Short recap on dPOS (skip to point 3 if you read the last article)

simply: dPOS as we figured out last article is a consortium chain based consensus where a 2/3 majority decides the state of the system. This means that there are no 51% attacks, but there can be a 1/3-malicious node attack. Yes, 33%-minority attack sounds heavy BUT attacking a dPOS Chain like Steem is not the same as attacking Bitcoin with majority. Steems consensus is based on the Last Irreversible Block (LIB), which is the block which has at least 2/3 (66%) of the Witnesses behind it. When an overtaking happens, the Steem community can re-elect witnesses and correct the situation.

Round-robin consensus

The consensus (what the state of the actual chain is) is done by a giant ferris-wheel 🎡. The number of wagons is fixed at 21, but the persons sitting in the wagons can change at any time 👥 (which is good, imagine we could kick out malicious politicians 🤩). Each round one of the 21 Witnesses adds a block to the chain. One round is 3 ~seconds ⏱, which is determined by network-broadcast effects like delay.

After a block is added, the other witnesses will confirm the block and the consensus or the "valid chain" is determined by the Last Irreversible Block (LIB), which like mentioned before, is the block which has at least 2/3 (66%) of the Witnesses behind it. So Steem can self-heal.

Point 3: democracy vs. capitalism vs. plutocracy

[know your meme - political compass]

Now the problem with dPOS is, that voting is not democratic like in >>one person = one vote<<. But anyways, democracies are highly flawed:

• people don´t care
• people are not well informed
• effectively --> many people will not vote

there are expert-systems (collusion resistant games) like free-markets or futarchy and I am sure, that we will see such governance models for >>REAL<< DAOs on Ethereum 2.0. And of course: I would love to see Steem become such a bad-ass ****** DAO before anything else...

...but for now, Steem is token-stake based voting. The difference between stake and a token-stack can be measured by skin-in-the-game. Whether you like it or not: ninja-mined stake is no stake at all. Yes, @ned and @dan payed for the amazon-servers to mine their tokens, but it is not comparable to the average stakeholder, who bought the tokens as an investor.

"Sun bought his tokens"

This is why you should resolve this problem as quick as possible. Yes, @justinsun bought steemit.Inc but still it is ninja-mined stake which is no stake at all. Yes, cutting his stake out violates fungibility (= one coin looks like the other) of crypto tokens, sure but crypto never was fungible. We will come to a point, where Silk-Road Bitcoins will become a problem, no body will take them, same goes for ninja-mined token.

Betting 💰 > Voting 🤏

This is the difference between plutocracy and a betting market. A plutocratic system is voting. Voting is bad. Voting means nothing-at-stake. As a plutocrat, you use your money. Betting on the other hand means that you can lose your money, you risk it. You have skin-in-the-game 🙌.

A lord Rothschild does not need to risk his money, he can go to a person and tell them what he wants! 🗣 👤Just having the money is sufficient for him to have authority. This is BS. Nobody needs plutocrats.

• democracy = majority decides (not expertise, no skin in the game = voting)
• capitalism = experts decide (if somebody is no expert the market will take care for him = betting)
• plutocracy = the same idiots on every single decision (voting)
• academia (can be experts, intellectual yet idiots, cant make decisions)

Most parts in our world are not really capitalistic, they are plutocratic which is not the same. Yes, capitalism lends it self to plutocracy. In real life capitalists can become monarchs 👑. The fabric owner becomes more and more wealthy (which is fine), and then he buys his own private army, then he corrupts every aspect of public life, then its not a free market anymore. See Rockefeller. BUT in crypto-land there is a solution >>Collusion resistant games<< 🙌.

[in ideal free markets after n-rounds only good decision makers will survive - natural selection --> evolution. But of course for ecologic questions often there is no trial and error. You can figure out corona, or climate change by letting every body do WHAT EVER they can afford]

But hey, this is the optimal use-case for smart-contracts and collusion resistant games

but basically a free market enforced by smart contracts/encryption based consensus mechanisms aka. "crypto" is all you need. We havent realised it, but Steem is a sandbox, a playground which will give birth to a whole new paradigm. No left, no right wing, no more populism, just right decisions over time.

example climate change

free market does not mean that industry and car-manufacturers bring their "solutions" and that´s it (we all know this is what will happen anyways). Free market is, that a company or politician has a proposal, he/she puts money on this proposal - all people who think that the proposal will >>measurable<< down regulate average sea surface temperature (whether this is possible or not is not the question), also put money on the proposal --> it hits a threshold --> gets executed and now it has to deliver! If temperature still goes up (like it was the case with our green politics) they get liquidated - out - next.

This is what free market means. It is voluntarism, you don´t have to make any proposal and you dont have to vote on any if you don´t think you are an expert in this particular field. This is fine - best way to lose none of your tokens, but when your are highly confident, then you can win big - everybody can win because if you are right something beneficial for the whole system will happen.

for those of you, who don´t know the futarchy concept:

communicate, I think Mr. Sun will understand.

Sources

Hanson, Robin. 2013: Shall We Vote on Values, But Bet on Beliefs?

Buterin, Vitalik 2014: An Introduction to Futarchy

Merkle, Ralph, C. (Nick Bostrom, Vitalik Buterin, Robert A. Freitas Jr., Robin Hanson, Charles Hoskinson , John Oh, and Melanie Swann) 2016 DAOs, Democracy and Governance

Further Papers:

Hayes, Ryan, Tran, Alexandra, Xu, Henry. 2018: Futarchy Considered: a guide to blockchain-based prediction markets
and futarchy

Video/ public Talks and Discussions:

Re:publica 2017 BLOCKCHANGE – HOW SCIENCE REVOLUTIONIZES DEMOCRACY, WORK AND NATURE USING BLOCKCHAIN

Merkle, Ralph, C. 2017: “DAO Democracy” Seminar

Whinfrey, Chris. 2018 :Possible Futarchy Setups

Chris Whinfrey (LevelK) 2018: DAPPCON 2018: Futarchy Curated Registries

btw. how do you like the communities feature? I have still not figured it out :-/