Self-Defeating Ideology
A self-refuting idea or self-defeating idea is an idea or statement whose falsehood is a logical consequence of the act or situation of holding them to be true.
Child of Paradox and Oxymoron
Because crypto is such a new and largely undiscovered paradigm, there are a lot of bad ideas floating around out there. Which is fine... I have bad ideas all the time. The difference being that I'm constantly trying to identify them and learn from my mistakes. There are those who would hunker down and double down on the terrible idea out of pure hubris and pride. These people are not to be taken seriously. Then again, separating the chaff from the wheat is no trivial task. How can we distinguish the two? Who is honorable, and who is full of it?
Addiction into Death Spiral
One of the easiest self-defeating narratives to identify is when someone is hopelessly addicted to some kind of substance that is actively ruining their life. In the mind of the addict:
I need to do more drugs so I can feel better.
While everyone else in that person's life can see that the drug has become a bigger problem than the coping mechanism it was being used for in the first place. Classic case of "it's going to get worse before it gets better" scenario. This is why so many drug users need to experience "rock bottom" before they turn their life around (or end up dying via overdose).
While we're on this topic it looks like I haven't ingested caffeine for 8 days. That's pretty wild I thought I was on day 5 or something. Surprisingly not a terrible experience as compared to previous iterations. But now I'm off topic.
Crypto crypto crypto
The biggest self-defeating strategy in crypto is the scaling up debacle. Why do we need to scale up? Because decentralization is important. It's so important that we need lower fees and higher throughput. It's so important that we need mass adoption. It's so important we need to compete with other platforms to make sure we don't fall behind.
And then what happened?
The network scales up and it loses decentralization. Well that was the precise reason to justify scaling up in the first place. Right? "Decentralization is important?" So important that some networks decided they needed to antiquate themselves in the process. Clearly the best example of this is Ethereum, but we've yet to see that story completely unfold. Give it time. Pray for a miracle because they need one. Luckily crypto is full of miracles. After all, the creation of Bitcoin/POW itself was quite miraculous. Ethereum won't go quietly into the night that's for sure.
What about Bitcoin?
In my last post I talked about BRC-20 tokens and Ordinal NFTs on the Bitcoin blockchain. This is another case of sheer irony on top of layered self-defeat. Why is it ironic? Because the Taproot upgrade that implemented Schnorr Signatures was meant to help Bitcoin scale. It worked so well that Bitcoin now has fungible and non-fungible tokens on it and the cost of operations has skyrocketed to $30 a pop recently. So while many hoped that Taproot would keep the chain clean and elegant it's become bloated and ridiculous for the time being. Classic blunder is classic.
This situation also trickles down into the Lightning Network. Opening and closing LN channels is much more expensive now, so many are flocking to the centralized options in which a company controls the keys and let's you use the LN by proxy (like Alby). Of course @theycallmedan has been talking about this exact topic for what seems like years now. So now he gets to smugly take an I-told-you-so victory lap around the crypto race-track. Glorious. I'm here for it.
What about Hive?
On the scaling side of things Hive is doing great. Every time we make a scaling improvement we don't have to sacrifice very much decentralization (if any). We've been making very good trades in that regard. However Hive is still obviously littered with bad ideas. Many of the themes in question are recurrent and dependent on price action. I like to call these propositions...
"Bear Market Ideas"
A bear-market-idea is one that people only talk about when the price of the token is down. It's as if people think they can tame the market cycle with a good idea. Spoiler alert: you can't and good thing we never implement any of these ideas because they'd only make the problem worse.
The core premise of the vast majority of bear-market-ideas is that we need to lower the inflation rate and/or implement token burns. Of course this is ridiculous sentiment, and I have even gone to great lengths to explain why crypto inflation is the killer application. Inflation is amazing if we allocate it to the right locations. Essentially all inflation that a network allocates should generate more value than it dilutes.
So when someone has the 'brilliant' idea that we need to lower inflation: what they are actually implicitly saying is such:
This place that we are allocating inflation to has negative value.
And yet even though the person is unequivocally saying this, they will proceed to make subsequent statements that will contradict this statement. And thus we reenter the self-defeating ideology territory.
"Let's outsource the reward pool to a layer 2 token"
This statement is the premise of the entire post.
Turns out there were a bunch of other things to talk about as well.
The idea that we should get rid of the reward-pool and outsource it to some random second layer is a provably false statement. Anyone who argues otherwise is either ignorant being purposefully deceitful. I lean toward ignorant at first glance but when I see top 20 witnesses pitching the idea with blatant conflicts of interest I do start to wonder. To be fair I haven't seen the idea pitched for quite some time, so maybe I'm beating a dead horse here.
This is not my opinion
It is a provable fact that outsourcing the reward pool to the second layer is a bad idea. I bet a lot of people reading this will interpret this stance as arrogant and perhaps a bit ridiculous, and certainly I resonate with that. It certainly sounds like a subjective opinion with two sides making valid points within a political arena. Even with that in mind I still believe my assessment is 100% correct. The idea itself is an impossible paradox.
How?
Here is the argument laid out in logical form:
- We need to increase the spot price of Hive (insert bear-market idea here).
- Inflation is too high.
- Maybe we should deallocate inflation to the reward pool and outsource it.
- The new token will be our blogging token.
Okay well that has the appearance of a legitimate idea.
And yet it is not.
The idea only makes sense if we ignore everything being implied by it.
- The inflation allocated to the reward pool has negative EV.
- We should outsource that negative EV to another token and expect it to magically have a positive EV and not crash to zero.
See what I did there?
That is what I see! If the reward pool was a burden to the Hive network and you want to outsource that burden to a second layer token... then how is it going to suddenly be a boon to the new network? Make it makes sense bruv. Ah, that's right you can't because the idea completely destroys itself at ground zero takeoff immediately. OOPS!
"But what about LEO"
The last time I got into this argument the person brought up LEO as if it was some kind of logical checkmate. First of all HE tokens are very much centralized to the point of the creator of the token being able to mint coins for any reason up to the maximum cap (which always ends up being practically infinite for valid development reasons). Second LEO is not a blogging token. Bridges have been built to EVM. We now have access to a Twitter clone. Lite account development chugs along. LEO is not a valid comparison in any way, and it blows my mind that it would even be mentioned within this context.
This is why I believe it's possible that some who have espoused this idea are being deceitful. A top 20 witness that doesn't blog has a conflict of interest in that they'll still be earning their inflation. They sacrifice nothing while trying to take inflation away from others on the network; centralizing the chain to ones who already control it to a large extent.
Hm... yeah. Not a great look.
And again I'm not singling out any particular witnesses here or saying that this is a legitimate threat, only that I've been here since 2017 and I've seen it pitched more than a couple times over the years.
The point being is that either the reward pool (blogging) has negative EV and we should scrap it entirely, or it has a positive EV and we should keep it. There is no middle ground. Pitching the idea that it has negative EV and then trying to appease dissent by saying "don't worry we'll just move it to the second layer"... well it's alarming to say the least. Not even because the idea is bad and self-defeating, but because we have to hope that the people saying it are simply ignorant of what they are saying rather than being actively deceitful and trying to trick others into agreeing with them. That's exactly how propaganda works: one deceitful person tricks a thousand others into ignorantly spreading the message.
(See: Bitcoin wastes energy.)
scarcity vs abundance
As @taskmaster4450 and I are constantly pointing out: token burns and inflation reductions are rooted in scarcity and fear. This is not the mindset we need to be in to build actual value within this ecosystem. We cannot tame the market cycle with bear-market-ideas. Rule of thumb: if you wouldn't pitch the idea at all time highs then it's just as invalid at all time lows. Bear-market-ideas are fear based and will only make the problem worse. They are self-defeating and not to be taken seriously.
We need to put this into the correct context
The very concept of outsourcing the reward pool comes from the idea that the reward pool allocates inflation to bloggers. Again, this is incorrect at the core. A "comment" on Hive could be anything. There's even a place on the comment API that allows native javascript to be injected or extracted as needed.
What's needed is abundance.
If anyone thinks we are wasting money allocating inflation to bloggers... then... build something better. Stop trying to take away the inflation from comments and instead create a better system that allows users to get rewarded from comments that are not blogs. Now, obviously this is easier said than done but... nobody said abundance was easy. New paradigms are difficult to adapt to, but the evolution will be worth it.
Need Proven Templates
We've already seen this multiple times in crypto. When one protocol has success it is copied and cloned a thousand times over. From the chaos will emerge a few viable options and inevitably all the scams that are leftover will be purged by the subsequent bear market. However, without the template, everyone is flying blind. We need better templates, and that simply takes a lot of time and a bit of luck.
2018 @edicted
I'll be the first to admit when I got here in 2018 I was a total dumbass and had many many terrible ideas for this place. Let me go find the worse offender: Steemit Virtual Government: Declaration of Independence. OMFG it's so god damn cringe I can't even believe it. 4000 words of pure bullshit. I can't even read it even though I've tried to a couple of times now.
(In my defense it is dated Jan 3, 2018 which means I had only been blogging for two weeks).
First of all just the title itself implies that I don't know the difference between Steem and Steemit Incorporated. YIKES! Even worse, many of my ideas back in the day were based on ignorant concepts... like "banning bots" was possible. I didn't realize that what I was really implying is that this network needs KYC... which is obviously a shit idea and I did not have any clue what I was talking about. Fake it till you make it amirite? We all stumble into our current position one way or another.
Conclusion
Because crypto is so new and uncharted, there are a lot of bad ideas and tokenomic systems floating around out there. When a dev team doxes their entire crew on a marketing website, what do we see? Or more accurately: what DON'T we see? Where is the "economist"? Where is the "politician"? Don't self-sovereign economic systems have dire need of both politicians and economists? That's how early in the game we are, as these positions do not even exist yet. Think about it.
At the end of the day, self-defeating ideas are dead on arrival. To be honest they aren't that difficult to spot, but the FOMO/FUD cycles of crypto can blind us to the truth as we tend to act on emotion during those boom and bust cycles rather than logic and reason. As much as I'd like to be the exception I must admit that I get-got all the time. Live and learn.
Picture an apartment building. High rise. Entrances at the ground level. Tenants all have their own space. Give tenants freedom to build and renovate within reason. Some projects fail, some projects flourish. Building remains standing regardless. Some move in, some move out. Building remains standing regardless.
Take the foundation away and watch what happens.
Picture a city. Can't have subcommunities without a community. Look how many of the subcommunities on Hive struggle, or fail. There goes the neighborhood. But each time that happens the subcommunity still has the base layer holding it up; a community to fall back on. People have a place to regroup and try again. Without it, that flexibility is gone.
Using LEO as example. If it fails, all is not lost. Still plenty of opportunities for community members to fall back on and the base layer is what's holding them all up and providing that layer of protection.
Perhaps a product like Splinterlands attracts someone. They get bored, still have Hive, and from there can go explore something else. Without the base layer, you do not have streets.
How solid is Hive if every time something fails a portion of the population gets wiped out completely? They don't get wipe out because decentralized.
Can't have planets without a universe. So of course it sounds a tad bit ridiculous when one suggests removing the universe (universal solution).
Your ideas are kind of interesting but logical, so many users would not want to agree with most point, but i guess it is a thumbs up from me.
Great post by the way.
The theories which seem logical today may become absurd after few years. The crypto space revolves most of the time around FUD and FOMO. As in the early phases of its evolution, it will eliminate all the complexities and dependency on others.
The argument I have made in the past (and the only one I have heard made from any top 20 witnesses) in support of layer 2 reward pools replacing layer the 1 reward pool at some point - is not that layer 1 rewards are a fundamental problem for Hive and so should disappear - it's that part of growing Hive involves supporting specialised sub groups and communities, which is best served by having layer 2 rewards pools.
This is due to a variety of reasons, but one of the key ones to many people is that when a few people have enough L1 stake to drastically remove stake from posts via downvotes and when the rewards for every sub community come from the same pool, we end up with a situation where communities are unlikely to form on Hive if a few high value stakeholders don't like the kind of content that they do.
There are numerous large communities online who would absolutely thrive in and hugely support Hive if they ever got fully involved, but they won't get involved because they get shut down as they try to break into the layer 1 rewards pool in a meaningful way. Regardless of the specifics of the accounts and topics involved, the fact remains that the current forcing of all accounts/communities to suffer the views of other larger stakeholders who may or may not respect them is not empowering or attractive (read: results in a difficult to market system) when compared to the possibility of groups having the option to benefit from the Hive model without 'stepping on the toes' of others in the way that L2 allows. Some users may get (overly) 'protective' of L1 rewards due to their own views and/or ideologies, but such concerns become irrelevant if all rewards are paid out from L2 chains, since everyone will have a choice to be able to hold stake in differentiated sub communities as well as in the core L1 token which would now represent the overall parent technology, but the price of which would now not specifically be subject to the personal ideologies/whims/beliefs and choices of individual token holders.
It's one thing to allow anyone to own shares in an investment vehicle and real world project, but it's quite another for every single one of them to be in a position to constantly, in realtime, be able to make decisions that directly dissuade subsets of others from investing. In fact, the growth potential of the current system is hugely weakened as a result of such obvious threats being posed to any sub communities in their efforts to grow and promote themselves online without having to deal with negative PR generated through being forced to put up with the thoughts and actions of people who they never met, who are outside of their community and who may not even agree with their existence as human beings, let alone with their value systems when it comes to rewards distribution.
Optimisation of decentralisation requires, as a bare minimum, support for the right to free association. Developing a community norm which cultivates, in intelligent ways, the creation of and growth of L2 rewards pools for sub communities is a requirement for the technology to really respect freedom of association in anywhere near as complete a way as is possible/needed. The reality is that society includes a wide variety of groups who do not all agree with each other. You will hugely limit the growth of the system (massively so) if the membership and application of the network is shaped significantly by the personal tastes of the early adopters... It's akin to Facebook only allowing groups to thrive for certain topics and in alignment with the personal views of the owners.. It should be abundantly obvious that one of the unique selling points of Hive is that it offers an alternative to the authoritarian models seen used on FB - yet it cannot deliver on that promise while actually facilitating the almost guaranteed creation of the mirror image of the structure behind FB on Hive. If we don't want Hive to become Facebook 'decentralised', then empowerment of sub communities is a necessary first step.
People are free to build tokenized echo chambers. Nothing is stopping them.
Right but they don't come the same pool... do they?
Just because HiveEngine code is lazy and piggybacks off of Hive code is pretty irrelevant.
HE is one sad implementation of L2 'solutions'; a bad on at that.
But here you are implying that this is how it will always be.
You're also making assumptions like, "of course the upvotes from Hive will always be larger than L2"
while also somewhat ignoring the fact that you can get around this by weighting votes differently...
Or using multiple accounts.
Okay, and getting rid of the L1 reward pool is an obvious disempowerment.
"Better that everyone get zero Hive rewards than some people get downvoted."
What?
Hive has nothing to do with Facebook.
Hive is not a social media.
Hive is decentralized text storage at the core.
To repeat the spirit of the OP that could be pretty much anything.
The evolution of this network is going to catch a lot of people off guard.
And that evolution has nothing to do with removing one of our most valuable assets.
I'm actually shocked that this conversation even has the possibility of occurring.
Yet here we are.
I think maybe you interpreted my words differently to my intention here. I was referring to the Layer 1 rewards pool on Hive - from which most rewards come and obviously all rewards on Layer 1. Hive Engine tokens are indeed layer 2, but I am not advocating for the exclusive use of Hive Engine here. I agree that we need successful templates, I am just saying that I think it's possible to have successful sub-community templates that operate in a way that we currently recognise mostly in layer 2 systems and that ultimately this could replace the layer 1 reward pool. Essentially, I am pointing out that it is possible to overcome 'first mover advantage' in a space, even though often that doesn't happen. Just as it is technically possible for Hive's ecosystem to one day overtake Facebook, it is also possible for sub community models to become the optimal choice on Hive. In both cases there is a factor involved which is centred around habits, beliefs and attachments to 'the old way'.
No, I never previously mentioned Hive Engine in this thread - I was referring to layer 2 sub communities as a type of network/design pattern rather than to Hive Engine's implementation specifically.
That's kind of the opposite of what I'm saying. I'm saying that I suspect the most successful future model for Hive to include zero L1 votes for rewards and zero rewards pool on L1.
I think you are talking about a different idea to the ones I am focussing on, so I'm not 100% sure of your meaning here.
An intelligently designed evolutionary process is necessary to take current Layer 2 structures to a place where they can replace layer 1 rewards in a sustainable way. This requires some experimentation and focus/intent - which is a bit lacking, partially due to the current cost of developing a layer 2 projects. Upcoming layer 2 solutions from SPK and others may speed up this process.
If there were no layer 1 rewards pool then those who want to invest in the community building side of Hive will move their stake to layer 2 projects and those who want to focus more on the tech/governance and other features will likely stay more on L1 (what we are currently calling L1 and L2 probably wouldn't stay named in that way under this model). I can take your logic the other way around and ask 'If layer 1 rewards are a positive for the network then why wouldn't they be replicable on layer 2 if the challenges involved are overcome?'. Deliberately switching from Layer 1 rewards to an evolved model of layer 2 rewards would obviously yield greater upvotes on L2 in the more supported groups.
Hive began as a blockchain project with built in support for social media features that have been adjusted and re-purposed over time for other uses. Numerous Hive projects are social media oriented.
Hive is more than that at core, it is an immutable account management system too, also combined with ledger transactions and tokens etc.
Yes, it can be many things, but the topic here is a focus on layer 1 rewards which are ultimately most optimised at present to be an extended feature for social media posts - hence the curation aspect that involves discovery, ordering and distribution of content.
Yes.
I think it's clear we are viewing this idea through different lenses, with different ideas for it's implementation. I am not talking about removing any assets, simply changing the shape of one of the main ones to extend the use cases and also the appeal of the network.
Your “What about LEO?” dismissal is where your logic fails.
We need more communities like LEO. To say LEO is not a Proof of Brain reward pool because the community is doing so much more completely misses the point.
When like-minded folks are free to gather and create their own sense of value creation and then rewarding said value creation, Hive becomes more than the sum of its parts — and that should be the ultimate goal, imho.
We still need a good way to distribute L1 governance tokens such that truly decentralized censorship resistance is improved, or at least not degraded. PoB was a great way to get that ball rolling. However, it need not be the only way, and is likely not the best way moving forward, especially as ChatGPT and other LLMs make it increasingly more difficult to truly discern brain output from machine output based solely on reading and rewarding long-form text.
Long time no see, I barely have time to consume content, let alone your bibles, but when I have time I do enjoy them. Inflation is the main driver for growth, you just have to grow at a faster ratio than what you are printing, simple as.
The idea of taking away inflation rewards from posts is hilarious, because right now it is impossible for a new witness to climb the ladder. Imagine what would happen if the top20 get more Hive rewards while everyone else has to buy them... we've seen the witness voting patterns, if the top20 grow their stake at an even faster pace than the bloggers and investors, this top20 is there for life - unless a flippening of a L2, and even then.
On the other hand, I think that controlled inflation and controlled allocation can do wonders. Keep the inflation, just focus it where it helps, as you said.
That being mentioned, what do you think of the new Leo tokenomics, where inflation from bounties is no longer, and delegators are paid with leo.voter curation rewards - which are a big bag that has been stacking.