What do the “experts” say when asked,

“What is holding crypto back? Why aren't we seeing mainstream adoption?”

Some say it's too slow. Some say it isn't secure/easy enough to use. Some say it's too volatile. Some say the space is simply too underdeveloped and we'll just have to wait. Some say the establishment won't let it happen.

To an extent, all of these are valid reasons, but they all stem from the same fundamental problem:

Lack of decentralized leadership and organization is the number one ultimate hindrance to the mainstream adoption of crypto.

Leadership is simple in the corporate (centralized) setting. This is likely why we don't see a problem in the cryptosphere. This is another example of the fallacy of projection and the Halo Effect.

You have a boss. You do what the boss says or they'll replace you with someone who will. The boss has a boss, and the boss's boss has a boss, and so on and so on until you reach the top of the pyramid. It's easy to see how organization and leadership are trivial when using this model: Do what you're told or you're fired.

So why isn't this model the be-all end-all solution to all our problems? Nepotism and greed. The people in charge have friends. They give their friends high ranking positions that they didn't earn, even when there is clearly a better match for the job. Sometimes, an employee gets a promotion simply because they, “Paid their dues.” Their time spent with the company means more than their actual qualifications.

Greed and scarcity ensure that most try to get the highest paying job possible. All of these factors produce corporations full of inept circle-jerking douchebags. How many of us have had a boss that obviously didn't deserve to be in that position? Pretty much everyone.

This concept extends to high paying what-do-you-want-to-be-when-you-grow-up jobs like doctor and lawyer as well. The space becomes flooded with people who shouldn't be there, but are, simply because they followed the money and the social pressure that comes with making that decision.

We do not think in terms of cooperation and abundance. We've lived a lifetime in the shadow of competition and artificial scarcity. This is why crypto is having such a hard time becoming mainstream. Our brains are not even wired properly to understand what needs to be done.

The lack of organization in the cryptoshere is blatantly self-evident. A team of 50 people is considered large and a team of 100 is considered massive. Meanwhile, we make claims that there are a quarter of a million programmers working on top of the Ethereum platform. There very well may be, but they certainly aren't working together as a team; that's for damn sure.

How many people does it take to make a video game? How many people does it take to make a movie? Have you seen the credits at the end these days? These projects are massive and require strong leadership and organization; something the cryptosphere sorely lacks.

If we had organization, development would increase 1000 fold. All of these problems the “experts” insist are holding us back would no longer exist. Crypto would be fast, easy, secure, robust, stable, and unstoppable. Instead what we have is a quarter million developers running around like chickens with their heads cut off.

As I was pondering this precarious predicament, obviously I wondered how we all can come to consensus over a solution. How do we decide who is in charge in a decentralized setting? What is it based on? The answer is simple whereas the solution is incredibly complex and open to debate: Decentralized Reputation Systems.

More than anything else, a legitimate reputation system is what the entire cryptosphere needs as a whole. Say a programmer wants to be a part of the sphere but they don't know where to start and who to follow. Wouldn't it be nice if there was a reputation system that could point these newbies in the right direction? Say and artist wanted to hook up with other artists that promote each other. Say someone wants to find good content on Steem. Say another blockchain wants to know who to airdrop and how much. Say anything! A valid reputation structure with robust features can connect anyone for anything. This connection will immediately begin with a level of trust higher than zero (or less if there is some advantage to taking that risk).

There's no point in reinventing the wheel, so I decided to do some research on the subject. What kind of decentralized reputation systems do we have in place already? Clearly, Steem's is near worthless because you can basically purchase reputation very cheaply, especially when you consider that most bloggers aren't paying for the reputation, but to get exposure on the trending tab. This renders Steem reputation basically free to buy if you were going to rent time on the trending tab anyway.

Then I realized I should be looking all the way back to what gave cryptocurrency a notorious reputation to begin with: Silk Road.

The Silk Road drug ring may have been shut down several times so far, but it can't be stopped. It's a decentralized movement, and someone will always be willing to take on the risk and pick up where the last Dread Pirate Roberts left off.

I figured if anyone had an amazing decentralized reputation system in place it must be these guys. These drug/arms dealers are risking their life and liberty trafficking this stuff through the dark web. Their systems must be amazing at keeping 'criminals' out of prison. The following is a summary of a little research I did on the topic.

https://pdfs.semanticscholar.org/8a51/6b19f61ef492aea7f3da6f70c5cd21fbced4.pdf

Feedback on Silk Road consisted of three fields—a rating, a textual description of the feedback, and the age of the feedback.

It failed when vendors—aided by the site’s robust anonymity protections—made purchases from themselves and left themselves positive feedback. Reputation mechanisms are weak governance structures, precisely because they are easily gamed.

Although the site’s anonymity protections undermined every aspect of DPR’s rules, the first important change to Silk Road’s policies concerned the inadequacy of the reputation system as a source of social control. Just 5 months into the operation of the site, DPR realized that he was unable to deter a vendor who threatened to send carcinogenic and poisonous substances. Neither the feedback mechanism nor pulling down his account made a difference; the vendor would just, “Create a new account as soon as they got bad feedback.”

When he reopened new seller registration, he found a suitably agorist solution: He made new accounts scarce by auctioning them off, hoping that this would deter recalcitrant users from opening one new account after another. Yet the question arose of whether Silk Road was the adherent organization that DPR had imagined, where the rules were indeed self-enforcing.

Skills in concealment were essential to the reputation of a vendor—“Excellent stealth!” “Packaging/ stealth was dead on 5/5 ACCC”—and those who possessed the necessary stealth were rewarded with increased business.

I also skimmed https://arxiv.org/pdf/1703.01937.pdf and http://nautil.us/issue/55/trust/how-darknet-sellers-build-trust but learned nothing of value.

So, what did I learn?

The reputation system for Silk Road is actually quite rudimentary. It's not innovative at all and it gets gamed with the exact same tactics that that Amazon reputation gets gamed (I recently listed to a podcast that explained this in detail).

The Dread Pirate Roberts auctioned off new accounts so that bad actors would stop making them for free. That was interesting, because that's exactly what HF20 is going to do (minus the auction). However, the tactic of buying a product from yourself to leave a 5/5 review still works. You can see this at Amazon as well. A garbage product might have have 100 five star reviews and 100 one star reviews. As you begin to actually read the reviews it becomes obvious that the five stars are paid for and the one stars are legit.

The biggest thing I learned is that we can do better. How is Vendor reputation different from Steem reputation? There are actually massive differences. Vendors have a lot of clients. The ratio of Sellers to Buyers is quite low. For every one Seller there will be many Buyers. This is bad for any kind of underlying reputation system (and bad for free-market in general).

In an ideal free market everyone is a producer and everyone is a consumer. Steem is closer to this ideal because it's based on social media. We can all create content here and pay each other for the work. We all have a brain, all we need to do is prove it. With respect to a reputation model this makes our potential much greater than that of a store selling physical goods.

Accountability

Thank about it: what if I told the Steem community that you had a good reputation but you turned out to be a scammer. In the world of buyers/sellers the person who gave the seller a good review does not get punished, but here the good review I gave out is going to come back to haunt me.

The person that got scammed is going to go on a rampage. They'll slam the reputation of the scammer and they'll slam the reputation of every other person they believe provided a false review on that person. Or perhaps they'll demand that I remove my positive review (or face the consequences). In my system, people will be allowed to do whatever they want. This is the nature of decentralization (zero regulation; self regulation). If this person ends up becoming more trustworthy in the community than I am, I'm going to be shit out of luck. No one will trust what I have to say because the chickens have come home to roost.

Using these principals, we can see that a free-market reputation system is outright superior to a scarce-market one. We can all be responsible for pointing out the users who we think are doing a good job and who we think are the trolls. More importantly, if we lie it will damage our own reputations; a mechanic that doesn't even exist in the vendor/consumer sector, because consumers are not vendors and they don't even have a reputation to begin with.

Airdrops

Remember what a disaster the Byteball airdrop was? The scammers came out of the darkness and gamed that system into the dirt. It was disgusting. That will not happen with my reputation system. It will be much easier to tell who is on the up and up. When it comes down to it, you want to airdrop people who are going to HODL, be part of the community, and not scam others. I believe that the heuristics I create will be 1000 times better at identifying people like this than any other system currently in place.

Decentralization

Providing airdrops is a great way to increase decentralization, but we have our own decentralized mechanic right here at Steem that's been poured into the very foundation of the platform: upvotes. Upvotes are essentially intelligent mini-airdrops.

Reputation = $$$

There's a reason why vendors on Amazon pay reviewers to bump them up the list. The money they put in is far less than the return they get out. It's an investment, albeit a quite shady one. The harder the system is to game, the more valuable the reputation. It stands to reason that a well organized decentralized reputation system would be extremely hard to game (basically impossible) because you'll never be able to convince the entire community (consensus) that you're trustworthy when you really aren't.

This means that we can leverage my reputation system to further decentralize Steem (and any other blockchain that wants to clone the system). The best way to decentralize is for whales to give away their money to people who have the best intents for the platform. However, whales are currently afraid (or just too greedy) to do this. How do they know for sure a user is trustworthy? How can they trust that their investment will yield returns?

Well, again, the answer is this reputation system. If whales are allowed to trade Steem for reputation they will do it if the reputation has value. If the system is good enough the rules of Steem will bend around the reputation system. Whales with bad reputation will slowly have their power taken away in one form or another.

I realize now that my idea for a Steemit Virtual Government was extremely lacking. The thing that it lacked was this system of reputation... and perhaps this system overshadows and outdates many of the concepts I brought up 8 months ago. I've had a lot of bad ideas because I didn't fully know how Steem worked (impossible to ban bots, vote buying, etc), but I'm finally starting to understand what this site needs.

This post is already approaching TLDR status, so I'll leave the details of my system for another time. Rest assured, I've already flushed out a lot of the details and it looks like it's going to be pretty amazing. @steem-ua doesn't stand a chance. This isn't something that can be done with an algorithm. The entire network needs to be involved. Our combined brain power is much more powerful than any Podunk AI. There are no shortages of brains here looking to get paid. Steemians are an embarrassingly undervalued resource right now.

Promise to the people

I will prove time and time again that I am beyond reproach and that money cannot corrupt me. I will prove that I am a philosopher king; that I deserve the responsibility of having money because I can spend it with restraint; that I can claim a leadership role in the areas I see fit and everyone will benefit.

These invisible chains are holding everyone back; even the people at the top of the pyramid. I don't want a pyramid; I want a spaceship. I want to empower the entire world. Human slaves have become outdated; let the machines do all the heavy lifting.

Energy is infinite and E=MC².
Power to the people.

Return from Silk Road Dark Web: Trusting Anonymous Sources With Decentralized Reputation to edicted's Web3 Blog