com/features/mastering-markdown/
It would be nice if the downvoters would at least make a comment as to why they downvoted.
whales are good! The whales become whales by sound voting is even better... here are my thoughts on how to do it.
Every one ,including whales can start with 10% of their current Steem Power as Curation Power.
@cryptodrive makes a good argument for delegating voting power to a degree that would offset this issue in a bit more of a controlled way instead of waiting for the power to 'trickle down'. Worth a read...
https://steemit.com/money/@thecryptodrive/steemit-whales-stockpile-sp-government-spending-analogy-and-the-solution-revealed#@thecryptodrive/re-fleetinuance-re-thecryptodrive-steemit-whales-stockpile-sp-government-spending-analogy-and-the-solution-revealed-20160721t223758597z
I still like my idea of curation power to be earned by good curation.
To not hurt the whales we can start with 10% of the Steem Power of each account as Curation Power.
I think that's a great idea. Not sure how the whales will like it.
most all the whales want what is best for the long term and my proposal will lead to a much better outcome than whatever short term gains they can get by self-upvoting within the whalepod
The more the whales giveaway, the more they will end up with. @berniesanders understands this and he is already creating a strange and wonderful galaxy around his "crazy" upvotings
I was thinking about another idea, give an upvote bonus to new comers or people who never won much and decrease that bonus for people who have already good earnings. In a way it's more or less the same.
some sort of pool that gets posts with the minimum amount of positive feedback at least a "minimum wage" level payout, yes this sort of thing. But the primary source of upvote revenues are the whales, so by preventing whale for whale upvoting, it would force them to upvote for non-whales.
"Everybody's upvote would be the same. That sounds fair, but as an initial condition it has quite the undesired effect of fizzling out."
Plus voting can be sybil-attacked with fake voting / fake ids... so money-backed voting has already solved that issue.
test
you can actually do that? vote on your own comment and earn? how did you do it? amazing
I upvoted, but I don't see the issue you are describing playing out that often. The whales upvote what they like. There are times when another whale post something other whales like.
Creating a rule preventing someone (a whale) from voting how they wish is not something I can get behind. If it is a real issue that actually exist and actually causes a problem, I think the whales here at Steem will handle that manually themselves just fine.
From what I've seen here, especially on Slack, the whales discuss issues like this and a solution is agreed upon and then it just happens naturally without some hardcoded rule being put into place. I think the same thing will happen in this instance without forcing people to vote a certain way.
Even though it isnt happening, the rumors are spreading that steemit is a whale on whale upvote-fest. Also, the fact that slack has been closed to new members for weeks does not help the closed circle impression that really does exist outside the steemit community. I am sorry to bring the bad news that steemit isnt 100% perfect, but the first step to solving a problem is to admit that it exists.
Obviously you can't always rationally explain rumors but where is the evidence of this? I don't even see most whales posting at all, much less posting and getting undeserved votes from other whales. I do post comments pretty often and it is exceedingly rare they ever get votes from other whales.
there is no evidence of this at all, in fact I think a bigger issue is that most whales are relatively inactive, which is an issue that can hopefully be solved too.
The fact that there is no evidence against it is probably not good enough. Maybe if evidence to prove it isnt happening was made, that could help, but given the envy factor I think anything short of a proactive charity type of policy encoded in the algorithms, outsiders will just make stuff up to convince themselves steemit cant be real.
If you just go to places outside of steemit island you will hear people see the envy factor expressed as "unfair payouts" is the primary (only?) negative.
Okay I agree that rumors can be a real issue even if untrue. The rumor of whale-on-whale upvoting just surprises me since there isn't even grain of truth to it as far as I can tell. Most rumors start with something.
some preliminary stats have some interesting data, but I need some info on key block heights, will PM
If it isnt an issue in reality, then what is the downside for doing it? It will have tremendous positive PR effects.
Also whales are not prevented from upvoting anyone, the system would just reduce the power. This is already being done based on how many minutes from the initial post, how many others have upvoted, so its not like we are not already tweaking the voting power
There is a real issue of envy. Maybe as a whale you prefer not to see this, but yet it is there. Ask the people who started and then stopped posting on steemit. I imagine the majority will say the unfair payouts. [Yes, I know steemit still pays out more than any other blogging site, but people are strange sometimes]
So, if steemit can say that the entire system is biased so the upvoting flows downstream, this will go a long way toward reducing the envy factor
Of course whales are essential to the model. They bring in the the massive injection of long term funding that Steemit needs to operate.