The Steem saga is really a battle over how to decentralize

The Steem network voted hard fork yesterday in retaliation against users who set up a competing network, Hive. Crypto commentators with seemingly no interest in the outcome grabbed the popcorn and typed hot takes on Twitter.

But the Steem / Hive cleanup poses a bigger question for crypto advocates: Should all blockchain networks be fully decentralized? Or is some centralization allowed, provided that people have decentralized alternatives?

A short summary: Steem network users voted for a hard fork that took away about $ 5 million in money from users who forked Steem earlier this year to create a competitive blockchain, Hive, after Justin Sun claimed control of the Steemit social network and the Steem blockchain platform.

The Hive movement allowed most Steem users to receive an equal amount on the new blockchain, but not Sun. They would make him king, but his new island would become worthless without inhabitants. The new Hive users are now in control of a network of tokens worth more then Steem, also kept their STEEM tokens.

That didn’t go well with Sun, who used his influence to vote for the hard fork. And what an impact he had: The Steem Network uses Delegated Proof of Stake where “witnesses” – trusted users the community votes for – can upgrade the network. The users with the most tokens get more votes, which means that a few big holders like Sun have too much power to determine who becomes a witness.

Whenever the users of a blockchain network banish or expel other users, you have to wonder if it is ripe for the same abuses of a centrally managed system. After all, Twitter also bans users.

Adam Back pointed out multiple problems with Steem’s setup Decrypt. It is curious that the Delegated Betting Mechanism makes PoS vulnerable to centralized abuse of votes when voting against users ‘interests and wishes, which seemed to be causing the problem when Tron took over a’ decentralized ‘system,’ said Blockstream’s cypherpunk CEO. .

He added that it was “unclear how something can be obtained if it was really decentralized”.

In this view, Steem’s mechanism ensures creeping centralization – but it also allows people to leave. The observed centralized abuses referred to led to the first Steem fork Hive created. Free from Sun, users’ thinking went away, we have the network we want. Now Sun and others have lost Steem from Hive leaders to get the network she want.

Nick Szabo, who, like Back and any other crypto OG, the theory that it is Bitcoin inventor Satoshi Nakamoto, has retweeted a warning about hard forks while suggesting that Bitcoin (which uses proof of work) was superior because it mitigated against this kind of on-chain- drama:

But if you retreat and look at the Steem network as part of a larger ecosystem, rather than a standalone platform, the view changes. People can switch between proof of work, proof of stake and even legacy systems depending on their needs.

Jameson Lopp, Casa’s Bitcoin security guru and CTO, implied that while Steem uses delegated proof of stake adding a mechanism of governance, the result of the larger crypto ecosystem is consistent with a capitalist model:

What ever happened could happen again, this time with another crypto billionaire bursting in to turn HIVE’s social network into their personal PR echo chamber.

And that’s fine. As Amber Baldet noted at Consensus, circulating earlier this month: ‘Decentralization isn’t just’ oh, we’ve all my protocol, “but it’s more about having all these different choices.”

So feel free to choose a network that may one day confiscate your tokens. Or maybe just buy some Bitcoin.

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