In the last weeks there were many discussions about the future of Steem and with it a lot of insatisfaction in relation to the democratic process on Steem. This is mainly based on how little influence most users have on the election of the top 20 witnesses since they mostly depend on the votes of a few of the biggest whales.
Besides hanging around on Steem, I am doing a P.h.D in Blockchain Consensus which not only involves the algorithmic side but also analyzing the game theory aspects of consensus in distributed ledgers.
The fault in the System:
Fortunately, in the case of Steem, we can quickly figure out where the problem lies.
Which has been proposed other times already on the chain as well by @ats-witness https://steemit.com/steem/@ats-witness/steem-witnesses-vote-number-and-decay
Why can each user elect 30 witnesses, why not 10? why not 5?
Let's analyze this using a small example:
If you can elect 30 witnesses:
One account with enough stake to elect 1 of the top 20 witnesses also has enough stake to elect ALL the top 30 witnesses!
If you can elect 10 witnesses:
One account with enough stake to elect 1 of the top 20 witnesses only has enough stake to elect half of the top 20 witnesses!
I think the example above pretty clearly shows the entire problem. The more witness votes the top stake holders have, the more influence they have and the more centralized the system is.
Delegated Proof of Stake is already heavily critized for its centralization problem and not enough, one of the main weaknesses of Proof of Stake is the Monopolization problem because the biggest stake holders have an evergrowing influence on the network.
This, combined with giving the top stakeholders so much power in this democratic process is a heavy problems in terms of decentralization.
My Proposal:
Each account can elect only 10 witnesses.
To reduce the problems, I propose a transition period to give people enough time to order their witness votes.
During this period, after the hardfork, every user still has 30 witness votes but is now able to order the votes after their personal priority.
After a certain period is over (at a specific block), the latter 20 witnesses are then discarded.
Users which did not order their list specifically will lose the 20 last witnesses they voted (Based on the Data of selection).
Will it help the Steem price:
To be honest, we don't know, but, I actually think yes.
One of the big reasons Steem is not very interesting for crypto investors is the heavy centralization aspect which could be heavily improved through this process.
But not only that, with this proposal, new investors are also motivated to stake their Steem since they can have now a much bigger influence in the democratic process on the Steem blockchain.
Is it realistic to be accepted:
Now, there are two mayor hurdles in this process:
1: The Top 20 Witnesses
The top 20 witnesses will not be too happy about this because they will be afraid to lose their positions up there in the sun.
2: The Stakeholders
The top stakeholders will also not be much interested in losing their influence in the chain and might want to elect witnesses which are against this proposal.
In the end it all comes down to one question:
What is the best for Steem?
We have a decreasing price, stagnant user numbers, decreasing market cap rank and worse, people on the chain, especially the dolphins and other small users feel left alone by the witnesses and heavily overruled by the big stake holders.
Yeah, witnesses and stakeholders can maximize their position on the chain by maintaining the current course. But, in trade, their investments will lose value and maybe one day being a top 20 witness is not worth it anymore.
Thus, doing what is the right for the chain should, naturally, overrule the egoism to increase the value of their stake and not to increase the stake they have.
I prefer having 10k steem at a price of 1$ than 100k steem at the price of a cent.
And now?
What is necessary now is that the community works together, pressures the witnesses and starts a discussion about this proposal.
@jondoe did a great job pressuring steemit on their last posts to give some feedback to this proposal and from Steemit itself @gerbino pointed out that he was in favor of such a change but that for that a discussion in our community would be necessary
The proposal is definitely not set in stone, and if you come up with better ideas you are invited to join the discussion under this post.
We need a more democratic process, better communication and more transparency of the witnesses and I think a good way to reach this is by simply reducing the number of witnesses each person can vote on.
Images from Pixabay
While we are talking about game theory, why is the obvious counter strategy not to simply split your extremely large stake into two extremely large stakes, doubling the number of witness votes that you can use backed by what is effectively still orders of magnitude more SP than people even a little bit down the curve?
When I was doing visualizations of SP distribution throughout the Steemit user population, the power curve was incredibly steep. Hyper-logarithmic. With the relative ease of setting up new accounts and staking them now, what would keep accounts with large stake from simply splitting into a group of nodes of smaller stake but coordinated voting?
And then we would end up exactly the same place we are now, but everybody's weight of SP would be spread just a little bit thinner.
The problem with systems like this is that they are trying to imagine that things could work differently than they are given very much the same axioms. The problem is not "insufficient democracy." The problem is "Proof of Stake." The entirety of the blockchain and the way that the system allocates resources is based purely and completely on who has the most stake lodged in the database, and not only is it far better (from the perspective of the algorithm and the creators) for you to have acquired that stake by purchasing it with fiat currency and then simply keeping it unmoving in the blockchain, it is the recommended methodology. Publicly!
This is the problem. This is the very core of the problem. It is also this strong selling point of the platform.
"All pigs are equal, but some pigs are more equal than others."
Same answer, No, splitting the stake up won't help at all, then you get twice the quantity of votes with half of the quantity of impact. This way you reduce your influence and not grow it.
If you split up your stake you probably won't be able to elect any top 20 witnesses. So you'll probably elect 20 top 60 witnesses which doesn't help you a lot.
120mv distributed in 10 votes = 120mv each vote.
120mv distributed in 20 votes (if its 10 votes per account) would be 60mv each vote.
But it reduces the slide each of the people get, that's the entire point I'm making.
You might be interested to see this post from Dan Larimer on Medium about decentralization, suggesting some plausible solutions
https://medium.com/@bytemaster/decentralizing-in-spite-of-pareto-principle-eda86bb8228b
Interestingly he has the same opinion as I have in terms of the centralization of all the mentioned solutions. (PoW, PoS and DPoS).
Although the level on which he suggests to fix it is much more complex and long term than what I am trying to achieve with my proposal.
I'm sure the top witnesses are determined by a very few whales, but I think the current system has some merit. What we need is for more people to actually vote as many will not have. The stake of the dolphins and orcas is growing and has some sway.
Have a !BEER
I'm currently doing an analysis of the system, might make a post out of it next week.
One of the main issues really is that many many stakeholders are not voting at all. While many big stakeholders have a huge impact on the election of the top 20, the bigger problem is the possibility of a single stakeholder (steemit inc for example) to overthrow the entire system all at once.
I'm analyzing if removing the voting limit would help, but if people don't vote more it doesn't change anything at all (coverage doesn't seem to improve a lot).
Reducing the system to 10 votes, would allow Steemit to elect 10-15 top witnesses (which is better than 30 but still not satisfying).
I just find there are lots of people I want to support and a lot of them are low on the rankings. I almost want to vote against some of the top witnesses :)
Haha, yeah. But that would reduce the coverage further and make the system more fragile.
Your Proposal is a low budged fix and it could have an effect. I think what people don't get is that the vote is fixed and that splitting combined with a fixed vote makes the split a worse decision even though its the same pool size. It's a social proof and divisibility issue and not really trivial because of the "but its still the same size of the cake" argument.
the problem, in general, is that we deal with complicated issues and people can only like and agree on proposals they understand (even if they are wrong). This is why a DAO needs an unconscious voting. E.g. 90% of Steem-Users leaving is a democratic consensus, but this information wouldn't be reflected in the opinion of the remaining 10%, their opinion/votes would be completely worthless.
Ralph Merkel peer-reviewed by Buterin, Hoskinson and some others wrote a paper about DAOs and how a useful democratic consensus could be implemented. But since Steem organizations are not scientific at all arguing with them is a waste of time.
Hadn't seen your answer at all. Yeah the idea was a small budget fix, especially since there are "more urgent" matters to attend in the mid term. In the long term those things have to be fixed with more scientific and proven solutions though.
I also agree on the DAO issue, but I think it's similar. First of all we get DAO, that's better than not having it, and then we can improve on it.
Parabéns, seu post foi selecionado pelo projeto Brazilian Power, cuja meta é incentivar a criação de mais conteúdo de qualidade, conectando a comunidade brasileira e melhorando as recompensas no Steemit. Obrigado!
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Wow, talk about foreshadowing.
No, splitting the stake up won't help at all, then you get twice the quantity of votes with half of the quantity of impact. This way you reduce your influence and not grow it.
Yes, which in the end turns out 1==1.
If for example Pumpkin would do that, it would help the entire chain since it would be much easier to pass his votes with the votes of enough orcas and dolphins.
If he distributes it into two piles to be able to cast 20 votes, yes, then it did.