Written by Malik Corbett
As the proverbial saying goes, “life is a game” and to be successful at any game requires one’s skills to be expressed in creative ways that will achieve victory. This is true with physical games such as basketball, football and mixed martial arts. But it is also true in mental games like Chess or more serious games like politics and finance. That is why I was very intrigued by a Medium blog post written by Block.one CTO/co-founder, Dan Larimer, were he proposed that people should be selected for blockchain governance by a meritocratic process where the best of the best people are selected by their achievement within competitive online games that displays their skills:
“What if we could select for the best and brightest among us without biasing toward those adept at manipulating others? I believe the solution is to have a large number of competitive games that require a vast range of skills and/or genetic predisposition. Today we have one competitive game, winning votes by hook or by crook. But what if we had other games with objective winners such as the Olympics, Chess, Typing Speed, Poker, Star Craft, race car driving, memorization, spelling bee, etc. What if some of the metrics were the “largest land holder”, the “largest single gold holder”, etc. We could even host a provably honest lottery to select some people at random.” ~ Dan Larimer
On the surface, the idea may seem like “pie in the sky” thinking. However, I truly believe that Dan Larimer is on to something, and he is in the unique position to have a capable blockchain infrastructure to experiment in real time with his ideas.
“Blockchains based upon any single proof-of-x metric will become centralized even if those in power spread propaganda about how decentralized the system is. It is important that we maintain the ability to discern the illusion of decentralization from real decentralization.” ~ Dan Larimer
Dan is clearly acknowledging a flaw in current blockchain governance: that in any system with a single rule for determining who produces the next block, be it hashrate or number of votes, that the distribution of block producers will become centralized over time . This is true in DPoS, PoS or PoW based networks; centralization is a major concern that I don’t believe any one type of system has been able to solve yet. Yes, I believe that PoS and especially DPoS blockchain systems represent the best path forward but it is not without weaknesses especially in governance.
The flaw in a PoW network is that power is given to those that have access to the cheapest power around the world. Those who are lucky enough to live in those geographic locations or can afford to move their mining operations to those locations are at an extreme advantage. However, DPoS is not without its own flaws and a good example of DPoS gone wrong can be found in the blockchain cryptonetwork known as STEEM.
First of all, STEEM was created by Dan Larimer before leaving to work EOS project. From a technological standpoint STEEM was ahead of its time and is the precursor to EOS. However, the social media blockchain fell apart due the “circle jerk” game of acquiring votes by any means necessary. No longer were content providers being rewarded for great content, instead it turned into a game based on how one could manipulate the system with bots or purchase votes to “game” the system to earn more tokens. Now, STEEM which was once a promising blockchain is now a wasteland of spam.
I believe that Dan’s recent post of Decentralized Governance is an acknowledgment that EOS is susceptible to the same issues that caused STEEM’s downfall. We are beginning to see some of these types of manipulation in EOS today, as some Block Producers are being supported by institutions who have position themselves in first movers advantage and has used millions of dollars worth of EOS to vote for BPs; ensuring that these companies are in the top 21 block producers for a share of the revenue. These types of nefarious games poses an existential threat to EOS.
True decentralization is extremely hard to achieve, that is why Dan Larimer’s idea that people should be selected for governance positions via a large number of competitive games that require a plethora of skills is an interesting idea. Now someone may be reading this and thinking this is “hogwash” just like I did when I first read the post. But before you dismiss this idea as bullshit, let’s take a look at a EOS DApp named Prospectors which at the time of this post ranked 4th overall in usage for the last 24hrs.
Prospector is a Massive Multiplayer Online Real-Time Economic Strategy Game hosted on the EOS main-net. The game takes place in the 19th century Gold Rush and players can earn crypto “gold” called PGL (sub-token of EOS) and start a virtual business. The game has various ways to earn PGL which can be converted into EOS. The game is limited only by very loose rules and the players creativity or lack thereof. The top earners of this game implement monetary policies and economic techniques to earn cryptocurrency. The game is very complex and requires players to think hard about their next move if they truly want to be successful. Players that have a deep understanding of economic concepts, finance and game theory have an advantage over others who don’t. Having an understanding of economic concepts and monetary theory as well as having knowledge of market microstructure is a valuable tool that could benefit the governing of a blockchain.
As I mentioned in previous Mining Bytes, blockchain governance is important because it determines how cryptonetworks handle many issues. These include technical upgrades of the system such as forks, who gets to run the validator nodes (block producers) and how are monies allocated on development projects. In fact, block producers whether in a PoW, PoS or DPoS based networks can be viewed as the network’s central bank. To that end, how decisions are made has a direct impact on the growth of the network and ultimately the value of the native token and sub-tokens.