By "witnessing" blocks, Steem witnesses secure the Steem network in much the same way that the miners for most mineable coins do. They ensure only valid blocks are added to the Steem blockchain, preventing unauthorized transactions such as double-spends (the ability to "abuse" the ledger to spend coins more than once.) They are extremely important to the health of the network, and thus, the position is well compensated and difficult to acquire.
The problem I see is that the number of top witnesses who receive full block rewards is arbitrarily set at 20. This was true with 100 active accounts, and remains true today at over 500k.
This means that as the Steem network grows, it will become increasingly centralized. This may work fine today, but imagine all of Bitcoin being run from what is effectively a mere 20 mining systems? You'd only need to bribe 11 people to accomplish a 51% attack against the network and rob it of all value.
This is exactly the situation Steem occupies, perpetually. For Steem, you need bribe a mere 11 witnesses (roughly) to commandeer the value of an $812,862,036 block-chain.
I'm not implying any past, present, or future collusion or other shady behavior - the numbers simply paint an inevitable picture of eventual cooption.
The pithy rewards for back-up witnesses starting at #21 do not, in my opinion, guarantee a line of honest or hard-working candidates as they generally fail to even cover server expenses. Furthermore, since votes are stake-weighted, you may only need to bribe a few large stakeholders to institute any witnesses you like.
We will eventually get exactly the same corruption seen in the above chart, simply by continuing to add users, if we retain a hard limit of 20 full witnesses. The system will get increasingly centralized around 20 individual users, making it one of the more centralized cryptocurrencies available.
There is really no way to logically deny that if Steem continues to add new users, it will see exactly the same problems with population ratios and representation that the dysfunctional, collapsing US system is right now. However, witnesses are unlikely to approve reducing their rewards by adding new full witnesses, nor are Steem's users likely to be eager to reduce the reward pool to make the same accommodation.
I do not have any magic bullet-solutions, but eventually the community will need to make adjustments if the rate of growth continues. The only way I see to increase the reward pool to potentially reward new witnesses is to continually increase the price of Steem, such that the value of each day's reward pool is maximized.
For that, we should add as much transaction value to Steem as possible by having it added on exchanges that allow voting, such as Binance and Cex.io. Any new ways we can add to spend Steem or SBD directly will help in this regard - storefronts, auctions sites, etc. Encourage others to transact or exchange Steem directly for goods whenever possible. I have helped pay for animal rescue vet Bills with Steem, and I have also conducted loans and paybacks via the Steem coin.
Encourage your friends and other users to do the same.
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