Understanding Hive Witnesses, Governance, and DPoS

in LeoFinance8 days ago (edited)


“There are only two industries that call their customers ‘users’: illegal drugs and software.” ~ Edward Tufte

In Douglas Rushkoff's words, digital networks of Web-2 technologies are just the latest media to go from promoting social bonds to destroying them, from fostering humanity to supplanting it. Web-2 gave the elites all the benefits of these technologies and nothing to the masses who use them and also gave the same elites the power to control over masses and make huge profits.

What Hive offers the world is the next evolution of the internet and what I call Web Free. Others call it Web 3.0 or Web-3. The reason I like to call it Web Free is because this new technology frees people from the shackles of corporate greed and gives the control back to people. It empowers them and helps them build real financial equities that they can use them to improve their lifestyle or do whatever else they like to do with them.

For these reasons I do not refer to people of Hive as users, I prefer to call them Hive participants, bees, owners. The reality is, everybody who has an account on Hive with some HP are owners. Owners of their accounts that is. Users don't own their accounts, they are just some name in a centralized database. Their accounts on Web-2 with all of their following and data can be erased with a click of a button with zero regard how they feel about it.

Hive provides true ownership of accounts. There is no entity, or group, or stakeholder that can gain access, remove, or edit anybody's accounts. These accounts come with many features like wallets for financial assets, social interactions data, following, etc. Everything that belongs to the account, belongs to the owner of these accounts. Being an owner on Hive also means, having ownership stake and influence in the network itself.

Since many new participants join this open network at all the time, it is good to talk about the basics of Hive network governance, consensus protocol, and block producers of this blockchain. Let's start with what makes this ownership possible. This kind of true ownership is only possible in truly decentralized system that uses blockchain technology with a consensus algorithm that makes this magic happen. Keep in mind that my knowledge is limited and I might be wrong about certain things. If you find any errors in my statements please share in the comments.

DPoS - Delegated Proof of Stake is the algorithm used to reach consensus and is a built in protocol for the blockchain. This shouldn't be confused with delegated Hive Power. That is not why Hive is DPoS. This happens to be a use of the same terminology for two different purposes.

Some people think rewards distribution is part of governance. I strongly disagree, because rewards distribution has nothing to do with securing the blockchain, accounts/wallets, and funds. Rewards distribution is a different topic and shouldn't be confused with Hive governance. It is not.

Upvotes and downvotes are part of rewards distribution system. They also should not be confused with votes and un-votes used in Hive governance. If you disagree feel free to share your thoughts in the comments. For the purposes of this post, rewards distribution has nothing to do with Hive governance or DPoS.

Blockchain needs block producers. Some chains may call them miners, some call them validators, etc. On Hive block producers are called witnesses. Any account can put forward themselves as a witness candidate and start running witness nodes. There are some guides on how to do that, and also many witnesses are usually very helpful and can direct to the right resources to get started with this process.

Every stakeholder on Hive, doesn't matter how much Hive Power they have, has an ability to vote for these witnesses. We can vote for 30 witnesses. There are no rules who to vote for and why. It is a personal choice. Or we can just don't vote. But the system is set up so that, it is in our best interest to vote for witnesses. Because that is what makes Hive blockchain running. That is what keeps the blockchain and our accounts/wallets secure.

Decentralization doesn't mean democracy. We vote with our stakes. More stakes we have more weight our votes have and more influence we have in electing the top witnesses. When we vote with our stakes for witnesses we are, in essence, delegating these witnesses the task of producing blocks. Our stakes decide who produces how many blocks. Our collective stakes decide who the consensus witnesses are.

In other words, DPoS is a stakes based system that delegates the task of producing or validating blocks. That doesn't mean stakeholders cannot be witnesses. Anybody can. But some stakeholder choose not to. Because being a witness require some technical skills and knowledge. So, it almost like stakeholders hiring experts in this technology to maintain the network, keep it secure, and running. Witnesses get rewarded by the blockchain for their services.

Top 20 witnesses are considered consensus witnesses. Well, it is actually 20+1, one is for a backup witness. There is an order or rotation of producing blocks. Once each of the top 20 witnesses produced a block, the next block is produced by a backup witnesses, someone below top 20 ranks. Since each block is produced every 3 seconds, top 20 witnesses get to produce one block a minute. They get paid for each block produced. You can check the Hive blockchain explorer to see how much and when. I normally use hiveblocks.com to explore the blocks. There might be other options out there.

Backup witnesses - all witnesses ranked 21 and below still produce blocks, but not as many as the top witnesses. Higher you are in the ranks as a backup witness more blocks you would produce. If you are a top 40 witness you would be producing about a block per hour.

Decentralization is not a democracy. One account one vote is not the case here. And one account one vote has so many problems, it wouldn't even work. It has to do with a skin in the game. If something wrong were to happen to the blockchain who would suffer the most financially? Of course those who have invested the most. That's why it is a fair system, more investment means higher influence. Anybody can obtain as much influence they like. It is an open network.

But this is better than democracy. Democracy is slow. With DPoS decentralization actions can be taken fast. There is no election terms for witnesses. They can be voted in to top ranks, and voted out from those ranks just as easily and fast.

At the same times witnesses are not bound with any contract or obligations. They can run any software as they choose. Sometimes there will be slightly updated or patched blockchain software versions that are still compatible with each other to run the blockchain. Witnesses can choose whichever they wont. They can shut down their witness nodes if they like. They have complete freedom to do whatever they like. But if they are doing something that goes against stakeholder interest, they will most likely be unvoted and drop out of the ranks and become irrelevant.

This witnesses and stakeholder relationship makes the magic of DPoS happen and keep everybody honest. Dishonest ones get removed. This keeps our blockchain secure. This keeps our account ownerships intact, our funds safe. All while everybody have complete freedom to take any actions they choose. The end result usually ends up being a win/win for everybody. This is the main part of Hive governance.

Yes, higher stakeholders have higher influence. That doesn't mean smaller stakeholder don't have a say. Every vote counts. Even smaller stakes add up when more small stakeholders take the same actions or vote for the same witnesses. Consider you have 1000 Hive Power. If 1000 Hive owners with 1000 Hive Power voted for a witness, that would be equal to a vote of a whale, 1 million Hive Power worth of a vote.

Moreover, Hive is a social network, where we all regardless of our stakes interact with each other on equal levels, engage in networking. Social networking is a powerful and can influence once opinion. A minnow with some knowledge can influence a whale who wasn't aware of something and affect their governance actions like voting. Doesn't Hive has an awesome governance?

We can also include how Hive Decentralized Fund is used for the governance of Hive. Since these funds don't belong to anybody, distribution of these funds is also done in a similar way we vote for witnesses by stakes. If certain amount of stakeholders like the proposal and it passes the threshold of votes Return Proposal has received, the proposal gets approved and funded. Just like witness votes, these proposals can be un-voted and effectively unfunded anytime. Return Proposal is there to set the level of minimum votes needed for any proposal to get approved. Return Proposal, just like the name suggests returns the funds to the DHF. This level too is decided by the votes of stakeholders.

This is pretty much it about the Hive governance. Now that we understand the Hive governance concepts, let's take a look at what witnesses do and the values presented on https://hiveblocks.com/witnesses mean. Alternatively, you can use https://hive.arcange.eu/witnesses/ by Arcange.

Staked Hive or Hive Power internally in the blockchain has a different name and values. Stakes are called vests. So, all votes are measured in vests. MV stands for megavests, GV stands for gigavests. Blockchain also keeps the record of missed blocks. Missed blocks are when the witnesses node was scheduled to produce a block but wasn't able to do so for various reason. Normally it is not a good thing. But sometimes these missed blocks happen due to not the fault of witnesses.

One of the important roles witnesses play is approving or rejecting hard-fork software candidate. This can be for one or many reasons. Usually a lot of discussions take place on and off chain while these hard-fork changes are being developed and what witnesses feel about them is expressed before hard-forks become available. When final and tested version of hard-fork is ready, witnesses show their approval by running the new software at the scheduled or agreed time. Really skillful witnesses also participate during code testing phase too.

There are also parameters witnesses can configure like price feed, registration fee, bias, APR, block size. For example, let's take a look at the APR. Currently about 14 of the top 20 witnesses have APR at 12%, others have values like 10%, 7%, 15%. Yet we know that HBD is paying 12% APR. So the blockchain uses these parameters. One of the most important parameters is the price feed. Since Hive has HBD, it is important to feed the actual price of the Hive in the market to the blockchain. Blockchain itself has no other way of knowing what the market price of Hive is.

Hive governance is unique and interesting. By participating in governance we make decentralization possible.

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For the parameters the witness set, is the one used by the block chain the average value? I know HBD seems to be like that but I am wondering if the rest of the values have similar ways of being calculated. I did hear that the value of making an account could change in the future before.

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I am not 100% sure. My understanding is it would be the value majority top witnesses set parameters to or the median value. This may also be different for different parameters.

even after reading this post I had a headache for a couple of minutes lol I think I'm going to need a white board to start unveiling the secrets of the Hive system, this post is a huge step forward, still no one can say it's not exciting and ingenious.

I will try to come up with a better way to explain next time. :)

This way was great don't get me wrong!:) it's just that I think Hive can't help but be complex, you have to be very involved in several fronts to know for sure how the whole ecosystem really works.

Wow! I think it will take more time and another reading for me to digest a bigger % of this article content. I don't know, though I find articles of many content creators here on Hive way beyond me, somehow I think this is the reason why I get hooked. Too many things to learn to catch up with what's going in decentralized finance . . . .

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Okay, I've got to admit, a lot of these were quite technical and difficult for me to process as a new hiver, but I think I learnt a little something about witnesses and proposals. Thanks

If you use the PeakD frontend, you can bookmark important posts. That way, you can easily find them again - just click on the flag at the top :)


That's the beauty of hive and web3.there is nothing like you haveing total control of what you have without anyone interference and that's the uniqueness of hive and web3

Awesome post.

But for a newcomer it might be too much info... Maybe you should consider writing about these theme in shorter posts, that way people don't be too overwhelm...

⬆️⬆️⬆️ Baby Bee ⬆️⬆️⬆️

We should try to teach them, not scare them... 😄

Have a great day!

lol yea it was suppose to be a short post. But then it wasn't. Thank you.

Yes! These are the types of things I keep telling people (offline) when they say things like "cryptocurrency is all speculation with no value." I'm like, "Do you even understand Facebook or Twitter and how they make money off of your content? You spend 8 hours a day participating online and own none of it."

Thanks for this article. I'm going to direct these people here as a good starting point from now on.


What if I want to become a witness and I have the resources to get the hive available on the exchanges? ignore the fact that this is going to push the price to the moon. It's really hard to find the perfect system, the human factor will always there to

What is the question again?

Let's say I could buy the whole hive available in the exchanges(and I'm a "bloody-minded" dude ) I could autovote for me as a witness and I would become one of them so, is this system that effective ? Of course it's an insane case but it's possible

Actually the possibility of that happening is very low if the goal is to gain top 20 ranks as witness only with own stakes even if you buy up a lot of them.

First, it is not a bad thing if one has a goal to become a top 20 witness. But it requires skills, knowledge, commitment and networking. Let's say you are super rich and will buy up 10 million HP. This will not be enough to become a top witness. Others will notice this quick and throw in more votes in other witnesses so you never make it there.

However, if you intentions are good and you offer value, it will be welcomed and you can win over the community to have you as one of the top witnesses. It is a good thing. If you have money, you don't even need technical skills, you can hire someone to run your witness.

But as an investor, I doubt your goal would be to become a witness anyway. Investors invest because they believe in their investment and think they can get returns sometime in the future. Any hostile behavior of an investor will just put their money at risk.

If you are talking about this scenario as an attack vector, we don't even have to theorize, there has already been a real attack in the form of steem hostile takeover. I don't know if you are familiar with the story. Justin Sun bought significant amount of stakes not in the exchange but under the table from the founder Ned Scott for very cheap.

Buying anything on the exchange in large amounts will significantly increase the price of the asset so it becomes a very expensive things to do.

Justin Sun was able to convince big exchanges like Huobi and Binance to power up their user assets and vote for Justin's sock puppet witnesses. We are talking about all of the assets in these exchanges. Big stakes here. Even that didn't give full control over the network to Justin. It did for a very short time like an hour or so.

But when community realized the attack, all votes mobilized and pushed back. Within hours control was in a stalemate mode. Justin controlled 10 top witness nodes, and community controlled 10 top witness nodes.

When you have a stalemate like this, nobody has control, no changes can be made to the code, because there is no consensus. This could have lasted in this state for years or even decades. But when community decided to move on and build a new chain (Hive) and exodus started, only then Justin was able to regain full power.

So lesson from this story is, no it is not possible to gain control. Yes, it is possible for you just with one witness node to become a top 20 witness. But that just gives you a seat at the table and not full control. But if you are going to spend tens of millions of dollars to get that, you probably would choose more qualified people to run witness nodes anyway.

This makes the system very effective.

Yeah of course I remember that dark episode, Just wanted to know if this situation could happen again. I dig the point when you say "this is better than democracy".

I dream with a future when we all can run our own "witness" don't get me wrong they are doing it awesome but everybody deserves a piece of fun 😆
Where can I find more information about how to become a witness ? You know , the protocols, the hardware and how all this really works

Maybe start with exploring the gitlab page: https://github.com/openhive-network/hive

I would talk to witnesses like gtg, someguy123, ausbitbank, etc for better information on how to get started with becoming a witness. I haven't tried myself, so don't know much.

that image is exactly how I imagined Witnesses and what goes on behind the scenes :)

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Just a simple question from a noob on Hive. If I get more Hive power, will my Rc recharge at a faster rate?

With more HP you will have more RC. Recharge time would remain same. But since you have more RC you get more recharged and always have enough RC available.

I really wish the proposal system and witness voting was more in users faces as it's two of the most critical parts of the Hive eco system success. Instead it seems tucked away from ever day users.

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Yes, I agree. Question is how you would do it.

I believe in your write up. We are not users. We are owners because we take the responsibility in our account both staking, delegation and curation reward.

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Definitely learnt a lot reading this.

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Hive is a social network, where we all regardless of our stakes interact with each other on equal levels, engage in networking.

In that aspect to me is more than a social network but a big family while being here because you not only earn but learn from other people on the blockchain which is really awesome


DPOS is good and will evolve Imo in the next 10 years massive.

Interesting post.

For these reasons I do not refer to people of Hive as users, I prefer to call them Hive participants, bees, owners.

It is important to note that you are making an interesting analysis with political, marketing, business and other connotations, but it is important not to demonize the technicality of the area. In the context of information technology, the word user refers to an entity that makes use of a system or device. This entity may or may not be human. The user can even be a software that interacts with another by making use of it.

From an etymological point of view the word user is justified. The first meaning of the Oxford dictionary is "a person or thing that makes use of something". For example, you are the user of your computer or your phone, regardless of whether you consider yourself to be 100% owner of them or not. Even software that controls a Hive account automatically is a user. Humans who have Hive accounts are strictly users of the system.

Since this is a matter of interpretation, it's easy to remember that the founders of open source (free software, actually) invoked the idea of "freedom" with some romanticism and political sense, analogous to what you question. Well, they actively included the word "user" in works such as "the freedoms of software" and others, and that does not make it any less free. They would argue that it doesn't matter if you refer to those people as users, but whether those people have the freedom to use, distribute, study, and modify the software they purchased.

Which interpretation of freedom is more important? I say that "freedom" cannot be reduced to the use of a word. It is something that is broadly interpreted and subject to a frame of reference, so the use of a word should not be demonized. I infer that your intention is not to demonize the word, but terminology is an important part of discourse, which in turn has a strong social impact, especially when it comes from influencers. We would not want others to look down on those who use the word user in their posts.

I still have to comment more on your interesting post, but right now I have to work :)

Thanks for sharing this useful insight.
I share your vision that us, Hive users, are all active participants into the Hive ecosystem and therefore we are all responsible for the best Hive development possible.

Furthermore, I am willing to become a Witness too to become even more active into this fabulous ecosystem.

The reality is, everybody who has an account on Hive with some HP are owners.

Obviously, And one more thing that hive has a strong and beautiful community and it is home for everyone. We are the owners here, slowly people will understand the web 2 issues and they leave them and join web3 platforms. Hive is one of the best option for them. Great analysis.

I can’t pretend I understand everything now, but I understand hive a little more now, Thank you very much

I have been in hive for a year and this blog has just shown me what others are doing here apart from blogging and playing games but I see it needs skilled people to do this and to be able to get things but running, I like it! and maybe one day I will join this governance but let me get myself set up for this task.

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So much happening and a lot to process but I am glad the information is available for any user to take a look at. I learned so much but a post this technical (for me) will require some more read throughs, Thank you so much for sharing.

Why does it needed to be technically skilled to be a witness? Is it that hard to run a node? How different it is than running a miner?

Tip sent bcoz you're a good Twitter promoter. Keep doing a good job!

Cheers our beloved @geekgirl

Very informational. I enjoyed reading.

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