STEEM WHITEPAPER For Dummies: Reward Distribution Plus Comics

in #steem8 years ago (edited)

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I've been on Steemit for 7 months and yesterday was the first time I read the Steem Whitepaper.

Why did I wait so long?

It's 44 pages long.

I read a lot but 44 pages of ultra dry material seemed like a huge time investment. I opened the Steem Whitepaper many times, maybe 5 or more times, but I closed the .pdf files after seeing the 44 pages length.

The Steem Whitepaper For Dummies series is my 2017 Roadmap contribution to help newbies understand and want to stay in the Steem ecosystem. I will attempt to explain the Steem Whitepaper in the most basic, easy-to-understand way, in small digestible bits. Each post will contain only one topic.

Our first topic is the Payout Distribution.

It's the most controversial and most difficult aspect of our shared experiences here. Well, it's only controversial if you happen to among the vast majority of users who don't see big payouts on your posts. It's the cause of anger, joy, disappointment, depression, quitting, retention, rage, euphoria, flagging, and every emotion in between. Very few people are not affected by it. But they do exist, and they are strange and wonderful beings.

Let's look at a passage from the Steem Whitepaper about the Payout Distribution:

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The actual distribution will depend upon the voting patterns of users, but we suspect that the vast majority of the rewards will be distributed to the most popular content...

The impact of this voting and payout distribution is to offer large bounties for good content while still rewarding smaller players for their long-tail contribution. The economic effect of this is similar to a lottery where people over-estimate their probability of getting votes and thus do more work than the expected value of their reward and thereby maximize the total amount of work performed in service of the community. The fact that everyone “wins something” plays on the same psychology that casinos use to keep people gambling. In other words, small rewards help reinforce the idea that it is
possible to earn bigger rewards. -Steem Whitepaper

Zipf's law is mentioned in here. I will get to that in a different post because it requires its own space for digestion.

A few sentences jumped out at me:

"Vast majority of the rewards will be distributed to the most popular content."
"Large bounties for good content"
"The fact that everyone "wins something" plays on the same psychology that casinos use to keep people gambling."

Wait! Did the Whitepaper just say that the payout distribution is using the same psychology as a casino?

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[The usage of a casino metaphor is not literal. Steemit is not an actual casino (calm down Steemitophiles). Art uses metaphors to describe subjective feelings on the part of humans. It's a language like that of dreams, and it reflects a subjective experience. Art is the opposite of hard data for it relies on human impressions to form its existence.]

That would explain why I keep observing users describe symptoms of "Steem Gloom", "I'm thinking of quitting" and "I need to take a Steemit vacation". These are classic symptoms of addiction. But Steemit has so far only addicted certain kinds of people.

Here's what appeared to my imagination when I thought about Steemit as a casino and many of us are sitting at the bar, having Steem drinks, getting drunk, hungover or excited, or somewhere in the various stages of gambling addiction:

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Our Steem bar is represented by the keyboard and dice

Some have found their purpose in Steemit and others have been ostracized. Some have become optimistic outsiders while others have embraced the system in a cult-like frenzy. A few are besides themselves with exuberance while others are like ghosts with empty glasses, about to silently and depressingly quit Steemit without a farewell party.

The big Steem Power holders are really the only ones who are able to give sizable payouts to bloggers.

This was done in order to protect the system from abuse. The thinking is, those who have invested more time/money into the community, should exert a greater influence on the direction of the rewards. In essence, they control the flow of money in Steemit. If you're at odds with those who have power in Steemit, you're very likely not going to stick around. While I think the system makes sense for those in power, I feel that it doesn't make sense for newbies or more critical or controversial types.

That's why "popular content" is not really described accurately in the Whitepaper. A more accurate description would be "popular content according to Steemit's power holders". If you're a blogger who has 1000 followers who are all minnows and who continually vote for your posts, you're not guaranteed to make a large payout. Your content may be really "popular" but unless your posts are liked by the Steem Power holders, you will not be rewarded with a decent payout.

Steemit is much more like a Kingdom than a collection of microcommunities.

This is the reason people get addicted to Steemit and it could be the main reason people get disillusioned and ragequit also. The perception of "unfair rewards" is a big reason that many of my friends have left Steemit. I'll explain how I deal with these negative emotions shortly.

Emotionally, people don't like to think of themselves as "smaller players [getting peanuts] for their long-tail contribution."

Human nature does not handle inequality well, especially when it's transparently known. The fact that the overwhelming majority will receive very little while the power-holder-defined bloggers receive massive payouts is the primary reason there will always be wars and division in Steemit. It's very similar to a survival of the fittest game with subjective popularity being the most attractive quality to possess. It's harsh environment will repel most level-headed mainstream individuals but it's an evolving game and could attract them in the future.

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  • Understand that you and I are guinea pigs in a new social media experiment.
  • Steemit is a bootstrapped social media platform that is evolving based on user feedback.
  • Steemit is a petri dish of ideas, none of which are perfect.
  • Steemit is not fair.
  • Steemit will never be fair.
  • Best thing you can do is create extremely high-value, authentic content, suitable for publishing in the New York Times.
  • If the current whales don't upvote your extremely high value content now, then perhaps the next crop in the future will.
  • Challenge yourself to create enormous value for others. If you help one person, you have succeeded in here.
  • If the current payout distribution model bothers you, ignore it. Maybe it will be adjusted based on user feedback in the future.

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All artwork besides the graph was created by @stellabelle

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Steemit is not fair.

That's exactly how life is. Not fair. That's why I always perceived Steemit as authentic but not necessarily balanced.

The fact that is imbalanced offers the possibility to make it big. If it would have been known from the beginning what you can do in it, perhaps many people wouldn't even bothered to try it out. But in the current form, there is always a chance to hit it big.

Somehow.

yes, and the addicts, fierce individualists will stay and normal people won't put up with it. Making the reward tail thicker will possibly make them stay.

Be advised that Zipf's law has a parameter of exponent. Steem uses 2.0 (i.e. voting power is squared) but I am suggesting to lower this around 1.5 to have longer and thicker tail. This reduces whales' relative power and increases minnows' power.

yes, I agree that making the tail thicker would greatly reduce user burnout and desertion. Have you requested a change in github? I feel that the reliance on the "long-tail" skinny rewards structure is not working with real people. Just now, I'm fb messaging a steemit friend who is feeling quite negative and down about this exact thing but he would never publicly mention it here on steemit. He's also on a "stemit vacation" to clear his mind. So, we have a situation where we never really learn what is causing people to leave, because they are attacked for admitting their true experiences or they just censor themselves and never fully disclose their feelings. I see it as one of the central problems that people leave.

Ironically I was taking a Steemit day off when this came to my attention LOL

I thought this was pretty well BALANCED as far as the writing, commentary and ideas went. That is always key.

I also know a lot of people feel this way, WRT a lot of the ideas presented here today.

People also need to remember you are an artsy person Stella and everyone functions and relates differently brain mapping and talent wise in life.

Most people will never bother to care or read a whitepaper or focus on maths and algorithims etc. These social platforms are just that - social and the best coder in the world may not be able to adjust for the human side of things.

With less people on here than ever writing, being active etc --- the numbers don't lie. The same people seem to be earning all the rewards, and let's face it-- the platform is predicated on rewards being paid to the community, that is how it is presented and sold.

A few people control all the wealth here, is the cold reality and no matter if you preach the steemit gospel or the bitcoin gospel, or are a Liberty based person or a statist..... these truths are..... self evident everywhere.

Less people on here - less content, is supply side economics. The payouts and views and votes should be more spread out IMHO from a simple Economics 101 mindset with some finite resources at hand and some variables in play on top.

But the rewards are really not being spread out, the same handful of top earners on here and the same top whales are still doing all the earning on curation and content, and other good content is continually overlooked.

I think you tried to be balanced and objective, I read this slowly. I just think you are trying to be you, and try to be fair..... and likely no algorithm in the world is going to be able to "account" for that and the humanity on here.

I have reminded people like is discussed here -- the whitepaper and metrics in this updated Steem ecosystem ( and it is that) -- are changed now mostly since the big Hardfork awhile ago.

Ironically, this post is undervalued and it is going to offend some people. I read all the comments. This series is a huge undertaking by you. Expect flags to be thrown LOL

Just my fiat-based 2¢.

thanks for your insightful comment.

I muddle along and do what I can LOL

You are welcome.

Great article and optimistic tone. I’m building a community to solve student debts and wondered if Steem reward system and Zipf will be better suited for such community. I’m thinking of crowdsourcing the whitepaper.

Regarding the Zipf law referenced here, I could understand how it’s applied literally with Steem rewards

Why did I wait so long?
It's 44 pages long.
I read a lot but 44 pages seemed like a huge time investment.

wow, just.. wow.

Many times when there is something that seems "too much for me to read" I think of it this way: "how much faster am I going to read and adapt this knowledge than it took the person/'s to write the 44 pages for me to understand it.

I find it funny that you thought 44 pages were too big of a time investment considering the time you have invested onto the platform in general. I also think your timing now to read the whitepaper couldn't be any worse considering how outdated it is after all changes and the upcoming ones.

Steemit is not fair.
Steemit will never be fair.
Best thing you can do is create extremely high-value, authentic content, suitable for publishing in the New York Times.

How are these tips?

actually, the info I provide in this post still applies to newbies. The basic algorithm for payout distribution has not changed. Also, there are no comics in the Steem whitepaper......and it still feels like a casino, too.

and it still feels like a casino, too.

I'm guessing this is a reference to:

Steemit is not fair.
Steemit will never be fair.

Tell me exactly how you think the platform is like a casino?
I understand the reference that commenting/posting/voting is like mining in bitcoin, but that the platform is like a casino?

In a Casino you need money to gamble and win money, a casino is designed to win in the end.
On Steemit you don't need money to win money, you need time, dedication, persistence and connections. There are too many members to count who have made an income but started with 0, me included.

Having been a gambler many years ago and the addiction it brought and the depression that came afterwards, it disgusts me that you like to compare the platform to a Casino.

Also, there are no comics in the Steem whitepaper

So you thought that you'd create 2 creepy comics that don't vizualize anything about the whitepaper and feed that to newbies? Do you feel those two "comics" represent the platform in a fair way? Do you think Ned throws dice whenever he is about to vote on content?

I would gladly pick your article apart and comment on each thing I think you gave an unfair negative look at, but I feel like I will be able to use my time better somewhere else.

it appears that you have some difficulty with accepting a version of reality that is different from your own.

Is the content of your posts a version of your reality?

critical shpitical.

your timing now to read the whitepaper couldn't be any worse considering how outdated it is after all changes and the upcoming ones.

My thoughts exactly, I'm wondering at what point we need a v2 of the whitepaper as we seem to be straying pretty far from the original paper in some ways...

Maybe after the roadmap could be a good time to update it. :)

Resteemed for later review.

Good post, very true. Love the casino and kingdom metaphors

ah, well, the casino metaphor came directly from the whitepaper....oddly enough.

Keep These Coming Please & thanks for your efforts! I admit that I too have looked at the white paper a number of times and opted to procrastinate reading it :(

It's way too dry for me. If I have to stop and find a video about Zipf's law in order to understand how an entire system is designed, then I'll probably just get distracted in YouTube and forget to read the rest of it. Art can help illustrate and drive home points. Also, kids learning this stuff can benefit too.

Art can help illustrate and drive home points. Also, kids learning this stuff can benefit too.

Yeah let's show images like these to kids! Great idea!

Totally!

Good post, thank you for sharing

you're welcome.

Great article!

These are classic symptoms of addiction.
who me? (siting on Steemit for a day here and there)

Your Emotional Tips are all good points

There is some really good advice in here. I like the overall positive tone. Life isn't fair, but instead of giving up, focus on what you can control and be hopeful that the rest will take care of itself :)

that's pretty much what I think makes someone be able to deal with reality.

Great post @stellabella thanks so much, I look forward to the next!

In fairness, much of the Whitepaper probably needs re-writing now.

Since it was written there has been lots of learning and many (fundamental) changes to the protocol and philosophy.

I imagine there will be lots more changes to come in the next 7 months also. The roadmap (when it arrives) should give a better clue to the direction of the platform than the Whitepaper at this point.

Well the basics which I covered have not changed.
Also, there were no comics in the whitepaper. I wrote it for people just coming into Steemit, not for people who already understand it.

Good post. I think it's great that you took the time to read the whitepaper. If more people understood the principles behind the system, I think there would be less frustration.

One thing to keep in mind is that the whitepaper is out of date in a few areas.

I know it's out of date. I think the reliance on zipf's law is where there is a miscalculation. Zipf's law is not encompassed in its true form in here because of the fact that the SP holders are the ones influencing the payouts. I'll be going into that in upcoming posts. Virality when basing it on a handful of powerful people's preferences is not true virality. It has the potential to get worked out, but when the system is designed using zipf's law, I don't think it will help this platform. Zipf's law describes a rich get richer, poor get poorer mechanism. 85% of the population will not be interested in such a system.

IMO, it really boils down to there not being enough rewards in the reward pool to go around. Even if the 'whales' were not the one choosing the posts, then you would probably just end up with a popularity contest. People like Justin Bieber, Brittany Spears, etc. would be getting massive followings (like you said in your post) and then people would just switch to who they were complaining about.

There is about 7k in rewards to be paid out each day (with current prices). That includes curation rewards as part of the payout. Even with 1,000 active users posting decent content, that's only about $7 per person.

I think having Zipf's law less drastic could result in better engagement. I'm in no way in favor of some totally equal system. What I have noticed is that the drastic curve doesn't mesh with human emotion. If a site carries too much of a negative cognitive load, it's not going to work. It really is that simple. Humans operate on an emotional basis.

Makes lots of sense, and your right at times it is very hard to want to keep working. I found recently @cheetah has actually been upvoting posts, but all the negative thoughts about @cheetah make even the comment on the post a bad thing. I think your right, we need a slightly more level playing field, the whales can still have control, but if we make it a bit more level increasing the meager rewards to users at the bottom, then more people will want to stay.

If the current payout distribution model bothers you, ignore it. Maybe it will be adjusted based on user feedback in the future.

If you want to provide feedback, then you must speak, hence not ignore it ;) Just wanted to point out that contradiction there :D

I have also alluded to the unrealistic expectations driven by comparative assessments with other posts. They excpect something to happen that doesn't, and keep seeing other people make more than them, even if they have better work. This creates disillusionment and feeling disenfranchised, so they don't want to stay. If Steemit was more correctly explained in how it works, this psychological factor would be greatly mitigated. Popularity wins out more than quality, and many people openly advocate for such a promotional direction in the future.

Well, when problems are big enough, so many people will complain that not everyone has to speak in order for them to get resolved.
I just wanted to clarify the thought origins of my sentence.

The casino thing definitely resonates with me. There is an addictive component some of us (like me) need to be careful of.

I think we are similar in that respect. I was just reading somewhere about that, and I think being an alcoholic and a compulsive commenter/poster goes together, at least that is my condition......I wish I could still drink, but the fact is, it makes me really ill, so I don't bother any more.

Well I can't drink because it nearly killed me and it would destroy my chances of every working again but I think you have a very good point. I think there are certain compulsive personality types which can get more easily dependant on thinks than the regular person. I might see if I can find some open access reviews of the literature and do a post on it - I know there are studies on it the only problem is most of them are behind paywalls if you don't have academic access and you don't get that unless you are working.

Very nice review! Thanks for sharing (sorry not to have anything deeper to say).

I mostly agree with your "kingdom" vision :) This is of course strongly correlated to the Zipf's law implementation for the rewards.

Thanks for you your comments. Merci beaucoup, somewhere i read you're French?
Transformation of a kingdom into autonomous micro communities is where I see the future...

I live in France, but I am no French ^^

This post has been ranked within the top 25 most undervalued posts in the second half of Jan 10. We estimate that this post is undervalued by $23.31 as compared to a scenario in which every voter had an equal say.

See the full rankings and details in The Daily Tribune: Jan 10 - Part II. You can also read about some of our methodology, data analysis and technical details in our initial post.

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Steemit might fail because of this long tail, when users start to wake up to the reality. It is in the interest of steemit and the whole steem blockchain to make it more fair, otherwise user retention will continue to be a major issue.

I totally agree and I have the facts to back up.

I think steemit is for me because i love to Challenge myself to create enormous value for others.