By "witnessing" blocks, Steem witnesses secure the Steem network in much the same way that the miners for most mineable coins do. They ensure only valid blocks are added to the Steem blockchain, preventing unauthorized transactions such as double-spends (the ability to "abuse" the ledger to spend coins more than once.) They are extremely important to the health of the network, and thus, the position is well compensated and difficult to acquire.
The problem I see is that the number of top witnesses who receive full block rewards is arbitrarily set at 20. This was true with 100 active accounts, and remains true today at over 500k.
This means that as the Steem network grows, it will become increasingly centralized. This may work fine today, but imagine all of Bitcoin being run from what is effectively a mere 20 mining systems? You'd only need to bribe 11 people to accomplish a 51% attack against the network and rob it of all value.
This is exactly the situation Steem occupies, perpetually. For Steem, you need bribe a mere 11 witnesses (roughly) to commandeer the value of an $812,862,036 block-chain.
I'm not implying any past, present, or future collusion or other shady behavior - the numbers simply paint an inevitable picture of eventual cooption.
The pithy rewards for back-up witnesses starting at #21 do not, in my opinion, guarantee a line of honest or hard-working candidates as they generally fail to even cover server expenses. Furthermore, since votes are stake-weighted, you may only need to bribe a few large stakeholders to institute any witnesses you like.
We will eventually get exactly the same corruption seen in the above chart, simply by continuing to add users, if we retain a hard limit of 20 full witnesses. The system will get increasingly centralized around 20 individual users, making it one of the more centralized cryptocurrencies available.
There is really no way to logically deny that if Steem continues to add new users, it will see exactly the same problems with population ratios and representation that the dysfunctional, collapsing US system is right now. However, witnesses are unlikely to approve reducing their rewards by adding new full witnesses, nor are Steem's users likely to be eager to reduce the reward pool to make the same accommodation.
I do not have any magic bullet-solutions, but eventually the community will need to make adjustments if the rate of growth continues. The only way I see to increase the reward pool to potentially reward new witnesses is to continually increase the price of Steem, such that the value of each day's reward pool is maximized.
For that, we should add as much transaction value to Steem as possible by having it added on exchanges that allow voting, such as Binance and Cex.io. Any new ways we can add to spend Steem or SBD directly will help in this regard - storefronts, auctions sites, etc. Encourage others to transact or exchange Steem directly for goods whenever possible. I have helped pay for animal rescue vet Bills with Steem, and I have also conducted loans and paybacks via the Steem coin.
Encourage your friends and other users to do the same.
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Seems like a good argument, but with many other issues, not sure it's a priority. Actually maybe changing the way whale voting occurs might be the bigger issue.
Yeah, as I pointed out, this is a large future problem, not a current priority.
"Actually maybe changing the way whale voting occurs might be the bigger issue."
We just changed this entirely in HF19, to the whale's detriment. I wouldn't expect more anytime soon.
We did? Oh great, I think I missed that memo, ty !
We moved from exponential voting (the more Steem you have, the more each Steem is worth in VP) to linear voting (100 SP = 100x 1 SP vote).
Sounds like a good idea to scale it @lexiconical...working on some integration of Steem in our local economy in 2018! Hopefully that will be a great success which inspires others to follow suit! :D
You're one of the most enthusiastic engineers on the "make Steem more valuable" train.
The Steemit community, especially the veterans, should try harder to bring more users onto this platform. I'm fairly new, but coming onto this platform has opened up many new doors for me. I am now a paid crypto writer. The little SBD that I did earn on here I converted to Litecoin and transferred it to my wallet. I learned how to do that just by watching a cool video on this platform.
SHARING IS CARING!
One thing you can't fault Steemit for - there is lots of great Steem-related content, and a plethora of useful how to posts and videos! (It's not really my forte, however)
I am resteeming. Some very enlightening insight.
Much obliged for the resteem!
I hope that the witnesses are not going to accept any bribe. On the other hand scams are everywhere. You underline some very good things here. One of this is for sure adding transaction value to Steem and spend SBD directly.
"I hope that the witnesses are not going to accept any bribe."
Almost every single one of us eventually has their price.
There might be a few proverbial Mother Teresas out there...
Is there a way to implement a system to designate the amount of witnesses proportionally to the amount of users?
Anything we can code, can be added, pending witness approval. This is exactly the solution I would hope for.
@lexiconical- Brilliant analysis. The way you have put it, if it is going to take only 11 witnesses to be enticed for making some drastic changes to steemit blockchain then it is indeed worrysome. I had not realized Steemit is vulnerable to double attacks this way.
Like you have proposed, Steemit witnesses should increase with more number of accounts. Thanks. Upvoted full
Regards,
@vm2904
Unfortunately, despite any potential agreement we may share, it is unlikely that those with the voting power / positions to enforce these changes would voluntarily dilute their own power/stake by doing so.
Hopefully change comes before Steemit hits the "big time".
You have a good point there. I hope it gets figured out soon.
It's unlike that those in influential positions would voluntarily vote to make themselves less influential.
Nice post! Liberty is a fundamental human rights of citizens, but some times denied through the instrumentality of Government. I follow and upvote you.
Username does NOT check out. =)
Thank you @lexiconical for promoting this post together with https://steemit.com/budget/@jerrybanfield/introducing-steem-budget-proposals
nice post @lexiconical
You really ought to put some actual effort into your comments, as this type of comment will only get you ignored or flagged.
This post has received gratitude of 2.86 % from @appreciator thanks to: @lexiconical.
You got a 12.40% upvote from @upmewhale courtesy of @lexiconical!
Great information ... thanks for sharing ...please check my intro post :D
Asking people to check your posts is generally frowned upon, even if it is an intro post. I suggest not doing it.
The best advertisement is a better comment.
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good job thank you @lexiconical
Somehow, I have a feeling that if I tested you on the content of this post, you would not pass.
money is money
Insightful commentary...did you stretch before all this exertion?
You got a 1.99% upvote from @upme requested by: @lexiconical.
Send at least 1.5 SBD to @upme with a post link in the memo field to receive upvote next round.
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Great post bro ^^
You're not going to get very far around here with such cut-rate comments.
Thanks for your information interesting post
Oh really? What did you find most interesting about it?
Agree in avoiding centralisation. Any idea if there needs to be such a cut off between 20, or however many in the top level, and the rest?
Some kind of smoother descending scale of payments, all the way down, could work. It would scale naturally as the Steem price increased.
Any specific cutoff will run into the same problem. What we need is a sliding scale that adjusts to total amount of active users, so that a large enough Witness group is always available to resist coercion.
Yeah I always thought the number for witnesses is way to low. For a big decentralized community, 21 is a peanut number..
It probably made perfect sense when the network was younger/smaller. However, it's a clear point of attack in the future. You only need to buy off about 11 people to attack a $500 million network.
This post has received a 8.57 % upvote from @aksdwi thanks to: @lexiconical.
Hello, great work, i liked your post and reward it with upvote.
I'm running budget proposal campaign on Steemit for funding my future STEEM Windows and Android app - STEEMER. If you would like to contribute, please visit my post for details: https://steemit.com/utopian-io/@cryptomonitor/steemer-your-future-steem-blockchain-transactor-windows-android-app-funding-update-23-12-2017
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7.83% @pushup from @lexiconical
This post has received a 11.25 % upvote, thanks to: @lexiconical.
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Had no idea of this potential problem. Did think that 20 witnesses was a small amount to protect the block chain. Hope they vote in a system like suggested here.
"... a system to designate the amount of witnesses proportionally to the amount of users?...."
Resteeming for a few more views, thanks for having an eye out for our future here.
Good to see you, Potplucker.
I doubt the witnesses will vote to reduce their own power, but we can hope.
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