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RE: Steem as a Digital Currency

in #steem8 years ago

I like all of those things, and for a while I was confused about why Steem seems to have been received so poorly despite all its benefits.

I suspect this is because it's quite centralized. I don't know if anybody has formalized this well yet, but it seems to me that any coin that involves stake-weighted anything absolutely needs to have the stake spread out across a large group of individuals.

Steem has stake-weighted everything, and a huge portion of the total stake is controlled by only a few individuals. Of course I'm familiar with the standard arguments for the security of proof-of-stake (i.e., the biggest stakeholders won't act badly because they're the ones who have the most to lose), but I think that must feel pretty flimsy to many people.

So how does a highly-centralized cryptocurrency defeat the stigma of centralization? A combination of two things:

  1. Stick around for a long time to build trust
  2. Decentralize.

The first just happens over time, and we'll have to wait it out. The second is also happening in Steem, bit by bit. Every time the founders sell more of their stake, Steem inches away from centralization. Every trending blog post by a newbie redistributes a tiny fraction of Steem's market cap away from the whales.