My First Reaction To HardFork 20, "Velocity" - Proposing Mining via Proof of Burn and Proof of Transaction
The next hardfork (software update) will address one of the most annoying shortcomings of Steemit in its current form, namely the account creation bottleneck. That's what the name of the hardfork implies, IMHO.
There is an official announcement about it, containing more details and the complicated math (I'm still working that math, so no update on that until I get it right, which may take a while) but I want to just jot down my first impressions, along with a few suggestions.
Account fee - who's paying for that and with what?
One of the proposals of HF20 is to burn Steem in order to create accounts and ditch the Steem Power delegation approach. I'm supporting this, in theory, and in practice I have this suggestion:
- create a new token, SAT (Steem Account Token, this idea is not mine, @samupaha wrote about it, if I'm not wrong) and peg it to the STEEM currency. The total daily supply of the SAT will be subject to consensus (established by witnesses) but in absolute numbers, not relative numbers. This will allow the creation of more accounts if the value of STEEM goes up, as the account fee will be more likely tied to the US.
Creating accounts via mining
One of the proposals is to have accounts created via mining (in the beginning, STEEM supported that, but it was ditched, as the mining queue was dominated by just a few). I propose to keep the idea of mining, but use a different algorithm, called Proof of Burn. I wrote about this a few times, it's actively used in a token called Slimcoin. How this works: you spend a certain amount of coins, which, in turn, gives you a certain number of hashes that will be used to mine a block.
A short example
Bob wants t create an account on the Steemit website, but he doesn't have any Steem, nor he has the support of someone who wants to create the account for him.
So, he goes to an exchange and buys (with Bitcoin, Ether, etc) a certain amount of SAT (or even on the internal market, I think a basic exchange can be implemented relatively easy). What he buys, though, it's in fact STEEM, but it's converted to SAT. When he has to enter the address, he ticks a box saying: "I want to create an account for this address" and gives the desired account name. Upon verification of the availability of the name in the blockchain, a transaction is made. That transaction will contain:
- the desired name of the account, which is instantly created, but it's inactive.
- the amount of SAT paid
- the hash (transaction id)
After a certain number of blocks, determined by witnesses (see below), the transaction is validated, the SAT burned, and the account made active. The account then receives a certain amount of Steem Power, in order for the user to be able to transact (it may or may not be equal to the SAT paid for the account).
The price of an account creation will be variable and will incur a time maturation period (or the number of blocks after which it becomes active). To have an account active in a week, one will pay the standard fee ($1-$2). To have an account available immediately (or in 20 blocks, which is a minute) one would pay $10,000. The amount paid extra is not returned in the user wallet under the form of SP, only the official creation fee.
I hope it makes sense.
If not, I'm ready to give more answers in the comments.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):
Thanks for the overview of HF20 - I wasn't aware that the discussions about it were already taking place.
The subject of creating new accounts is a very interesting one, I see a couple of issues with the aforementioned propositions, that I would like to mention:
I don't think that is is a good idea. The beauty of Steemit, as Dan has spoken about, is that people don't even need to know about Blockchain, Cryptocurrencies, Witnesses etc. to use it and enjoy it - the barrier to entry is incredibly low for a Blockchain product. We should not raise it
Also, the reason why modern Apps have switched to a "Freemium" model is exactly for the reason that they want to remove barriers to entry - letting users try before they buy / purchase in game expansions.
The other points that I would like to mention are around "how to you scale up the on-boarding processes in a way that is resistant to abuse?"
Presently, it seems like there is a manual process where accounts are vetted before they are created (for the good reason that it costs resources to fund a new account), but this is bad for two reasons
If we add in a mining or token-based approach how to we prevent an attack from someone with a lot of resources or who is spamming the system with requests?
Thanks for sharing, I'll have to check out the post that you linked to.
I don't know where Dan said that, but his articles were certainly not for beginners, lol. The structure works without the need to have too much knowledge, but it's the people with a bit of knowledge who are trying to get advantage by creating multiple accounts to get free STEEM. This is a much bigger problem than it seems. If somebody creates 10,000 accounts and it gets $5 worth of STEEM for each of them and then dumps $50,000 in an exchange, that will drag the price of STEEM down. So it's everybody's concern.
I totally agree. It's definitely not a trivial problem to solve.
A blockchain is different playfield. The fee has to be somewhere, otherwise people will abuse the system.
Steem prevents abuse with rate-limiting how many transactions users can make in a period of time. Other blockchains use transaction fees. For a social media platform, Steem's model is superior because it allows posting and voting for free.
But the fee has to be somewhere, in Steem's case it's in the account creation. When the account is created, it will get some SP which is needed to use the blockchain. So if you want to use freemium model, you have to find a way to raise money for account creation.
Good morning.
What about non-crypto savvy potential users?
Let's suppose that I don't know a thing about Steem, I've only heard about it. I heard great things and I want to join. I also don't have an exchange account and have never bought any crypto...
How can the system enable me to join it easily and without any additional / off site steps?
Hm, another question? Is the fee really necessary? OK, it is a barrier of sorts but ...
Could it be easier to join without the fee and have initial debt? You cover this debt by your activity on the platform. When you are in plus (or have certain amount of plus) only then you are allowed to withdraw ... Eh, mixing different things :)
Just rambling away. I better start working. I have enough on my agenda for today and I shouldn't be hanging here :)
more importantly.... if a fee is introduced, does that mean that existing accunts are grandfathered in? meaning the fee is not imposed on those who were here pre HF20 helping to grow the community? i'd be against any excessive sidesteps to join, it is difficult enough for new users to learn to navigate and learn the system well enough to use it properly.... i've only been here a month and i'm still stumbling around....
@misterd21 the fee is already in place, only it's paid by Steemit. They support it as part of their user acquisition cost.
then either continue to pay as usual, or close the group... It sounds to me that the success of steemit is becomming a little overwhelming for the devs. or it was poorly thought out. I mean as with anything in where there is money involved(gold, dollars, crypto) someone is going to find exploits... they should have anticipated fake user accounts and prepared for such an event... Have you ever thought that a fake account is going to be willing to pay because it is still going to be a net win for them over the long run. all a fee is going to do is get the people who aren't here for the money abandon steemit...and to me, that is the real beauty of steemit...the community...
Some very good points raised thanks for the input!
I think this is a good thought. I, for example, knew almost nothing about crypto when I joined, and I almost certainly would not have joined had it been required for me to buy something on a crypto exchange (even though I really enjoy that now). Is the goal to have as many users as possible on here, or only have ones that have a certain amount of knowledge going in? It seems to me that more users would equal a higher potential value for Steem in the long term, but maybe that isn't the case?
My point exactly!
This thing is called adoption. All crypto media is crying about it, how hard it is for a regular person to adopt bitcoin or steem or ...
Don't make it even harder to join the party :)
If you don't know anything about crypto, then you won't want STEEM, because STEEM is crypto. It's a logical fallacy here. I think it's a good measure to separate the freeloaders from people who really have a say. There's no such thing as a free lunch and there will never be.
Cool :) But what about the Your voice is worth something part?
Does it really have to be crypto in the first place? Or is crypto just a consequence of participation?
Remember, Steemit Inc. want/wish millions of users.
This would give an opportunity to hoard account names for free. We can't allow that, otherwise all the best names will be taken very quickly.
Hm... Market for names as it is for domains?
OK, I withdraw my question why not free :)
Then we need some sort of, for example Blocktrades, integration to make it easy to pay the fee up front while registering.
Yeah, this is what I've been saying for a long time. The Steem ecosystem needs an easy way to buy new accounts, with different cryptocurrencies and also fiat currencies.
Fiat too, exactly. You don't need many of them - USD, EUR, BTC, ETH, ... Which online service supports these and have an API which can be integrated into the frontend?
Hey, steemconnect could have this feature of funding your (future) steem wallet ...
Basically it should be just an ordinary webshop. New users just "buy a product", in this case, a Steem account. They tell what name they want and pay it easily with a credit card or other cryptocurrencies.
A bonus feature: buyers of new accounts could pay more than just the account creation fee. If they paid more, that would be transformed to Steem Power to their new account and they would have immediately more power on the platform.
This would to create organic and constant demand for steem and help the price to go higher, so everybody in the ecosystem would benefit.
It's also psychologically beneficial to make new users to pay for their accounts. When they pay for it, they consider it as a valuable investment, not just something they got for free to play with.
I agree with you :)
Changely widget can act as a payment bridge.
New user can buy more that the creation fee value of Steem.
All it takes now is adding the widget to the registration form and making a campaign for the new users to let them realize why is beneficial for them to join and why is beneficial to invest more than just a fee.
Easy :)
Hey #2 :)
Changelly can do it right away:
You just have to figure out the incoming amount according to the currency chosen and inject the future steem wallet name ...
There sure is an API call to calculate the value before the transaction. And the name part is just to take the value from the name field and inject it into the widget code...
Easy :)
I like your idea of Proof of Burn, really very interesting.
All due respect to your superior understanding of how blockchains work and the things witnesses do to maintain the blockchain, but I take SERIOUS, SERIOUS issue with a couple of the things you suggest - because I think it will be a total disaster for SteemIt with it's continued ability to grow:
Making people wait for a WEEK to sign up?!?! Talk about a TOTAL LACK OF PUBLIC RELATIONS...
$10,000 for an "immediate" account creation?!?! That's just about THE most GREEDY-sounding thing I have ever heard anyone say on SteemIt - EVER.
I had you down as a Witness - as a write in. I love your SteemSupply site. But, after this, I'm going to make sure you are taken off of my list of votes. You might be intelligent, but you are not wise.
I would suggest to read again the HF proposal and my suggestions :))) There is no greed as the money are actually burned, it's not taken by the blockchain or ne. That made me smile :)
And at the moment there is a HUGE problem with people abusing Steem and creating thousands of accounts to get free Steem. Throttling the account creation for the scammers is one goal of the HF20. And the week before the user actually starts using the blockchain could be spent in an omboarfung process, with one tutorial per day.
That way we'll make sure everybody understands how the network works and we don't run into a massive confusion like your post suggest you're in.
Peace!
seems like a better way to curb abuse would be an account verification system that rewards a user if they submit a questionable account. or perhaps make steemit a one person one account tied to their national ID card or drivers license... woud go far in curbing false accounts....
Upvoting for the anti-spam proposal, but I don't like the link between the ID and the account because of it been a privacy problem.
Linking any official identification with an account would be useful for social media platforms like Google+ or Facebook. I would really like it. People would stop saying many fool things there.
But in the context of a free speech platform like Steem, that proposal is not interesting.
There has got to be a happy medium somewhere between waiting for 1 week and paying $10,000 for immediate account creation.
A nominal fee of, say, $10 - or 5 Steem - would chase out the creation of the vast majority of the "free accounts" and spammers. It would also be a great way for people already on the inside to "sponsor" real, actual people into the platform to help ensure the creation of real accounts by real people.
I joined in May and got 10 Steem, immediately. I don't know if that was a promotion from SteemIt, or @marketreport, or what the deal was - but it was a great help. Then, I saw all of these accounts start cashing out their Steem Power. I went on my rant and told them how dumb they were being: https://steemit.com/steemit/@bi5h0p/how-to-get-yourself-unfollowed-on-steemit I have managed to take my 10 Steem and turn it into 50 Steem, so far. Up until 2 months ago, I only used computers for gaming - so I saw no reason not to take my useless waste of time and direct it towards more constructive activities. Even a complete idiot knows you don't cash out your initial investment after making your first $20.
I'm not sure what "burning" $10,000 is, in regard to SteemIt account creation, but if somebody went to the trouble to actually deposit that amount of money for the immediate creation of an account, you did nothing to convince me that it was a wise investment, or that somebody didn't actually pocket that money somewhere else. I mean, who just burns $10,000, besides the Joker?
"Omboarfung process?" I was a Medical Lab. Technician in the Army - and I never had the pleasure of coming across a description of that particular life-form. What is that, again?
Feel free to convince me, again, why I should be voting for you as a Witness? I'm all for what's good for Steem, but I'm still not convinced you know the best way forward.
Spamming account creation is a major concern. No one wants to see inactive accounts and even bots, to me, are extremely annoying. If the goal of Steem is to reward users for creating and curating good content, there has to be something done to curtail this issue and fast.
Since the beggining of being in Steemit I always have been thinking that the platform is giving people free money and that could make more people wanting to create an account here.
People needs Steem Power to interact with other users. And that seems to be the reason of giving free money to them.
I would suggest to just create accounts, waiting for the user to create some real content and, after a time, giving the money to them as it is done already now.
Steem Power is a must especially starting out. That is a reasonable offer for new users to stick with the platform in the short term.
Wow @dragosroua this is certainly a good idea which will add value to steemit. In fact steemit is great because of people like you working behind the scene daily to make the platform a better place for all. Keep up the good work and more success
I like the idea in principle but I would prefer if there wasn't a new token created. Is this really necessary? There are 3 forms of steem as it is.
This is just reality. There will be more and more digital assets (we call them coin now, but they really are assets).
I get it, I just think sometime less is more and if its possible to make the onboarding with less of a learning curve, all the better.
I introduced 5 people to steam, 4 of them created accounts and got approved.. but the current system is ALREADY too complicated for them to understand. Steem isn't just for crypto enthusiasts or content creators, its for people who want to just come on and read!
See the comment above for @ervin-lemark. This is a logical fallacy. If you don't want to get STEEM and you don't want to lear anything about it, then your place is not here. Or are you just in for some quick cash? See the difference?
I think a fee will create major barriers to entry. If you want to keep content on here as Rich and diversified as possible, we need to keep as many people from other countries involved in the participation of this. Once we Institute a fee, I'm pretty sure there would be many people from poorer countries that would not be able to participate.
The fee is already in place, only it's paid by Steemit.
Well steemit is more able to burden that costs than a poor Indian man trying to get his word out to the world. If you pass that cost on to the customer/user, you will alienate a lot of people in the process.
Very useful post. I actually like hearing about a lot of the proposed changes for the next HF. I definitely agree that new user account creation has to be sped up as it will make it easier for new users to get on the platform. I think my only concern is that some new users especially those new to cryptocurrencies might find it hard at first to purchase SAT with BTC, ETH, etc. The process would be faster in general but it might lead to an additional layer of processing that would might be hard for newcomers. I believe we should find a way to make this initial step more friendly for newbies.
Its sounds really hard finding a fair way of creating steem accounts. Having the person thats serious abut steem mining or buying a token first sounds a good way to prevent spam accounts. I have seen on bitcoin talk some browser mining to eliminate the barrier or technical requirements but im not sure if any are real projects.
Proof of Burn is by far the most affordable mining algorithm I know of.