When Is a Blockchain no Longer a Blockchain?

in Threespeak5 months ago

▶️ Watch on 3Speak

Some commentary on the latest Steem Hard Fork. I don't get into how this hard fork stole funds from over 60 user accounts, transferred them to a single account which later got taken over and transferred those funds to the Bittrex exchange. Plenty of people online already talking about that. Instead, I wanted to ask a more fundamental question as to when a blockchain is no longer a blockchain. How do we view distributed consensus and at what point does it just become a centrally controlled database without any real security?

Here's the tweet thread I referenced:

Here's the backstory: https://peakd.com/steem/@lukestokes/how-steem-became-hive

Here's the original open letter from Justin Sun after the very first action taken by the Steem witnesses almost three months ago: https://steemit.com/steemit/@justinsunsteemit/open-letter-to-steem-community

▶️ 3Speak


My take is that Steem was not a "real" DPOS Blockchain the very first moment the community had to rely on Dan and Ned's commitment to not using the voting power of those initial mined tokens when the chain was a POW one. They could have done what Justin did and the result would have been similar. That is the reason Hive had to be born without that jeopardy in order to be a real DPOS chain.

Interesting perspective. Yeah, that stake was always a very real threat. I also think there's more work to be done. I've had some really interesting discussions participating with P2145 - Standard for Framework and Definitions for Blockchain Governance and, in particular, thoughts about the role of reputation in decentralized governance systems. That might be the key to make this stuff actually work.

Great vid Luke thanks!

Is there a way to improve DPoS governance?
Some sort of combination between account reputation and quadratic voting for better governance?

We need some sort of an efficient system for accounts reputation, maybe include factors like age, stake, activity and other accounts rating. Multiple this by the square root of the stake. (or some other root value).

Not be spamy, just did a post on the topic, if you have the time check it out.

Go ahead and drop the link! I always encourage relevant link sharing in comments.

As for what we can do to improve things, I do think reputation plays an important role. Conversations I've been having as part of P2145 - Standard for Framework and Definitions for Blockchain Governance are moving that direction as well. Without reputation, sock puppets are always a threat and the web of trust approaches have risks as well.

I personally consider that all public blockchains must have three qualities

  • Trustless
  • Immutable
  • Verifiable

Anybody can verify what is going on with STEEM. But the trustlessness is broken because a single entity is taken over 51% of the witnesses and immutability of asset ownership is a thing of a foregone era after HF 23. They are now doing another fork (0.23.1 IIRC) to limit the activities of @community321

They are also breaking the immutability by censoring accounts and stealing funds.

All I'm hoping for is Bittrex to stand up for the same things blockchains stand up for and do the right thing by returning funds to the owner. The issue is Steemit Inc might censor those again. Funds will have to be converted to HIVE and sent for the accounts on HIVE blockchain. If that doesn't happen, I at least want to see the funds get burnt instead of seeing them ending in the hands of Justin Sun's sock puppets.

Thanks for the response.

great information.
good analogy would also be "you live in Alaska, and you wake up and learn that Trump sold Alaska to Putin, and Putin is paying him to his own private account"

Heheh. Nice.

getting kids into videos about blockchain always a cool thing!

When I heard the door open, I was thinking, "Ah, really? I'm trying to do a video here" but then thought better of it, and it turned out great. :)

She was watching herself on YouTube this morning and very excited about it.

Wonderful analogy Luke. You nailed it. Wonderful video and drawings from the kid ✌😂

Thanks. :)

Informative and a bonus at the end with the ice cream :)

I agree there will likely be a huge exodus in the next four weeks. I'm tempted to take a look at the powerdowns started on Wednesday, not sure who's accepting STEEM at present but if anyone is, they are going to be busy.

It's going to get... strange. Imagine 4 weeks from now where every major holder of STEEM who sees what this system has become dumps. Who will the buyers be? I hope just Justin and I hope he kinda gets wrecked because I do feel some Karma is due his way.

I'm so glad you made this. Such important information for people to understand. I hope @Bittrex is able to see their way to acting consistently with the fact that the chain has been corrupted.

I hope everyone who still thinks of SteemTron as Steem instead of Hive as the renamed Steem gets this information as well.

My feeling is that a blockchain is no longer a blockchain when it ceases to perform the function of a blockchain. That is when its ledger can no longer be trusted to represent the historical record of transactions on the blockchain. Both the STEEM and HIVE chains have failed in this regard and we are witnessing the failure of DPoS Governance in my opinion; nothing about the half full or empty glass of the centralised BS narrative.

How has the Hive chain failed in that regard? Can you point to one example on chain where that happened? If you're referring to the Hive genesis block, that's invalid. There has not been a single instance I know of where Hive has not accurately and exactly reflected every single transaction made to it with robust security due to distributed consensus.

Comparing Steem to Hive at this point is comparing a database with one administrator to a global, permission-less network with over hundred independent validators.

The key question is when does trust break down? Was it when Justin took over given the known threat of the centralized, steemit ninja mined stake? When they started censoring accounts? How do we accurately measure trust and when it breaks?

In the case of steem, trust broke when the exchanges staked their steem and voted in multiple copies of Justin sun to fill the top 20. It is possible trust could have been recovered after that point, but the continued use of Sybil witnesses made it impossible

Maybe it's naive, but an actor posing as multiple witnesses is a lie. Lying breaks trust. Using the Steemit, inc stake for voting would break trust with a number of steem community members, but may not have been enough for layer zero to engage protective action

The greatest thing about DPoS is that it puts the human element on chain. It doesn't have to stay as rigid as other systems. That means we can forgive, forget, and negotiate through a number of scenarios. As such, only the DPoS community can really decide when trust has been broken for them

I don't think there can be a universal measure of when trust is broken, but for cheeses sake, can we all at least agree that a successful 51% attack used to initiate a Sybil attack is definitely past the threshold? 😄 The answer is "no". We cannot all agree on that. Exchanges see Steem as a legitimate deployment, and there are a number of users happy with the benevolent dictator

Ask the Korean whale where his fund's history disappeared or how the Ninja coins of STINC have been moved around. There are others yet the pettyness made me turn away from following it all.

If the V.22.2 Cabal wanted to approach this ethically they should have started a fresh chain and then folks could have calmly sold their STEEM to buy HIVE as it became available. But the V.22.2 Cabal wanted to double dip while not allowing others to do the same. What they wanted was to remove all decenting voices to sure up their power base.

Their actions have doomed both chains in my opinion. Who would invest in a governance which has been shown to fiddle with both chains. You think @theycallmedan would double down if he had anything left or would he be sensible and invest in Monaro this time? 🤓

You being a self proclaimed libratarian should be the last to defend this sham, Luke. Shame on you.

P.S. In case there is any doubt there is a god damn blacklist of all accounts whose funds mysteriously disappeared after the HIVE fork. Is that enough proof for you? Probably not as you were in the V.22.2 Cabal.

I believe there's now a random power down and in one month everyone will be off steem and it's going to be a really strange, will the exchanges accept steem, what the be the effect on prices when there's a massive dump.

The writing was on the wall a year ago. Without people, there is no network effect.

It will be interesting to see who sticks around just because "Justin make token go up!"

I wonder if exchanges start delisting Steem, will there be a domino effect one by one? I feel bad for those not following the conversation closely who don't realize the value they built is still safely secured over on Hive.

It might happen. However, don’t be surprised if Steem gets a rebrand and Trx replaces Steem tokens.

I am begging to wonder why witness accounts are limited to the to 20? It would be way harder to corrupt if it was 200 or 2000!

The more witnesses the more hive generated, and that's not a good idea in terms of price in my opinion

No, I'm pretty sure there wouldn't be any more hive generated. How come you believe that?

A blockchain is only as secure as the rewards given to the block producers to secure it. If the reward is not high enough, quality people go elsewhere and the security of the network drops. I'm not convinced increasing the number solves any problems because the amount available to reward them is the same (unless you increase that amount which would probably take away rewards from authors and curators) so each witness would earn less. The problem was a sybil attack where one stake holder can convince exchanges via lies to control the whole chain with sock puppets. It wasn't about the number of individuals because one individual controlled all of them.

unless you increase that amount which would probably take away rewards from authors and curators

That's what I was referring to. Making the number of consensus witnesses higher does not directly cause the witness portion of the mint pool (I just made that term up, I'm sure there's a proper word for it...) to increase.

so each witness would earn less

Not really. The consensus witnesses would earn less, but assuming only the consensus witness number to change, the witness rewards would only be distributed "better" among all the witnesses. While increasing the number of consensus witnesses would probably add a little more decentrality at the cost of a little harder organisation when hardforking etc. I don't think that the major problem lies there. I think that the big problem is that a single account can vote enough witnesses to reach consensus all by itself. I would much rather see the number of witness votes limited to < Consensus threshold. While that would enable a smaller part of the stake to block any hardfork, I think that's okay. For example the US constitution can also only be changed if 2/3 agree on it, and just like that in Austria as well. It's not uncommon to have a minority able to block major changes to the fundamentals of a system.

I guess it depends on if backups run the same infrastructure as consensus witnesses. Running a full node, for example, is expensive and few do it. Maybe the any_x path of funding that via proposal is the right way to go so that more consensus witnesses makes sense. I wonder also if moving away from approval voting to something else (some argue one token, one vote, some argue quadratic voting, etc) would be better.

We usually agree on everything blockchain, and that continues

Awesome seeing you dadding!

Good work on many fronts, sir

Thank you. :)


Is hive looking at a lower time power down? Think i would feel safer

It was discussed previously about 7 months ago before all this drama started, I think. From my memory, it didn't get enough support and more people preferred to leave things as is. I have mixed feelings about it. The long power down means skin in the game commitment to the long-term success of the platform. That's a good thing.

I hate to say it but DPoS is looking pretty weak. It wasn't looking strong before but all DPoS chains have all kinds of governance drama.

I don't think you're wrong, but I also think DPoS governance drama is out in the open where a lot of PoW governance drama still happens on github repos, within mining pools, and in back-room private discussions. There's also the 51% attacks that happen as well. Hive has been strong. Steem is no longer a blockchain and hasn't been for some time, so comparing the two is apples to organges.

No one seems questioning the extent of drama surrounding DPoS Governance, Luke, what @brianphobos seems to be suggesting is that DPoS Governance seems lacking. Meaning less secure, less trustworthy and more susceptible to corruption than other more traditional crypto governance systems like PoW.

No amount of back room discussion is about to change the fact that in the STEEM legacy forks the ninja mined fiasco is kicked further down the fork in the road. No longer STINC being the threat of attack the ninja plunder is now safely tucked away in a slush fund guarded from plunder by @gtg's Return Proposal ((#0); ensuring that no proposal shall see approval without a majority of approval from the V.22.2 Cabal.

How was this different than the old STEEM? Oh yeah, decentralisation. That narrative rings a bell.

Even with STINC's ninja mined horde out of the tabulation due to it being in a slush fund, here's a fairly recent state of affairs... which seems pretty weak to me.


Can you explain a bit more about what the colors mean in this graphic? Is this related in some way to account activity or number of accounts or something else? Whales have more power in DPoS, which is understandable and the system was ever changed to adjust for this they would simply split up their stake into many smaller accounts to pretend to be minnows. Ultimately, those with skin in the game get to direct how the chain evolves over time. That's the main premise of DPoS.

What concerns me most is that the STEEM token still has market value, even with so much consensus leaving the Steem chain. This says to me people don't really care about blockchain rights or actual value, they just want to speculate on a token.

Can you explain a bit more about what the colors mean in this graphic?

My understanding is that the colors represent that more active HPs as opposed to those accounts simply holding and not active yet it would be best to run that by @arcange to verify that.

That's the main premise of DPoS.

At present that is indeed the main premise. My feeling is that that premise fosters a continuation of the status quo which in ground breaking technology is not the best idea. One approach that could help to shake up the status quo, in terms of reward distribution at least, would be to have one's HIVE Power being weighted against how much rewards one takes from the ecosystem. Let's take as an example an issue like self voting. Those that are self voting an earning large rewards as a consequence would find that their voting power would decline in some weighted fashion so that their witnesses vote, up votes, etc. would have less power. In that way the status quo could be more easily challenged as there would be those primarily here for the milking and those primarily for the community. Over time the milkers' influence would wane.

This says to me people don't really care about blockchain rights or actual value, they just want to speculate on a token.

Or perhaps a billionaire is keeping things pumped until the upward pressure on HIVE comes to an end with the last of the power downs on STEEM. Until a week or so ago my 2500 BTC satoshi sell order on Poloniex (JS' exchange) would normally be met within a week time frame. Something was driving STEEM up to 2500 BTC satoshi on a weekly basis.

Very interesting idea in terms of keep tracking of the takers vs. the holders. I've thought about this for a while in terms of the exchange transfer reports I used to do. It could even been done as at an interface level so people would know how much someone extracts verses deposits in terms of value. Either way, though, I think it could be gamed and by that I mean separate accounts could be created and funds moved around so that some accounts have terrible reputation as they are only used for dumping value and other accounts are kept "clean" where deposits happen.

Either way, though, I think it could be gamed and by that I mean separate accounts could be created and funds moved around so that some accounts have terrible reputation as they are only used for dumping value and other accounts are kept "clean" where deposits happen.

Yep, it will be studied to be gamed. No question. 😎

Still not convinced it would not help in the weakening of the status quo, though.

Really good stuff Luke! I am very impressed by how you very succinctly explained the STEEM/TRON actions as well as HIVE's actions.

Thanks Sarge.

Wow my kids can't stand two seconds of my talking about blockchain. What a wonderful daughter.

Haha! I think she just liked the idea of being on camera. She watched herself on YouTube today and love it. :)


You’re missing an important thought which is "pretending that it still is a blockhain is a way how to make shitloads of money for many people". This is something that most projects in the ecosystem do...They pretend that they either are solving an issue or that it is a safe blockchain. Steem basically became another shitcoin...but shitcoins do have the tendency to make money for some speculators anyway:)

BTW what a lovely father you are:)))