When you have ‘skin in the game’ and are both financially and emotionally invested in something it is hard to think clearly and rationally at times. I have found that with STEEM... I often say STEEM is my ‘soft spot’ investment. STEEM is something that I used to spend a disproportionate amount of time and energy on. Over the last year, however, I’ve taken more of a watching brief of STEEM. I’ve had a break on blogging about STEEM and cryptos.... Alas, events over the last couple of weeks have compelled me to take a closer look at the direction of the platform.
When I strip away the emotion, noise, and nuance, I see STEEM as currently undergoing a test of its antifragility.
A disruptive technology needs to be able to not just survive but grow stronger under stress.
STEEM has lofty ambitions. It is looking to disrupt, inter alia, the social media space. Thus being an open, public decentralised blockchain, STEEM should expect to be subjected to many attack vectors on the road to mass adoption.
The current attack vector being played out at the moment I see as the Delegated Proof of Stake (DPoS) equivalent of a 51% attack.
51% DPoS attack
It is, after all, an obvious exploit. Especially for a nascent coin, with a relatively low market cap.
All it takes is an attacker to acquires a large enough stake to appoint the top witnesses and can make software changes, produce blocks to benefit their interest rather than all Stakeholders.
So how does a DPoS coin like STEEM survive a 51% attack?
The deterrent to a 51% attack should be simple.
A DPoS community under such an attack can fork away to a new chain and neutralise the attacker's coins. A rational actor would understand this.
It would take an irrational actor to think they could just co-opt a decentralised blockchain.
Be a bad actor, lose a ton load of money to be on a chain nobody else is on.
The true value of any public, decentralised blockchain, like STEEM, is trust-lessness.
STEEM stakeholders should not rely on a large stakeholder ‘do the right thing’, for the ‘sake of the community’. That is not a decentralised blockchain. That is a blockchain beholden to the goodwill of a benevolent dictator. It would be no different than Facebook users relying on Mark Zuckerberg or Twitter users relying on Jack Dorsey to 'do the right thing'.
STEEM stakeholders only need to know that the core community of stakeholders is incentivised to maintain a public, open, decentralised, blockchain.
Saints vs Sinners
Granted, this STEEM/ Tron situation is more nuanced than a simple 51% attack.
As of now, Steemit Inc is a de facto 51% attacker of the STEEM. It is behaving like a bad actor on a decentralised blockchain (whether they know it or not). Yet Steemit Inc is the same entity that many know as lead devs of STEEM and owners of the site that become synonymous with the STEEM blockchain (steemit.com).
The ’Soft Fork’ Witnesses are seen by many as saviours of the STEEM blockchain and bastions of the community. To others, they are seen as a cabal that started the mess by massively over-reaching their remit and undermined the integrity of the STEEM blockchain by covertly freezing accounts.
This is why we have a situation where, on one hand, well-known Exchanges kowtowed to the wishes of Steemit Inc against their own, the STEEM community and their customer's best interests.
On the other hand, many well-known Crypto proponents were left aghast. The idea of Crypto Exchanges helping to facilitate a 51% attack on a public blockchain is incredible. Equally, Steemit Inc appointing its own sock-puppet accounts as Witness Nodes and validators of blocks as an anathema.
Growth & decentralisation
There is uneasy friction between large investors/ stakeholders and cryptocurrency. Wealth and value tend to concentrate. The cornerstone of cryptocurrency is distribution.
Steem should be open to people acquiring a large stake, with a view to providing value, building businesses, running applications and services and helping the platform grow.
In principle, any DPoS stakeholder should be able to vote,and transact as they please. In practice, however, every large stakeholder needs to be incentivised not to allow their stake to undermine decentralised governance.
The challenge of incentivising large stakeholders, institutional investors and the like to switch to cryptocurrencies whilst maintaining the decentralisation of the chain is not just a challenge for STEEM but all blockchains. We're just seeing it ply out with a DPoS one.