What Is A Shitcoin?

in OCD2 months ago (edited)

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Someone in a Twitter conversation yesterday defined shitcoin roughly as follows:

A shitcoin is a coin that has a small group of individuals in charge of consensus and who can change it at will like a board of directors at a central bank.

Think about that for a moment.

STEEM meets that definition shitcoin 100% being controlled by a single central entity. Does HIVE? At present, I'm afraid it does, technically speaking. But the saving grace is that the stake distribution is constantly improving. It has come a very long way from the early days of Steem.

Sufficiently decentralized stake distribution is vital because of network security. Nobody's funds are safe invested in a centralized shitcoin. It is very important for everyone to realize this.

One of the main weaknesses of Proof-of-Stake and Delegated-Proof-of-Stake consensus models is that current stakeholders' stakes increase through staking rewards completely passively while every new stakeholder must grow their stake by buying in. Validating transactions is very cheap once an initial investment has been made. Delegated-Proof-of-Stake is even worse in this regard because transaction validators (witnesses) get paid large witness rewards (as they should so as to make bribing them expensive) whereas other stakeholders get paid much less. What this results in is the concentration of stake into the hands of current witnesses even more firmly as they as large stakeholders have the most power over the election of witnesses. In contrast, under Proof-of-Work miners have to bear a large cost for transaction validation forcing them to sell to stay financially afloat and thus preventing power over network security rapidly concentrating into their hands.

The only mitigating factor that can make Delegated-Proof-of-Stake secure is additional inflation allocated to users other than witnesses. On Hive, 65% of the total inflation is allocated to content creators and curators. That part of the total inflation has value beyond the value of the content and curation thereof it is paid in exchange for. That value is in increased security of consensus and resilience in the face of attacks.

If all of the inflation went to Hive Power holders and Witnesses in the same relative proportion, it wouldn't take long for power over consensus to consolidate firmly into the hands of a small group of people. This would be a hazard to even their own financial security. No one who understands how distributed consensus works would see such a coin as worthy of long-term investment.

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But the saving grace is that the stake distribution is constantly improving.

That is purely conjecture, you cannot know this, not with anonymous accounts.
There is no reason to assume this. 'To assume is to make an ass out of me and you'...etc. (trust?lol)

That is purely conjecture, you cannot know this, not with anonymous accounts.

Most authors' accounts are pseudonymous, not anonymous. They have clear and distinct identities, just not under their official names.

Diversifying your posting activities over many accounts is financially punishing. You will lose out on auto-votes, your alts don't typically have as many followers as you do, nor do they have a standing in the community like you have if you've been posting for years.

There is no reason to assume this.

I think it's a very reasonable assumption because there are thousands of accounts posting very diverse content on a daily basis and earning author rewards. All of those accounts earn curation rewards as well. Do you really believe the small number of whales or orcas on Hive have time to post thousands of posts on a daily basis?

I know I that could employ 50 people to make 10 posts each per day...(that's around 10% of posts from my guestimations)...

We are talking about something of value (hive) exceeding 70 million dollars .... how many would you employ , to keep the illusion going?
50 x $100 a day = $5,000 = $35,000 per week = $1,7 million a year (ish).

Do you really believe the small number of whales or orcas on Hive have time to post thousands of posts on a daily basis

I'm NOT saying this is the case, but I think that you underestimate what is possible, if there is a will to do it.
I know of an operation involving over 100 employed people - on much less than $100 per day- offering illusions...

If that is beyond what you can imagine happening - then I'd suggest that there's a large element of naivety at play. (no offence intended).

I know I that could employ 50 people to make 10 posts each per day...(that's around 10% of posts from my guestimations)...

If that is beyond what you can imagine happening - then I'd suggest that there's a large element of naivety at play. (no offence intended).

I can imagine all sorts of things based on paranoia and suspicion (no offence intended) but I tend to not take most of what I can imagine seriously at least before I've applied critical reasoning to what I have imagined.

To say that there are many hundreds people, probably more, because almost nobody posts 10 times a day of, whose accounts are fake in the sense that their master keys are owned by large stakeholders and that they receive pay for their content creation off chain while that which they accumulate in their accounts will eventually be added to the stake fully controlled by their employers, is, shall we say, very unlikely. This is the very first time anyone ever mentions such a conspiracy theory. I haven't heard of anyone being accosted with the attention of hiring them to become sock puppet content creators with credible identities.

It's a silly idea. It's a lot simpler to just buy more HIVE and power it up outright.

This is the very first time anyone ever mentions such a conspiracy theory.

Nope, and I'm not - as i say - saying it is.

I AM saying that for the money involved, making the infrastructure to create such a thing is not very difficult.
That's not a theory, that's from seeing people actually do it in real life. (not crypto, but same model)

It's a silly idea.

Not according to several multi millionaries I know, who've used this model.

Not according to several multi millionaries I know, who've used this model.

Not in crypto, as you said yourself. Paid shills are nothing new. They are bought for the attention. Attention on Hive does not have that kind of value. A Cybil attact can be much more straightforwardly done by buying stake and having it on numerous separate anonymous accounts. The scenerio you're talking about is too elaborate for a Cybil attack. It makes no sense.

The scenario mentioned has nothing to do with a cybil attacks, but token values.

How?

This is not a "new conspiracy theory" - it was widely discussed on Steemit for years and was the main reason many of my friends quit and why they now don't use Hive either.

There are obviously accounts with large numbers of alt accounts - most people involved in doing conspiracy posts had several because of all the flagging and downvoting - hell, I had 10 accounts myself (and still do) but some big account holders have hundreds. People who have researched this have fully confirmed this to be the case.

But what is not so widely known is that there are single accounts whose posts are being authored by multiple different people. Since the hardfork I've been fully committed to Hive and have stopped going on about this online, but yeah, I'm aware that some very prolific accounts are not what they seem.

It is not a "silly idea" but a std social media tactic.

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I know there are some people who have very large numbers of alt accounts. And it's perfectly fine for people to be prolific and use multiple accounts. The stake distribution would still improve as time goes by compared to a situation where the content reward pool did not exist.

They other key thing is that as @lucylin says, some accounts are using contractors to write their comments. In some cases the consistency is poor and people who have obsessively studied this in detail have found dozens of examples where they are clearly not the same person. And this is on some big name accounts.

I'm sure something like that has happened. But the existence of the content reward pool is still much better for the stake distribution than the lack of one.

Fair point - the distribution got more centralised last month btw... only slightly.

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This is why removing the content reward pool would be courting with distaster.

Yes I can't see why anyone would want to make this place just like any other blockchain!

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