Why Steem is Centralized (yet)

2년 전

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Nobody controls the steem blockchain


Let's get this one out of the way. Assume that Steem Witnesses work as intended and the blockchain is unhackable.


Steem vs Bitcoin


If one man owned most of bitcoin and Mt.Gox, with no other website or application that allows you to trade, bitcoin is centralized. It would be vulnerable to even the smallest malicious activity from both inside and outside.

Mt.Gox did get hacked in 2011. In the same year they managed to lose over 2,000 bitcoins by sending them to an address with no private key. In the midst of all this, they sabotaged themselves with insider trading.

Within a few years, developers and users opted out. In 2018 you have multiple exchanges for bitcoin. They're still centralized and dirty, but at least you get to choose. Thousands of companies compete to run the most secure wallets, so users can keep their bitcoins away from exchanges. Wallets are constantly under attack but many of them by now have been battle tested. In some countries you might even find an ATM for bitcoin. It has become decentralized from Mt.Gox.

Now let's talk about steem.


Ned owns over 50%


Even 1% stake is extreme for bitcoin. Ned owns over 50% of all steem. Steem's entire market cap is around $500,000,000. Considering Ned owns at least 6 of the top 10 whale accounts (https://steemwhales.com) you can do the math. It's well over 50%. According to Dan it's more like 80% but let's be conservative with our estimation.

Even though steemit.com is opensource, nobody is creating decentralized apps on the steem blockchain. It's physically impossible. You can't build a community sandbox inside somebody's backyard. If Ned decides to shutdown steemit.com you don't even have access to your own wallet.

Ok, I might have exaggerated a little because there's a few hundred lesser known apps running on the steem blockchain. You probably know Dtube, Utopian.IO, and Busy.org. Maybe I shouldn't say "nobody", but 3 is not exactly an ecosystem either.

Think of it this way. There's only a million steem wallets in the entire world because Ned controls the register process. You must wait a week before he verifies you and delegates you some steem power. Technically you can pay the account creation fee yourself, write code to communicate directly with the blockchain, or use third-party software, but who does that? When's the last time you had to wait a week to create a wallet? For any cryptocurrency?


Blockchain is open to everybody. Steemit isn't.


If anybody can create their own tokens within minutes, sustain their own rewards pool, and stay completely independent from steemit.com, you have decentralization. Steem doesn't have this yet. The problem is, just like Mt.Gox, steemit.com is the only gateway to the steem blockchain. It's actually worse than Mt.Gox because steem doesn't have the attention that bitcoin has. No greater outside force is coming in to make the changes. No competition. No improvements. No forks. Only Ned.


Imagine a world where anybody can build steemit.com


There is no Ned. You're the CEO. You can create your own tokens, as many as you want, and distribute them however you want. You can hold on to 99.9% of your tokens, or 0.1%, or anywhere in between. You choose. You have no idea whether people are willing to buy your tokens or not, but who cares. Everybody will create their own. The most popular guy with the best recipe the majority likes will have a token that holds real value. It's probably not going to be you because you don't have a billion active followers. You can take comfort in the fact that none of this requires permission from Ned.

It might be called SMTs (Smart Media Tokens). It's actually what I hope SMTs would look like. The problem is we have no idea how centralized SMTs will be. Back to reality, we have to wait for Ned's decisions.

There's another option. You can do everything above and more. It's not an imagination, but a predictable future on a new blockchain (or an upgrade). You can create your own Uber or your own Paypal, however you like. You might even create your own banking system (in the long term). The only problem is there'll be others like you. Nobody's going to use your app unless it's faster, easier, and cheaper. There is no agreed name for this yet. Dan is calling it eos. Vitalik is calling it ether. There's others like cardano and qtum. Most of them are riding the trend of decentralization because no single company is bigger than the free market itself.


Steemit is running out of time


Within a year after leaving Steemit Inc, Dan has created an upgrade that is bigger in scope and more decentralized than steem. It won't be long before he releases a new social dapp on top of eos. It might as well be tomorrow (or as soon as eos mainnet launches) because it's just another version of steem, which he built. Whatever the date, it's likely to come sooner than decentralization of Steemit.

I hope I'm wrong. I still have faith in Ned.

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  ·  2년 전

So many facts are wrong. This individual can not be trusted to understand the tech or do basic research. Steemit is one of many interfaces. If Steemit went down everyone would still have access to the blockchain. I never said ned has 80%.

·

oh wow 😨 dan larimer, thanks.
yes my stuff is wrong. i've always been saying it's nothing but opinions.
but a reply from you, i must admit it's a shock. honored and heartbreaking at the same time. even surreal.

no you didn't say 80%. i did. i was refering to your $400m comment in the past which i twisted.
steemit is one of many interfaces. i was only hoping for more. it's the only thing i've been saying recently.

i still have hopes on eos, or other blockchains like steem, toppling even the most tyrannical governments.
most tyrannical as in both north and south korea.

It is very amazing and attractive info..
Thank friend for your post

Thank friend for your good information

i enjoy your knowledge friend you are a successful person
you know what you say thank you for sharing it with this community
It terrifies me to think that the Steemit would disappear

Bitcoin vs Betcin says well. Thank you..............

Sir @roundbeargames what is the Mt.Gox thing I did not understand well And a little more. ..

In which city is there a bitcoin ATM ?? You're really a good observer☺

This is very amazing info...Thanks for shareing this post..Lovely writing on this topic..

writing nice friend, your knowledge can I copy with writing, steemit can always adjust themselves, hopefully always succeed, success for you, @roundbeargames,👍☺️

i Lovely on this topic.. thank for share this post

  ·  2년 전

You have discussed inportant topics.
We will get a lot of help. Thank you sir.........

  ·  2년 전

fro your post

Thanks for share steemit,bitcoin,Blockchain topic.........

Thanks for the explaination on this.

Thanks for your information dear @roundbeargames

wow, thanks, i never had seen steem whales or heard the theory ned owns 50% of steem, i had no idea.

sounds like SMTs can't get here soon enough ... and when is that fork i've heard about forever?

... like watching paint dry around here sometimes

Do you think that even if Steemit's decentralization happens in the same way, it will be at a disadvantage against what Daniel Larimer does? Thanks for sharing my dear friend @roundbeargames

·

well, we'll have to wait and see. nothing is 100% decentralized. but we don't want a single entity holding on to too much control. soon enough i think dan's new platform and steemit will coexist. are they going to eat each other until one comes out on top? maybe. it's a guessing game at this point.

but if you ask me you just can't have 2 suns.

I do not have a Blockchain account. I'm going to create an account soon.

Everyone knows that Steem is too centralised but is EOS much better. It seems that anybdecebt project will be heavily bought up by whales reducing decentralisation. I am a big believer in EOS and hope it doesn’t end up that way but only time will tell.

good written friend, if the Steemit is still centralized I do not think anything will destroy it, great publication @roundbeargames thanks for informing us

@roundbeargames, asi es debemos creer en Ned. Saludos y viva el STEEM

aqui estoy amigo y que viva el steem, muy buena informacion saludos

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·

Well, @dan disagrees :-D

Nothing is safe and everything is possible, friend ...! Thanks for sharing this information. Regards ..!

Every time you talk about this I think about the future of steemit, maybe Ned is too confident or knows something that we do not know but I do not know how I'm beginning to worry

thanks for your post

actually i don't have a good knowledge about eso .. bt i will try to got this .. bt nice post .. have a nice day friend

Thanks for your information dear @roundbeargames

Plenty of people use @anonsteem , it is a great service and in the end you can make that ~ $10 back in your first week on Steem so I think it’s worth skipping the wait time. Also, I think Ned is starting to show a different side of himself lately (in a good way). I think in the end, if you hold Steem Power, then you influence who the witnesses are, and they are the one who actually enact changes on the Blockchain. During this Beta phase I think Steemit Inc will always have a part in developing but once we have the training wheels truly kicked off, I think Steemit Inc and @ned will take more of a back seat approach and let the witnesses take us into the future.