Hey Again, Steemitizens!
As my followers already know, I am a steem witness and I am currently listed as #71 in the top 100 steem witnesses.
Today, I was nominated to participate in an initiative called "The Witness Block Challenge* by
From what I can determine based on this post where I was nominated for The Witness-Block Challenge, the point is to have witnesses clarify what they do with their witness income earned by processing your blocks into the steem block chain.
Here is an excerpt explaining what 
We figured it'd be fun to challenge witnesses to share with their stakeholders and supporters where the revenue they generate for producing blocks is going.
The premise is simple. Let's say your witness got to process 20 blocks this month. That's about 19 SP. What did you do with it? What are you planning to do with it to benefit the STEEM ecosystem?
The Witness Blocks Challenge
- Do something useful for others (ie. free delegation, account creation for others, etc.) with your witness blocks
- Write a post about it
- Tag it with #witness-blocks
- Nominate a witnesses
We're nominating
because she loves challenges. Edit: Expanding this to 5 nominations to get the challenge rolling and nominating
,
,
and
as well.
Well, I can definitely do that, since both my steem based projects are contributions to the platform and beyond that are both all about helping others, and I pretty much use ALL my steem income for that in some form, anyway
But first off, let's discuss how much money I earn as a steem witness, and disappoint all of you who might mistakenly believe it is making me rich, or that I am already a whale.
Neither are true at all!
As you can see in this weekly witness income report created by the steem account called 
...I am only processing 8 to 10 blocks per day on average, and let me add, that average is amazingly consistent. It's all handled on a curved rotation such that the top 20 witnesses process the majority of all blocks and the rest of us serve as backups, compensated on much more infrequent basis with the number of blocks we catch assigned in a decreasing frequency per witness by the block chain software, in descending order of our witness position rank with higher level witnesses catching more blocks that lower ranked ones.
As a side note here, this is why your witness votes are so critical. Not only are you voting for the people whom you wish to have a hand in steering the direction of future hard forks in the block chain code,and choosing who will be most responsible and reliable for processing blocks, without which, there could be no block chain nor would any sites for you to use on it work without us (and the RPC nodes between those apps and us, but that's a whole other discussion, beyond the scope of this post), but you are also choosing who will, as a result of higher rankings, earn the most income as a witness.
It's also important to note that witness incomes do NOT come from the same "bucket" of daily reward pools that posting and curation rewards come from, so in no way are witness compensations really affecting the reward pool most users worry about in terms of "reward pool abuses" or daily rewards distributions. Just something I wanted to clarify. The witness money comes from a separate bucket of funds generated specifically for this purpose and built into the block chain code by design.
So all that is great Cork, but what do YOU do with your witness money?
Well, I'm so glad you asked! :D
More or less up until about a month ago, I paid for the privilege of being a witness for you.
That's right, you see, the RAM requirements for the servers we run, and the need to maintain backup instances, and storage for backups and other related hosting services like firewalls and things, all cost substantial money. Real money, fiat money. Pay your bills or get cut off kinds of money.
And when you are below a certain threshold of the witness rankings, like most of the majority are, the servers and services will likely cost you far more than you earn in "witness income" on a monthly basis.
Recently I advanced to position #71. I am making about 10 blocks per day on average, so with that, and current value of STEEM at $1.77 USD per CoinMarketCap.com at the time of this writing, you can quickly derive the following math:
Witnesses below #20 get paid 0.93 STEEM per block - not quite one whole steem per block to be clear.
(.93 STEEM) times (9 blocks per day) times (30 day average days in a month) = 251.10 STEEM per month, on average
251.10 X $1.77 = $444.447 USD
Now, my required 64GB dedicated VPS witness servers cost me $320 USD at vultr.com.
I also pay for automated backups which add an additional $40 USD per month.
So my base cost for a minimum configuration is $360 USD per month.
In theory this is the first month I will have really made a profit on the 64GB servers.
$444.45 - $360 = $84.45
Maybe $75 USD all said and done after withdrawal fees to fiat. Hardly enough in the US, to compensate for the sheer amount of time, stress and aggravation involved in being a witness. We will talk about that some other time.
Many witnesses below my ranking have abandoned witnessing all together since the 64GB increase became necessary about three weeks ago, because they cannot afford to pay for servers that do not produce income.
This affects us all with ever so slightly slower processing times. I am talking only in mere milliseconds, so for now, don't be alarmed, unless we ALL quit witnessing at the same time together. Most believe that only 30 actively functional witnesses are needed to keep our transaction and block processing speeds adequate, per most estimates.
However, if something is not done to make the block chain processing more efficient, we will likely need to upgrade again to 128GB servers within about 8 weeks, causing even more witness attrition as we approach server rental costs of $600-$800 per server per month on incomes of closer to $200-$400 for top 100, non-top 20 witnesses. It is rumored that upcoming hardfork 20 will have some code in it to try and help mitigate the growing RAM issues causing witnesses to quit witnessing because it's too expensive to lose money running a server just for the fun of it.
It doesn't make economic sense to be in the witnessing business, unless you truly just love supporting the chain with your own money. Unless you are in the coveted top 20 - which is no trivial task, and requires millions of SP in backing votes, MILLIONS.
All of this is moot if the same ram scaling issues are not addressed on RPC nodes, which are super RAM hungry and require way more memory than witness nodes and cost about triple to maintain what operating a witness server costs - and these nodes are not compensated at ALL by the chain itself - but are only beneficial to owner operators who use them to empower steem community services and sites and operations that might make a profit - like bid-bots or other steem based tools and things.
Currently is is said we have about ten to a dozen operating public RPC nodes available, and this is drastically not enough to scale us up.
Every transaction that goes through to the chain, from your posts, comments, financial transactions, upvotes, and downvotes and so on, has to go from some 3rd party site like chainbb or busy or dsound or steemit or dlive or dtube, or any of the others, has to go through an RPC node on its way to becoming a block for a witness to process.
An RPC node is a Remote Procedure Call node, and it takes input or output to and from the various steem user interface sites like steemit and the rest and forms a block out of it to hand to the witnesses who validate the information and transactions, prevent counterfeit blocks and inject them into the block chain.
RPCs are also responsible for retrieving information from the block chain, which is really just a big old database stored around the world on our witness machines. These retrieve transactions are how your posts get back on the screen, but have nothing to do with the witnesses. We put the blocks we get from RPC nodes in, the RPC nodes yank stuff back out to show it to you on their own.
That's why we are called "witnesses" - we witness the activities being stored to the chain, and make sure they aren't fake.
Whew! What a lot to understand, right?
So - now that you know how simply complex and how complexly simple the whole shooting match is, and a little about what it costs to run these things... I've been asked - how do I spend the money I earn as a witness? I'll get to that in a minute but you need to know a couple of other important things first.
By now you understand, that outside the top 20 (who are compensated differently than explained herein for all the non-top 20 witnesses) we really don't make much at all and many, if not most, operate at a financial loss on a monthly basis, all to provide this environment for YOU to use, and with hopes we might someday advance to the top 20 which does become quite profitable indeed.
Only that is potentially not very easy to do. Especially if the game might be rigged, so let's touch on that some, shall we?
You see, you CAN buy your way to the top, since rank is determined by the total Steem Power of all people voting for you combined. One MASSIVE account can loft a witness to the top, but it has to be a multi-million dollar steem power account to be able to do so. A few whale votes however, and you can see a witness move up quickly.
The thing is, I've been doing a research project that alludes to some potential gaming of the positions in that regard. It's already exponentially more difficult to climb the witness ranks based on the levels of SP in each currently ranked witness level, but in a way that is similar to increasing your Rep, it can only happen when high powered users vote for your witness account.
But there aren't THAT many giant accounts like that, and many of them all seem to be voting for more or less the same people. People that were here for the launch of steem, and the alleged pre-minings that took place before public access was possible. Rigged? I am not the one to judge that, but have a look at this data work in progress, and watch for a fully detailed report coming soon as I can get it done, with the help of a couple of other witnesses Im in contact with, who are researching the same kind of potential collusion.
This spreadsheet I am working on this week, shows the "dead witnesses" listed in the top 100. It color codes some of their voters to show how the same voters are supporting MANY of the same dead witnesses. I am not even close to finishing this investigation yet, but you can already see from this windowed view into a snippet of the data I am compiling that there is some fishy business going on here.
A lot of users who definitely know how witnesses work (and should know better and be ashamed of themselves) are supporting detrimental dead witnesses who are clogging up the ranking system with their presence and wasting voting power that could be applied to active and beneficial witnesses.
Inactive, "dead" witnesses don't make any income, process any blocks or stop active witnesses from processing blocks at their active positions, but it keeps the active ones down in rank and off of the top 50 page which are the only witnesses which are shown on http://steemit.com/~witnesses - and anecdotal reports from witnesses themselves tell us that making that page can launch your rank even higher.
But most users don't vote at all (less than 30% of you have ever cast a crucial witness vote) and those that do, often have no clue what to do or who to pick so they either mistakenly believe these 50 are the only choices or they just random select from them, ignoring so many other possible and deserving choices who are out here, giving projects and contributions to the community and doing so while losing money on a witness server they stood up to try and stand out in the crowd, a crowd that may in fact be in part, actively suppressing them with ring voting on dead witnesses in their way.
The above data is incomplete, current as of about a week ago and still being thoroughly updated and cross referenced by myself and one other witness who is trying to also work out what is really going on here, but it doesn't change frequently or much, so it's current enough to begin the conversation.
If what I am showing you here doesn't worry you, then we need to talk, because it should worry anyone concerned about the future of this chain and the true meaning of "decentralization" very much. At the very least, it should alarm you that if this is not conspiratorial to suppress lower ranked witnesses, it's at least sheer apathy on some of the largest stake holders in the future of the platform.
After all, the guy who invented witnesses himself, 
Now where were we?
Oh yes, I was supposed to tell you what I contribute to the chain, and how I will spend any witness income I ever have left over after expenses...
Well that would be by doing three things:
ONE: The YouAreHOPE Foundation
Continuing to build and give my income to the world's only steem exclusive, block chain transparent, community generosity fueled worldwide humanitarian aid foundation I created last October, called the @YouAreHOPE Foundation.
The YouAreHOPE Foundation provides Help,Opportunity, Purpose & Empowerment around the world, where it's needed most, with your loving help.
We have touched hundreds and hundreds of lives across multiple continents in about a dozen countries by building a network of steemitizens we call Agents of HOPE who deliver fundamental human needs like physical labor needed to improve communities, and all sorts of fundamental needs ranging from malaria meds, flood mitigation, building repairs at schools and orphanages, seeds, staple foods, shoes, clothing, to educational materials and more for the orphans, homeless, sick and dying and disadvantaged people all over Earth.
We have already done work in Philippines, Nigeria, Ghana, Venezuela, Sri Lanka, Indonesia, USA, Puerto Rico, India, China, Netherlands, Australia and the UK. More to come!
Here are some explainer videos some of our Agents put together:
Next by one of our biggest donors, @InTheNow
And a song by one of our Agents of HOPE
Thanks to all of you who help support YouAreHOPE!
TWO: The SteemStar Network - The Streem at the center of the Steemiverse!
In addition to building the largest block chain based charity in the world that we are presently aware of, I also feel it's just as important to give all people a voice and a chance to be heard, as it is to give them a meal and chance for HOPE...
To facilitate that, I built the SteemStar Network which you can learn more about and watch streaming 24/7/365 at http://steemstar.net
The purpose of SteemStar Network is to give a voice to anyone on the platform who wants or needs one. We have many live shows each week where you can join in on the mic and introduce yourself, promote posts, or your music or art on the chain, and maybe gain some followers. We have shows where you can share opinion, participate in several witness's public town hall meetings or just be entertained by the content we provide each week, across all the shows and unique show hosts.
I have personally mentored 1000's of minnows in the last 10 months and helped many from day zero newbies to modest success stories on the platform. All they ever needed was some fundamental guidance, HOPE, and a voice...
You can even become a show host yourself, if you can meet the time and availability and equipment requirements to do a weekly show, and not only empower your own voice on the platform with a new channel and outlet and audience, but perhaps encourage others in your own sub-communities and followings to join you there.
As a former PAL/MSP moderator, and medal of honor winner, I also built MSP Waves, but resigned from that organization last fall, to be free of constraints and community-centric limitations to do these non-community biased projects, open to everyone, without regard to your status or membership anywhere on the platform.
In essence, I built a system wide, worldwide, community fueled charity to empower the powerless and a system wide, worldwide, community agnostic 24/7 live streaming network to give voices to the voiceless.
Here is a sample episode of Steemitizens of Steem, the show for, by and about all of YOU, where anyone can take the mic and drop it like it's hot, but it's just one of many, many excellent shows to catch on SSN!
That's where my money will mostly go - all those servers and services to provide all of these beneficial offerings cost money just like the witness server. The streaming service uses a VPS, a lot of bandwidth, and several paid services and software licenses and such that make it all possible, which I pay for personally, with no income coming back from either the charity or the broadcasting network directly at all. I do derive a few steem per post when I post about these projects, but its pretty insignificant against the actual costs of operations.
Three: My time!
No where above was my time taken into account in the cost analysis of operating the witness, the charity or the broadcast network.
I also happen to be a member in about 50 discord communities, and held aloft as either actual leadership or at least an example of a witness and prominent steemian. As a result I spend about 24-36 hours a time at the keyboard answering the tons and tons of direct messages people insist on sending me every day about all the topics at hand. I personally think it's pretty rude to direct message strangers, but that must just be me, because 100s of you do it every day and think nothing of the amount of time it takes to answer you all.
All of which is fine when it's a genuine project or community inquiry about something I created or participate in leadership of or any legitimate business topic, but usually it's just post spam, begging and some desire to talk to me about nothing for which the inconsideration of people's time is a thing I simply don't quite understand.
I'm sorry. I know I sound rude and selfish here, but we have the public communities for general chatter. I do not have the time bandwidth to have one on one conversations with hundreds of people a day. I wish I did, but I wouldn't be very effective at getting things done if all I did was bullshit around with people I don't really even know very well or at all as is true of most cases of random people messaging me.
/shrug, goes with being semi-famous here I guess, but it's sort of unnerving how much time this consumes and so I consider it an implicit service project - not like the visible charity or streaming stuff, but a much more intangible and all consuming effort that sucks my days away, and leaves me sleeping in 2-4 hour naps every other day or so. No exaggeration, as so many of you who find me here at any time of day or night can attest to.
I also happen to be the vice president of technology for a growing, successful Software-as-a-Service app firm serving many international enterprise scale clients.So that takes up another 60+ hours of my week each week.
I do two or three radio shows per week and attend some of the other host's shows as well, so there's another 15-20 hours or more per week.
In short, I am married to this platform, and my project involvements here are my children. I live and breath it.
Along with other diligent witnesses like 
I often choose to intentionally serve as a honey pot to draw fire from the assholes like nog and grumpycat so that at least temporarily they are not preying on and bullying tiny, innocent minnows with their sociopathic and usually hypocritical lame behavioral issues on the platform.
And when I do the math on my income for all the time I've spent stressing myself out over all this for the past year here...
It's actually fractions of pennies per hour.
No lie.
Ultimately, I'd like to be able to keep doing this full time, and not have the external "day job" that being a top 20 witness could make possible but that's probably a bit of a pipe dream since I am also a partner, founder and executive in the startup I work for, but someday that will end. These things always do. When that happens, I would like to just have STEEM take it's place. That's the mission I am on - to make managing and growing YouAreHOPE my full time endeavor, the SteemStar Network more or less the equivalent of a relaxing, but still useful and beneficial hobby and supporting steem and steemitizens around the world my all consuming passion. It already is, it just doesn't quite pay it's own bills yet.
That's the long tail plan, assuming STEEM and I both live that long. I've got my eye on EOS.IO as a backup plan if steem ever falls apart, but for now, I am still bullish on STEEM and see it having at least a few years before it dies or flies and I'm in it for the long haul with HOPE in my heart.
That's it, in a nutshell... That is, if by "nutshell", you meant the entire damn nut tree, it's roots, and how the environment around it works and why the sky is blue and dirt is brown...
I hope that answers some questions and addresses the "Witness-Blocks Challenge" things adequately.
I am supposed to nominate another witness for the "Witness-Blocks Challenge". I hate to put anyone on the spot for this, but a witness I feel deserves more attention and love is 
Thank you for reading all of this!
See you in the steem!
Yours in service,
@SirCork
Founder @YouAreHOPE Foundation
Founder @SteemStarNetwork
Steem Witness #71