Let's look at #Bitcoin and how it's distributed. Bitcoin is distributed via miners with open access. Anyone can mine bitcoins, and thus an ICO or launchpad was unneeded to spread bitcoin far and wide.
- The by-product of securing the blockchain is energy consumption + more coins.
#Ethereum started as ICO + POW; this was their token distribution model. The ICO first serves as an initial launch pad to get the tokens out of the creator's hands into the hands of the free market. Starting as POW also served to distribution ETH into even more people's wallets. Now ETH is going to PoS (to scale/negate energy consumption costs) in which people lock up tokens to secure the network to get more tokens. POS distribution model is horrible IMO. There is zero incentive to distribute new coins because the more coins you hodl, the more you get. Once POS, the main distribution of new coin will go to those who want to buy ETH to use for their blockchain projects. POS is more scalable than POW in terms of node costs (TPS is debatable depending on PoW blocksize) its distribution model is among the worst. While, not the best distribution model, since ETH has already been disturbed far and wide, they can maybe achieve a decentralized token distribution. However, unlike with DPOS (Steem's consensus model), token distribution isn't nearly as crucial to the functioning of the ecosystem because there is no stake-based voting.
- The by-product of securing the blockchain is more coins that go to the coin hodlers.
Steem incentives distribution of tokens staked based upvotes that provide monetary value, which incentives humans to create content.
- A by-product of securing the blockchain (Steem) is new content + new coins.
With #DPOS token distribution becomes paramount, because tokens have voting rights for witnesses that run the blockchain. DPOS you have voted in block producers, on Steem they are called witnesses. There isn't a set amount; it can be changed with 2/3rds approval from BPs, right now it is set to 20 + 1 that rotates with backup witnesses (Steem).
The reason for curation on Steem IMO is token distribution. Without curation, Steem would be in the hands of a few people and never would have been distributed far and wide. A DPOS system with poor token distribution might as well be a centralized database. Sure, you get many benefits of blockchain, but the trust element goes out of the window.
Why do you log onto the internet? I log on for news, music, videos, articles and talking with friends. Everything boils down to expression, creation, and work of others. Curation empowers creation.
The entire distribution model of Steem was meant to distribute the upvotes far and wide to the content of all kinds. That is why it is called an upvote.
If you remove curation rewards what you are left with is a "shotgun DPOS" model which is basically a lazy PoS with voting rights.
Shotgun DPOS = Instead of passive token creation, you must manually upvote ten times a day (vote selling/delegation to bidbots are maxing ROI in STEEM in current setup)
Now, if you want to remove curation, you would need to remove the upvote IMO because it becomes an obstacle. Just call it what it is, remove author rewards and curation all together and have the inflation go to interest paid to SP stake hodlers. Make the staking rewards liquid so you can donate to content creators you want. It is the same thing, forcing people to upvote with low curation rewards is just a janky system. The flaw here is it turns into a weird POS system, where only hodlers get paid just for hodling, BPs get paid, and that's it, so the token distribution turns to absolute shit. DPOS with poor token distribution becomes sour over time.
I like curation because I believe Steem is for distribution and SMTs to provide economic value to creators.
Steems inflation is split between too many people, whereas an SMT can be split solely between curator and author without need to have any go-to witnesses. Also, the SMT has no fear of being spread too think because it is website specific.
7-day voting window. Fine for distribution.
Steem = Distribution of base layer. (very important)
SMT = bulk of future author rewards where creators can have evergreen content.
SMT on top of Steem; Steem becomes a backbone for resource credits for SMTs to operate on top.
Steem = app specific blockchain.
SMT = website specific.
SMTs offers the power of honing where you get all the perks like evergreen content.
If you can redo it all and start from scratch, would you:
If not mining, ICO, POS or curation, what would your token distribution look like if you were creating a token?
Also, what do you think is the best byproduct of token distribution that's now listed below?
Bitcoin = More coins + Energy wasted.
POS = More coins.
DPOS (Steem) = More coins, Content, Effort + Creativity.
▶️ DTube
▶️ IPFS
I think the best we can do with distribution is to get back half of what’s given out under a minimum amount of work, curation. I’d argue that it’s the only other mode of distribution. Any other setup would collapse into a mode that doesn’t promote distribution.
Assuming that 6-degrees of connection (from the study of six degrees of separation) is enough to reach the depths of any social network, the end of the line would be receiving 50%x50%x50%x50%x50%x50%= 1.5625% from the top player. A simplistic view without social mobility and all that, but just this consideration is already pretty good if contrasted with the distribution that happens anywhere else. But of course, Steem ain’t there yet with the current misaligned economy.
Looking at it from the 6-degrees view is interesting, haven't seen that before.
yup, kinda interesting from an online social network + currency point of view!
This is an interesting approach to explaining the byproducts of coin creation and what sets Steem apart from others. To extend this, I would like to share an idea. Something that Steem lacks and SMT can help with.
Consume Token Economy.
What Steem eco-system lacks is rewarding content consumption, time spent on consuming content, playing games, watching videos, etc. So, it would nice to have an SMT that is solely focused rewarding on content consumption. No posting, no commenting, no voting, no resteeming; only consuming content.
The majority usually are content consumers, rather than content creators. Since platform mainly rewards content creation, content consumers tend to become content creators. I understand there are curation rewards. But these rewards require stakes. Majority of content consumers, especially new users will have low stakes, hence curation rewards won't do any good for them.
A solution in my mind is to come up with a system or an SMT experiment of implementing rewards for content consumption. It would require some genius programming skills, networking skills to implement that. But I think it is doable.
For the sake of this thought process let's call it a CONSUME token. Following is how it would work:
Initially, CONSUME tokens will be issued/airdropped to all Steem holders. It will have an inflation the same as Steem. So as new Steem is created and added to the Steem reward pool, Consume tokens will be created and added to the Consume reward pool.
Users who are passive and are not consuming content(defined by its algo and protocol) will lose CONSUME tokens as time goes by. Sort of an individual deflation. These tokens will be added to the Consume reward pool.
Consume tokens will be distributed to users based on the users' content consumption levels. So users who actively consume content will automatically be earning Consumes.
Content creators can promote their content with Consume tokens. They send their Consumes to @consume account and they will be distributed only to users who consumed their content.
Apps & UIs can also use Consume tokens to attract users to use their platform. For example, Busy, Steempeak and even Steemit can send Consumes to @consume-ui on a daily basis. These Consumes will only be distributed to users who consumed content on their platform. Even gaming, video, livestream, and other entertainment apps can take advantage of this and reward their users.
I have more thoughts on the implementations and benefits of this kind of Consume economy. These were just outlines.
I love this idea! Very out of the box, and most folks aren't the best at creating content. By definition, only the best creators are. However, even the best creators need audience for their excellent skills to have value, and most people can consume most content. Some of us, of course, are better at that too. I would probably make a fortune due to my obsessive reading of Steem posts.
A question occurs to me regarding consumption. Presently we note there are no few commenters that indicate little or no familiarity with the OP they comment on. 'Nice post!' and commercial spam comments are notorious, and their frequency occasions no little ire. What would indicate that content had actually been consumed? Clearly simply making a comment would not do this, and absent some other metric would produce an imperial shit ton of comment bots - something none of us wants (I hope).
Thanks!
Thank you!
This will not require any interactive actions like voting, commenting, or reateeming.
It would only count what the users viewed and how much time spent on a post, video, or playing games. To my understanding any Apps can gather that information. So the algorithm used will need to be implemented by the Apps.
Participating Apps in return will be awarded certain amount of Consume tokens so they can use them to attract more users to use their Apps.
Challenge is how to implement it on a blockchain level without requirng a hard fork, but keeping it functioning on top of Steem.
Well, I submit that the real challenge is to actually detect consumption. Botting began in games, back in the '90s, and many games yet have problems with this. @drugwars has recently banned many accounts for exactly that. Simple scripts can point computers at content, and no one would be the wiser without some means of differentiating those scripts from actual eyeballs.
Until you solve this problem, all you can do is enable bots to be profitable posing as people, and most dApps will be well aware of this. They won't want to pay for bogus views.
This is a great idea. It reminds me of what Brave is doing. I 100% believe our future generations will get paid to read articles, watch videos and ads. A person writes a good article and gets zero eyes; it is worthless in terms of monetary value. A shit post that gets 10k retweets can get ad money for both the author and curators. The consumer is the most important person, just like in a store the customer is the most important.
Really enjoyed listening to you Dan
Distribution is key and we want STEEM in the hand of many. (More people to have skin in the game)
Our Blockchain is one or two Tweaks away from becoming the next BNB
And we need more long term players
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Could you not?
Thanks in advance.
Think that curation is critical to the entire system and it's why we put so much effort into just that.
But if we are starting over and doing things right there are some things that would be changed for sure.
How distribution started off was flawed from day one. Way to many coins were distributed early on which leaves the reward pool much smaller now and in the future. A more balanced inflation system would have made more sense IMO.
Due to the way coins were distributed early on we have to large of a percentage of the coins in the hands of the few and this isn't conductive to stability in price long term. Manipulation is ripe when a few large accounts can cause massive price swings without even putting a large dent in their holdings.
The creators and those on the team should always disclose what accounts they own and all outside holdings. I come from a financial background and the shady backroom nature of how things are done in the crypto world keeps me from investing to much. I invest a ton of time and have put in thousands (bought at the wrong time, and even sold a car for steem) but would invest thousands more if I truly felt like I had an understanding of who really controls the liquid steem and the power accounts.
There is more then just these things, but feel like it will turn into a post vs a comment. But lets just say this if the programmers could stop trying to appear smart and remember KISS we would have a much easier time attracting the masses.
The token distribution on Steem was flawed but not fatal. One of the best things that ever happened to STeem was the bear market. Most of the early adopters sold most of their stake, and the ones that still have it must have a long term view for the platform.
I will venture out to say no token distribution can be anywhere close to perfect. Look at bitcoin; early people got to mine BTC with 50 BTC block rewards on a laptop, now you need asic farms to get a fraction of that.
EOS did a 1-year ICO and still had collusion and whale issues. There isn't an ideal token distribution that I can think about.
With that said, Steem has the best token distribution as of now, with the curation aspect.
Yet. The vast majority of Steem remains in relatively few wallets. The distribution is gradually, almost imperceptibly, improving, but I expect the majority of the reason that Steem hasn't increased in value relative to the larger crypto market is distribution. It remains true that very few stakeholders acting in concert could essentially destroy the value of Steem overnight.
There are multiple mechanisms by which this could happen, and not merely the most obvious of just dumping Steem. This nuke hangs over our heads today, and will until the distribution is no longer so concentrated and the power of Steem so centralized thereby.
The Bear market without question helped correct the distribution. It has allowed a ton of great content producers to increase their holdings while vote selling whales that had no interest in anything other then their own greed sold off. Total Win-Win.
Agree that it can't ever be perfect, but it could have been better. If I start a blockchain of my own this will be a case study I use for sure.
There has to be enough of a reason to attract early adaptors, but not so much as to hinder the future of the coin.
IMO Steem has a ton of potential and I've sold multiple other coins at huge losses to increase my personal holdings. When I came into this market I dabbled in way to many coins and wish I had only bought steem and a few others which I knew were solid. Each of my "gambles" were what I suspected and total shit coins making promises that they had no intention of keeping. Lesson learned on those.
I agree that the distribution could have been better, but Steem lucked out by building this fantastic community that I believe can overcome the initial distribution woes.
The community can overcome a lot of shortfalls as has been shown. Without the community of committed steemians this would have fall apart long ago.
The value of the steem blockchain is only so much, in Steems case the reason I feel it's undervalued is the community that is behind the project.
Heh, we need to get you an intro that you can play right after you say "Let's talk about it." Got anything in mind? I might be able to whip something up for you! ;)
Every intro was made for me then I grew out of them lol.
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Listening to your thought process was a real education in Blockchain. In regards to the question I feel a little out of my depth but I'll put across an opinion.
I'm obviously biased toward steem and dpos as my biggest investment in this crypto space is time/content, and I'd say half the total value of my portfolio is in steem.
You hit on something that I think is unique with steem, which is that something we recognise from outside the crypto world (content) is produced through the economic process. It is for this one reason that I'm still convinced steem - or let's be realistic possibly another crypto content platform - will lead the drive toward mass adoption. Also, there is the energy consumption question, but I'll leave that one for now.
The only other scenario I can envisage for driving mass adoption of cryptocurrency, is if some previously unseen Blockchain usage is discovered, which offers that mass appeal utility.
Obvs transfer of value (currency) is the main use case of crypto. But, seeing the recent IMF blog about how they want to eliminate cash to allow for easier manipulation of negative interest makes me wonder if they're not going to create there own (centralised) Blockchain ASAP.
Unfortunately, I think that would eliminate the chance of a truly decentralised global currency as the sheeple would just use IMFcoin. But with content creation crypto platforms (like steem) creating a clear incentive for the masses to engage with the crypto economy, even the IMF couldn't herd people believing they only have one centralised choice.
Ha ha, but I've kinda strayed off topic a little. This is all hypothetical.
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Really. Stop.
I generally don’t get too in depth when thinking about the different blockchain and steem until someone like you start discussing it.
I do like the community/artistic/activism/social part of the rewards system for what it is becoming, and how open it is to evolve. Evolution is one of the fascinating concepts for me with steem and the eth-like platform for fuelling more tokens while always having a value itself is pretty special.
When curating, I barely even consider the rewards there. It is a way of both networking and supporting the people I choose to support.
So, I will resist getting into the semantics and force myself to evaluate the overall business virtues from the perspective of the regular person. Mainly because I believe the launch from early adoption to early majority will hold the most opportunity and upside.
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Great post Dan. I also believe that SMTs will first be website specific as every Dapp owners wants to launch his own coin now. But eventually, I believe that the we'll see the real power of SMTs through independent currencies that every website can use.
The reason is that social media platforms maybe need their special SMT, but most Dapps (gambling, gaming) can just use any token. So the best currency will win for those dapps.
Hello Dan, your videos and writings are something to reckon with!
Thanks for this comprehensive analysis.
Straight to your question:
For me, DPOS (Steem) = More coins, Content, Effort + Creativity remains the best!
I have my reasons; in my country, we hardly see constant power (electricity) therefore if it’s all about Bitcoin, then I shouldn’t be found in crypto space.
Steem procedures are friendly to all!!
Yes! We call you Dan.
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My issue with steem is the current powerdown model is broken.
Shortening it to 13 weeks made sense, but allowing people to vote with all of it while on powerdown is a problem. Basically it allows you to maximize liquidity by having 1/13 of your SP available on a weekly basis. Combine it with bidbots and the system is as broken or more than POS. It's also got a serious learning curve to figure this out which is off putting.
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I was thinking maybe a burn model where you burn a small % of your steem if you want to withdraw it early. Burns helps increase the price of Steem.
I have thought of a similar idea. The more % you burn the faster you recieve it.
Also trickling it back is the problem in my opinion because it allows people to maintain a semi liquidity state with more benefit than not doing a powerdown. Maybe I'll call it gel steem. You can make around 1 steem a week / 100 sp with agressive sp activity, 1steem / 500sp curating, but 10 steem / 100 steem bidding. The imbalance is very large.
If we use your other idea of increasing curation to 33% or 50% it will also fix the issue.
So maybe incorporating both ideas while also having less activity possible on powerdowns may do it.
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This has already been addressed in HF20. The moment you initiate a power-down you can't vote with that amount.
What do you mean by can't vote?
Does this mean 1/13 of my sp i powerdown is gone or all of it?
I just tested about an hour ago with a 4550 sp powerdown (350steem /week). Steemworld took 1/13 of my powering down away and has 5730-700-350 or around 4680sp.
Steemit and partiko are both showing 5030sp and not considering it.
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If you have 13,000 SP and you initiate a power down (13 weeks) a 1000 SP will be 'removed' from your voting power instantly.
In other words, you can only vote with the power of 12,000SP from the moment you started the power down.
After 7 days that 1000SP will become 1000 STEEM (liquid).
Thanks. So it seems steemworld is correct, but steemit and partiko are either incorrect or slow at noticing.
Depending on what one plans to do with their liquid steem in a week, it seems fair.
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No problem! I hope you consider Steem less broken now :)
Every app displays my SP a little different btw I have noticed. Some discount the SP I delegated some don't.
I guess it depends on where they are finding the info from and their specific programming.
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Talking about byproduct problems forsecure my blockchain, I unsuccessfully here, because I only mine bitcoin from the steemit application. Not many coins that I can produce because my SP is still too low plus I don't have much relationship in Steem. maybe if I have a lot of capital I will buy ETH, EOS and TRX. I am interested in the coin. I think the coin-coin is suitable for securing the main coin, bitcoin.
i hope real SMts are comming this year :) So Steem ( coin) has a real usefull usecase.
Depending upon the main use case we can derive the Byproduct but use of the block chain is always beneficial for sure
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If as of now we can speak about STEEM the thing which is base of blockchain is consumption of STEEM as it is the best social platfrom ever. But it is just a matter of time i think so it will be filled slowly and steady by people. 👍
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@theycallmedan, Effective Distribution Of Tokens will empower individuals and communities and inturn it will boost the trust aspect and the whole world is connected to trust aspect in one or otherway, direct or indirect way. You've said true point, on Steem if curation was not there then definitely it will remained as Centralised system. Let's experience the days of empowerment. Stay blessed.
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DPOS Is the way to go... I agree with the 50/50 ordeal. We need to test it out in my opinion 😎
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thank u
the explanation is very complete. Thank you for helping us to better understand the world of bitcoin
I think the byproduct of securing the blockchain should be more STEEM POWER. And the ability not to sell STEEM.
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I disagree. Remove curation rewards and you preclude curation as a mechanism to reduce incentive to reward quality content creators, because curation rewards add incentive for vote selling and rent seeking delegations rather than actual curation - which is to selectively reward that content the voter finds of greatest value. Curation rewards directly oppose that stated purpose by instead creating incentive to sell votes, delegate, self-vote, circle jerk, and the like, none of which are actually curative. The content most financially rewarding becomes that rewarded with upvotes, and this has no relationship to any other qualitative assessment of the content.
Elimination of curation rewards does not eliminate curation, nor author rewards, only a mechanism for reducing distribution/rent seeking. Curation rewards are additive to author rewards in rent seeking self-voting, circle jerks and botvoting, and add incentive to do those things, rather than to actually curate content. I do not note that the vast majority of the Steem community upvotes in order to receive curation rewards (because with limited SP curation rewards are inconsequential, and cannot be made consequential), but for other reasons, such as they simply like the content and want to create incentive for the creator to continue creating it. Those that primarily upvote for curation rewards demonstrably have little or no interest in curation per se, but nothing more beneficial to the community than rent seeking.
I do not see any value whatsoever in that to either the Steem community or society as a whole. Indeed, the reverse is true - I see that as harmful to the Steem community and society in general. Therefore I advocate elimination of curation rewards because they directly create a reverse incentive to actually curate, and instead add to the incentive to seek rent.
I believe that reducing author rewards towards a mean would be beneficial for various reasons as well. Substantial stakeholders are able to self vote and delegate to bots as a means of seeking rent in the present system, and limiting rewards would dramatically reduce incentive to do that, while not financially impacting the vast majority of content creators, so not reducing the incentive to produce quality content.
A better incentive for substantial stakeholders would be availed by enabling delegation to the Steem Alliance foundation to fund development profitably (whatever form that eventually takes. Designing appropriate incentive for such delegation depends on the form that foundation takes, but generally enabling delegations to participate in business proceeds from dApps, or capital gains from improving Steem development is the general idea). Anything that creates incentive to produce capital gains, rather than enabling rent extraction, would not only improve the quality of content on Steem as well as distribution of Steem, but also the quality of substantial stakeholders. IMHO we are plagued with dilletantes to investing, who grasp little beyond profiteering. More experienced investors would be very likely to better fund development well targeted to improving and growing the market for Steem, which, of course, is what all of us here want.
Appropriate algorithms can be employed to increase or reduce rewards delivered by upvotes depending on the total upvote value, with an eye towards providing total author rewards approaching a mean. There is no need for unlimited author rewards, nor is there any reason to advocate that content should receive paltry rewards, except for plagiarism and spam. Even trolls put in effort and (IMHO) are generally entertaining, and thus add value to Steem, our community, and society in general. Something like the 3% minimum and 300% maximum of mean income Huey Long (before he was assassinated. Don't kill me!) proposed would be achievable algorithmically, and greatly improve incentives to create quality content without creating incentives to self vote, circle jerk, or seek rent through vote bots.
Thanks!