The Need For Soft Infrastructures For Public Blockchains

A blockchain is a tool

A Delegated Proof of Stake (DPoS) token is a means to access a public blockchain. It is not a deposit-like product that earns interest nor a share of stocks that receives dividends.

A public blockchain is an advanced ledger system and it is not a bank. It is not a company, DPoS token is not a share of stocks.

The DPoS token’s utility is a governance mechanism device.

Governing or making sure a node stay honest and will play by the rules would make a tokenholder entitled for an incentive which is the share in the forging rewards. A tokenholder completed a task, that is why a corresponding compensation was due to him/her. This task includes the concluding with community of network users (i.e. validating their wealth) that the recording of transactions by a delegate was done efficiently, effectively and ethically.

Therefore, when the tokenholder received an incentive, it is not the same as receiving a passive income. This compensation is for a dynamic work completed that entails a constant research on what his/her elected delegate is doing on the blockchain. Included in the said task is the execution of immediate mitigating measures if there is a misbehavior or a perception of it against a delegate that will affect the safety, soundness and fairness of the operations of the blockchain.

The records are immutable and transparent on the Blockchain; there is no need for advanced skills to make any findings of unethical practice or violations of community values. It is the duty of every tokenholder to be aware of all the transactions of their respective delegates.

Otherwise, if enough tokenholders, become passive holders of this utility token and not use it as intended. The tokenholders failed to conduct the necessary governance to punish a dishonest delegate (node). With that, the security of a DPoS Blockchain is compromised and general acceptability for fairness of recorded transactions on the blockchain became weak. Enterprise value of the Blockchain will suffer and the value of the share of the forging rewards is worthless. Thus, if there is no work being done by a tokenholder, there is no pay due to him/her.

Soft Infrastructures

The market knows that DPoS is not the same as POS in terms of security. In the “trillema” of a blockchain, a DPoS Blockhain did not prioritised security. Therefore, it is essential for every tokenholder to use the token for governance and secure the network. In the other words, while the POW blockchains relies on the hash power to secured the network, the DPoS leverages on the wisdom of the crowd.

The reiterates that, the strength of the security of the DPoS Blockchain depends on how strong is its weakest link which could be anyone of the delegates and the readiness, i.e. the soft infrastructures, of the community to punish said dishonest delegate.

The collective’s main purpose is to compensate the failings of the hard infrastructure of a DPOS blockchain by building the necessary soft infrastructures.

Post Script

The collective assumes that the reader is already familiar with DPoS and Satoshi Nakamoto’s Bitcoin: A Peer-to-Peer Electronic Cash System paper (Bitcoin White Paper).

This is just an implementation of item 6. Incentive of the Bitcoin White Paper on a DPoS platform which discusses how the validity of the value of the wealth was being upheld by honest node who plays by the rules and will not undermine the system.

To clarify some ideas, please see below:

The “trillema” of a blockchain refers to 1) Decentralization, 2) Security and 3) Scalibility. It has been said that a designer of a blockchain can only prioritise 2 out 3 of the factors affecting the operations of the blockchain.

When the collective posits that a blockchain is immutable, censorship-resistant and trust-less, the practical application of that is a successful transaction of a sender of 1 token to a receiver without a guarantee of a third party.

On the other hand, when the collective states that the general acceptability for fairness of the recorded transactions on the blockchain, it means that when a sender of 1 token valued in fiat, by the time the receiver possess said token, the value in fiat remains the same.

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