Does Steemit Inc Have A Conflict Of Interest?

9개월 전

There was a proposal that Steemit Inc threw on the table last week that they referred to as the "Economic Improvement Proposal". This is not actually their proposal but was put forth by @trafalgar.

The point of this post is not to debate the proposal itself, the shift from linear rewards to convergent linear rewards. This is already being posted about and we will see discussions on this elsewhere.

For those who are not aware of what I am referring to here are two posts. The first is by @steemitblog which provides an overview of the idea. The second is by Steemit Inc's Senior Blockchain Engineer.

https://www.steempeak.com/steem/@steemitblog/improving-the-economics-of-steem-a-community-proposal

https://www.steempeak.com/steem/@vandeberg/reward-curve-deep-dive

The fact they are commenting on a proposal as opposed to being the ones to create it makes a difference. They are not, to my knowledge, the ones driving this.

Yet, there is some cause for concern.

Steemit Inc is a private company. It is incorporated meaning that it is accountable to it's shareholders. The goal of the company, like any corporation, is to return the most to its shareholders. This is why corporations exist. Public or private, they all tend to have the same focus.

This means that Steemit Inc is responsible to Steemit Inc, first and foremost. People invested money (I presume) in Steemit Inc expecting a return. Whoever owns the company is looking to maximize this.

This filters through to people who work for the company. When Eli or @andrarchy speak, they are doing so as paid (I presume they are paid) employees of Steemit Inc. Once again, that is where their responsibility and loyalty lies. Steemit Inc is the priority to them, first and foremost.

While there is the "one hand washes the other", and relations improved, it think it vital to remember this.

Which brings me to the nature of the potential issue.

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Source

Steemit Inc is responsible for the programming of the blockchain. They do all the coding, period. While outside "suggestions" can be taken, they are the ones who decide what gets coded. Of course, the implementation is ultimately up to the Witnesses but they are not involved in the day-to-day process. Code is presented as a package for a Hard Fork, hence minor things are not likely to be researched (after HF20, we learned major things are overlooked too).

In addition to being the developers for the blockchain, they are also the owners of Steemit.com. This was the first interface of the ecosystem, a blogging platform. As a private company, the goal is to maximize the return off this asset. We recently saw the addition of Google ads which, according to Eli, is generating $3K a month for them. While that is nothing to write home about, I am sure it is just the tip of the iceberg in their plans. We will see other things to maximize their return in that area.

Here is the issue: over the past few years, we saw the ecosystem evolve. This is no longer just a blogging blockchain. Certainly, there are a few interfaces that cater to this but we are also seeing many more that are moving away from that. For example, we now see a number of applications that use the Steem blockchain for Proof-of-Activity. There are also some gaming applications that are being created that use the blockchain in interesting ways.

The point is we have no idea what is going to show up in the next few years. With the open nature of blockchain, the development is going in many different directions. I am certain what we see in 2-3 years will really blow us away compared to what is available today.

Steem is a unique blockchain. It is one of the few that can offer developers both Fast AND Free. The blockchain is Fast (3 second per transaction) and transactions for the users are Free (no costs for mining, RAM, or CPU). I am not aware of too many that can make that claim.

This means there is no telling what we are going to attract. There is a realistic chance that we not only move away from blogging but the entire content creation model as we know it. Content can take on many forms and it might not be blog (vlog) posts like it has been.

Which is the source of conflict. What is to prevent Steemit Inc from coding things that favor itself? The company is obviously intent on making Steemit.com a big success. This will create even more incentive to protect the asset as much as it can.

It is the nature of business to try and protect what you have. We see this daily with all the attack on this industry. The established entities are doing all they can to defend themselves against the disruption posed by decentralized blockchains. There is no reason to presume that Steemit Inc will not do the same thing. In fact, depending upon the shareholders, the project team will be forced to do that.

The value in open source and decentralization is that a variety of interests can be represented. All are welcome to build what they want and the ultimate decision maker is the user base. They decide if an application is worthy or not.

In this instance, the potential exists for Steemit Inc's responsibility to itself to override the interest of some in the community. What if we get to the point that blogging is a very small part of this platform? I believe this is a likely scenario based upon what the present internet is used for and my understanding of some other technologies that are coming down the road.

Is there a conflict of interest with the ones responsible for the coding of the blockchain also having a vested interest elsewhere?

Food for thought.

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I don't really feel that there's a conflict of interest here. Steemit's STEEM holdings are a FAR larger asset than steemit.com, so if they want to act in the best interests of their shareholders they should do whatever they can to raise the price of the token. Doing so would also help steemit.com more than anything else they might do.

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In other words, they probably shouldn't consider drastically modifying inflation so casually. The entire reason cryptocurrency exists is due to central banks having full control of the inflation of their product. Absolute power is going to Steemit Inc's head.

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I agree, we need a total new re-shape of the functioning of Steem the base layer Token, its Reward Pool and the relationship with Steemit.com and the upcoming SMT projects. Here is my take on this.

I would like to see, that the Coin "Steem" and its "Reward Pool" will be designed more towards an infrastructure Coin instead of using it primary for POB content discovery. The reason for that is, that with the introduction of communities and SMT the Steem Ecosystem is not only more about "Content creation" and discovery.
No, we have a bunch of financial dapps, gaming dapps, services etc... which don't have anything to do with content discovery. All those Dapps should have more or less "equal" chances to receive Support from the underlying Steem Reward Pool mechanism to earn and empower their communities.
I think Steem is good with Steempower for Voting on Witnesses and Proposals (plus a new feature in the future Voting for Communities and Dapps) and as a source of Ressource Credits. For me that should be enough, on the level what Steem is doing to support its Ecosystem and for the use of the POB mechanism...only vote for Witnesses, Proposals and SMT or Communities.
No, more voting and abusing the reward pool by creating and discovering or gaming the content creation part.
All this POB content creation and discovery mechanism should be happening on the level of SMTs, and its communities, because these groups will have Admins who are able to set in rules how each community handles its users and the way they value content creation.
If Steem gets understood as a infrastructure Token and SMTs are understood as a empowering Community Token, than we have a clear Vision for all participants Investors, Users and Creators alike.
I don't like the idea that we are aiming for a SMT Ecosystem where all these project fight for attention but the real mining of Steem only happens on the content side of things...somehow that doesn't make sense.
Why should other Dapps or Communities suffer from miss management of the Steem Reward Pool which is only used for content creation and discovery?

Changing the way inflation is distributed on the blockchain and reminding everyone that Steemit alone makes this decision is the best way to scare away investors, potential or otherwise.


What's next? Stop inflation from decreasing over time and bumping it up to a flat 20% per year?


All of the proposed changes will be gamed by the stake holders that have the highest incentive to do so. The rich get richer.

In anticipation of these changes being made I'll be designing a few simple apps to show just how easy it will be to game them.

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People often don't realize that any change will be gamed. The only way to stop it is identification of unique individuals which obviously gives up privacy.

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"...I'll be designing a few simple apps to show just how easy it will be to game them."

=D I'll be looking forward to seeing them.

Thanks!

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The fact that they do not vote for witnesses is a good counterbalance which provides a sorts of governance to what code is deployed. Many more have gotten more involved in it and now have skin in the game so they will also defend the protocol.

Posted using Partiko iOS

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they do not vote for witnesses

Didnt know that! So many things do not know about steem...

Posted using Partiko Android

Thank you so much for participating in the Partiko Delegation Plan Round 1! We really appreciate your support! As part of the delegation benefits, we just gave you a 3.00% upvote! Together, let’s change the world!

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You have receive an upvote. Thanks for playing moonSTEEM

We just need to make sure we're voting for witnesses who will shun code which isn't in the long term interest of their constituents.

The investors of Steemit.inc are public? We know who are them?

Or its just as many banks, hide entities with a lot of ghost companies?

Posted using Partiko Android

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Steemit is not a publicly traded company. The shareholders are private.

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Not cool. Not cool at all... Well, at least there's room to maneuver.

We need more full nodes, and i love the work of partiko and steempeak. Hopefully "we" can growth bigger than "them" on the long term.

Thanks for your time! Exelent post as usual

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I don't think it would make sense for Steemit Inc to prioritize steemit.com in blockchain development to a significant cost to every other app. Why? Because Steemit Inc stands to benefit enormously from the price of STEEM going up as they are the single largest holder of it. They could do it out of sheer stupidity but what will ultimately drive the price of STEEM is adoption. To hamper adoption in any way would not be in the interest of any holder of SP.

There's no compelling reason to use Steemit.com over busy or Steampeak at the moment. I'll read up on those reward pool articles, haven't had time to look into them lately.

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I agree. I use both of those over steemit.com. The reality is that most tend to use their interface which is woefully outdated.

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Just as much of the world still burns coal for power.

I feel as though there's a delicious irony in the fact that I had such joy for the platform when it was represented entirely by Steemit, that @mattclarke convinced me to get "STEEM" licence plates for my car.

I still have that as a plate - but I'd love to drop the "IT" part one day. ;)

Too bad the fiat overlords (aka the state's government) who issued it won't refund me on the three years of advance payments I did on the plate.

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LOL Yes they are good at taking money but not very good about giving it back.

You make an interesting point, and I reckon it lamentable that US law requires Corporations to seek the best financial returns for stockholders, as this obscures the original intent of corporations, and neglects other values more important to people. No one should argue that financial returns aren't important in the extant society. However, it should also be obvious that digits on ledgers can be utterly inconsequential to stockholders in certain circumstances, and completely valueless in comparison to life and limb, or even far less important matters.

A glance at the history of corporations reveals that their origin was based not on financial returns, but the prosecution of developments sought by society, centuries ago represented by monarchs. Profit was the carrot dangled before investors that rewarded them for doing things beneficial to society, and only after the perverse legal interpretation of corporate status as 'legal persons' were they restricted to the narrow purpose of maximizing profit.

Geopolitical realities reveal that mere mammon is often of little consequence to civilization and the peoples that are the actual purpose and cause of society. This view negates much rhetoric that conceals sociopathic impulses harming people - actual persons, rather than legal fictions - whose interests are of essence in effecting society and civilization. Are piles of lucre the purpose of our blood and toil, or are our lives and happiness? Dollars are not our beneficiaries, but rather the opposite.

Our sons and daughters, mothers and fathers, not our banks and service providers, are the point of our existence. Reality often intrudes on fantasies to good effect in my experience, and I suspect that Steemit, Inc.'s prosecution of business reveals such intrusions, as they themselves have noted your thesis that Steem should not be restricted solely to blogging interfaces and business endeavors. No few users have lamented the lack of focus on improving the lot of creators on Steem, and but a bit of consideration is required to observe that Stinc has more often than not looked to wider implementations of business on Steem than merely promoting it's original model for profiting from transacting in Steem.

In reality, Stinc will benefit more in the long run by building the blockchain into a venue for business that eclipses Steemit.com and blogging, and they themselves originated this view of Steem and Stinc. While there is a legal hurdle that must be negotiated - Stinc cannot be credibly accused in a tort action of neglecting to profit it's investors financially to the maximum degree possible, or undertake liability for violating US law - viewing the interests of it's investors as better served through increasing the breadth and depth of Steem's potential for supporting business endeavors reflects more closely the actual world we live in than restricting Stinc's efforts to whatever produces the largest digits on accounts this quarter, or the next.

Simple increasing digits is potentially of null value to it's investors, and corporate law is a reef of fantasy that might destroy Stinc's ability to deliver actual valuable returns to stockholders, as there are very good reasons people delay gratification. It has been my observation that Stinc does take a longer view of profit than mere quarterly returns, and has more than once been accused of defect by those whose grasp of their interests is limited to mere immediate financial returns.

Thanks!