Mining Is Coming Back To Steem (Only For Account Creation, Though) - HardFork 0.20.0 Hidden Gems
One of the biggest problems of Steem, as a startup, is scalability. Not only from a hardware point of view, but also from a user acquisition point of view. That's probably why the next hardfork, 0.20.0, is codenamed "velocity", to increase the growth speed.
Discounted User Creation
As of now, if you want to create a new account on the Steem blockchain, you have to pay a fee. The fee is set up by witnesses and currently is at around $1. So it should be the "blockchain" which pays that fee, but the workaround in place now is the Steem Power delegation operation. If you want to create a new account, you delegate some Steem Power to that account, in order for it to have a bit of a "flesh". And then you can get it back.
But if Steem wants to scale to hundreds of millions of users, like Reddit, this approach is not feasible. It's simple mathematics. Even with the current 9.5% yearly inflation, the blockchain will run out of Steem pretty quick. As a side note, I've been asking about this since a year ago, back when I was still hanging around on the Steemit chat daily. As you can expect, I was laughed about. When I was not discounted as being plain dumb and not knowing "how things work". But that's another story.
Back to our next hardfork.
In the Velocity hardfork, we will be able to create accounts with an alternative method, called "discounted account creation". Each day there will be an allocated quota of accounts that can be created and people will be able to do that if they mine.
Right. By mining.
Early Days Steem Mining
In the very early days of Steem, there was a mining option, until the mining queue was hijacked by the (in)famous "rabbits" (or accounts that had the word "rabbit" in them, followed by a number, probably all managed by a single person). There was probably a bug in the implementation of the mining algorithm or those persons had a lot of hash power, fact is that mining soon became a non-option for many people, because only 1 or 2 persons were able to compete for the mining queue.
In an attempt to solve this situation, Steemit INC made another try, this time with equihash as a PoW algorithm (the same one used in ZCash) but it didn't work as planned and mining was abandoned entirely. The quota that mining had for block production was very low anyway: about 5% of the total of the blocks produced was allocated to mining, the rest being produced as it is right now, by witnesses.
What To Expect
So, with Velocity we will be able to create accounts by "mining" them. Quoting from the official @steemitblog announcement of the Velocity hardfork:
Mining will use Litecoin's scrypt algorithm as it is battle tested. This will only be used for creating accounts through the discount system and not for block production.
I still don't know how the UI will look for this, or if there is going to be a UI for it. But things are moving in this direction fast, according to these issues seen on Github less than a day ago:
I can see a few caveats coming up:
- accounts can (and probably will) be created as assets and then resold for a profit (I'm neutral on that, it's already happening)
- depending on the implementation, account creation by mining can add a layer of privacy to the accounts created (this could be a good thing)
- number of accounts will grow very fast (witnesses will probably allow a bigger quota in the beginning) and that may create some "learning curve" bottlenecks (we saw the amount of "spam users" increasing every time we opened the gates more).
Thoughts?
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):
How well will this solution scale? It sounds like miners will still want to be paid for the accounts they create and that the total number of mined accounts will be limited.
If Steem gets some big exposure and a huge number of new people want to sign up how will that work?
It's a workaround, not a fully working solution and it's relatively hard to model this (i.e. how much hashing power will generate how many accounts, etc). But it's a step forward. Right now the number of daily accounts created / approved is around 2-3,000. If mining will allow another 2-3,000 then the adoption rate will double.
I remember I had a few discussions on the Steemit.chat last year and this mining solution didn't even appear, so it's something relatively new.
If you have other ideas or feedback, would love to discuss it.
That makes sense, i'll have to read the HF 20 / velocity proposal again to make sure I understand it.
The more I think about it though maybe having it be harder to get an account is a good thing. I think the fact that Facebook was a closed service initially (you had to have an email address from an approved college to join) helped it to take off like it did.
I was in college in the Boston area when Facebook first came out of Harvard and it was a big deal when our school got added and we were able to join. Scarcity creates value and the same could potentially be applied to Steem accounts.
If Steem does have a spike in popularity and accounts are hard to come by it could actually create even more buzz and demand to get in. Of course I imagine in the future we'll have to deal with people creating and selling high reputation accounts, but that's a different story.
A lot to think about here! It makes you realize how very very new Steem still is and how much it still has left to grow. Hopefully it will take the STEEM token price with it :-)
I confess that I don't understand the two quotes that you've posted above. It must be a dev talk thingy :)
I remember the option of mining the account into the being. Is this still possible? Probably not because mining as such does not exist any longer ...
Thanks for bringing up these questions. It is important that at least somebody is stirring up the scene. We need you and people like you :)
Ps: isn't it interesting - the usage of we as in mine we need and your we opened. I am afraid that this is still Steemit Inc's playground ...
Since mining is not allowed in this current version of steemd, mining an account is not possible now. Starting with 0.20.0 it should be possible but I don't know if it would be used like the initial setup (that I know too, very well) or it would be different. From what I saw on GitHub seems like mining will produce some tokens (different from STEEM) that would be "good" only for account creation. In this scenario, the token holder must exist, so an account can't be "mined into existence".
I'll keep an eye on the GitHub and let you know.
Thanks for an eye.
This scenario could possibly spawn account creation factories and payable services ...
@dragosroua I always learn things I did not know about STEEMIT when you do these posts. Thank You for helping the Old Guy Learn more..
My pleasure :)
Wow! what a good explanation, it means that this new change can benefit relatively new users who find it hard to reach the hot list. I guess I got to update myself with the issue of mining. I'm going to look at your witnesses blog (because I still do not understand much about that and because they ask so much). Thanks for your time and your very nutritious post
oh man this is super awesome, means i can keep my steem power instead of using that to make the accounts. even if i only got a few a day and set them up for the content creators that's better than nothing. totally up for mining! :) time to break out that litecoin box! :)
Yeap, it's a good move, overall.
Laziness? ;)
Will check out your related post on Steem mining. Learnt something new today. Thanks!
My big issue is the spam one that you mentioned last. Seems like the mining is going to create these discount tokens and there will be a finite supply at any given time, but if enough single users spam the account creation, it's just going to cause headaches like the ones we've seen. On the bright side, they won't be able to accomplish anything with the accounts since they'll have practically 0 Steem attached to them. Still, it doesn't resolve the bottlenecking that people have been complaining about non-stop in #help.
Why not an ASIC resistant algo? Couldn't using a script that is susceptible to hash power aggregation this lead to centralization?
Have no idea what led to this choice.
So every user will have to mine their own account or will there be a posibility to do the mining for others?
As far as I understand it, you can mine an account for somebody else. The payment will be done with a specific type of token, different from Steem and that token should belong to somebody.
In the early days, you could mine your account by editing the config file of your steemd instance, and setting the name of the miner with your desired username but you had to previously verify if that username is not taken on the Steem blockchain. I don't know if this will be available in the new implementation, but I'll keep you posted.
It seems a bit complicated at the moment, I'm curious to see how it would work.
Excellent post, it's nice to hear that steemit team is working on to overcome the scalability problem and it's essential for the growth of any platform and it's also great that upcoming hard-fork 0.20.0 will enables the easy sign ups. thanks for sharing very nice information with us, Stay awesome.