There has been a lot of discussion about the upcoming HF21, but I feel there has not been a explanation of what any of it means directed to the community itself. I don't feel it has been explained in a way that everyone can grasp and understand while seeing the goal of the proposed changes.

This may be due to different styles of communication or just a disconnect from the user base. Either way I believe it is an unfortunate oversight, and this post is my attempt to remedy that. As I feel communication is extremely important for any community, organization or business.

Full Disclosure- I am not a top witness and therefore am not considered in the "consensus" aspects of this hardfork. I am am active community member and a part of a backup witness team (c-squared) though, and due to my involvement of many projects on this chain I have been included in some "conversations" pertaining to this HF discussion. During these discussions I like to think of myself as a community advocate or representative. I try to ensure community concerns are heard and do my best to keep the community in mind through every discussion. Whether I am the best choice for that is up for debate.. but I figure if I am in such a position I should take it seriously and do my best to represent the community.

So with all of that being said, this is my attempt to explain the proposed HF changes to the community, the best way I can. My goal is to help get the correct information out and give the community a good understanding of what the HF consists of, why those supporting it think it's needed, and what happens next.

I will do my best to keep my opinions out of most of this post (I'll save them for a future one perhaps), but rather try to explain the idea behind these proposed changes... from one normie to another. Therefore I will not be focusing on algorithms or charts (I'll link to those for anyone who wants them though), but rather just try to paint a picture of what the ideas of the changes are as well as the desired effect.

First Things First

What is a hard fork?
A hard fork is a when a change in the main protocol (or code) happens on a blockchain. This normally occurs when changes or improvements to the core code of the chain takes place. In order for these changes to take place, a protocol is released (traditionally by steemit inc here on steem) and then "consensus" must occur for the chain to migrate to this new protocol. Consensus is when 17 of the top 20 witnesses "accept" this change in protocol by beginning to run this new code and stop running the old one. Only then will these changes in protocol take effect. This will be the 21st Hard Fork to occur on The Steem Blockchain.

Here is a good description/analogy of blockchain protocol changes for anyone wanting more information.

Please note-
We are not to this point on HF21. The protocol has not been released yet and there is no scheduled date for when that will occur.

Steemit inc did release a Test Net though where witnesses will begin testing the possible code to find any issues or errors so they can be fixed. The goal of this is to prevent possible issues from occurring (as we saw with HF20), but of course not everything can always be prevented. The test net is designed to help though and many witnesses are actively testing the code currently.

Once testing has been done and they feel it's sufficient, a date will be announced.

fork.jpg

HF21 - The Details
This hard fork is made up of two very different and separate aspects - The SPS (Steem Proposal System) and The EIP (Economic Improvements Proposal). I will try to go through each one in a easy to understand way, while linking to more complex information for those that want it.

Part One - The SPS
The SPS, Steem Proposal System or Steem.DAO, is a worker proposal system that is coded into the chain itself. This will be an automated system (no "group" controlling it) that any member of the community can submit a "proposal" to through a front end interface. Stake weighted voting decides what proposals receive funding, and payments are sent out in installments over a time period, after a proposal has been "approved".

The SPS was proposed by blocktrades nearly 5 months ago, and after an agreement from Steemit Inc to fund the development, Blocktrades began building the code.

What is the point?
There are many blockchains in existence that have Worker Proposal Systems (or sometimes referred to as "DAO's) in effect. The idea is a decentralized and automated way to fund things that could improve or add to the ecosystem. This allows anyone from the community to propose something, and if it has enough support from stake holders then it can receive funding.

What can be funded?
Anything. Community members can submit a proposal for absolutely anything. There is a fee of 10sbd's to submit a proposal in place to try to prevent spam submissions, but anything can be submitted.

This could be used for a marketing project, outreach, onboarding, developments to the UI/UX or any other site features. It could be used to hire a management team for the community, PR reps, or some other "role" the community sees as beneficial. It could be used to fund a project idea, a game, etc etc etc.

Think of this as a way for the community to vote and fund projects they see as beneficial to the chain itself as well as the Steem Ecosystem. Therefore depending on Steemit inc. for these items less and less.

It allows the community to redirect some of the shared inflation pool to things that could have a positive impact on the ecosystem and hopefully improve the overall value of STEEM.

Where does the funding come from?
When the SPS was originally announced there had been a discussion of Steemit Inc. contributing a substantial "seed funding" (as detailed in the link above), that amount is now discussed to be 200K STEEM.

It is very important though for the worker proposal system to have sustainable funding to be successful, as well as the importance of it not solely relying on Steemit Inc itself. That means it is even more important that the community redirect sustainable funding from some other place to ensure this worker proposal system can actually provide a service to the community.

Proposed Sustainable Funding Source
On steem we have a shared rewards pool that is sourced from inflation. This pool is allocated to different types of "rewards" as seen below;

rewards graph.png

The idea of this inflation pool is to use these funds to pay for things that add value to STEEM. Currently it's being used to pay rewards to authors/curators through post and comment payouts, a vesting interest reward and witness rewards (paid in SP).

The figures (when combined) look like this currently -

Authors/Curators - 75% | Interest - 15% | Witnesses 10%

As you can see the largest part of the inflation pool is being used to reward content contributions.

The Proposed Change-

Authors/Curators - 65% | Interest - 15% | Witnesses 10% | SPS - 10%

The idea is that since that is the group receiving the largest cut, that redirecting 10% of that inflation to the SPS would be a good place to start. Remember, the inflation pool should be used for what adds the most value to Steem and has the most long term benefit.. therefore improving the price of STEEM for everyone. Many feel the SPS could be exactly what we need to push Steem to where it needs to be, while giving the community control over what is funded itself.

TDLR Part One
The SPS is an automated worker proposal system that was coded by Blocktrades. Proposed funding would be a combination of donations as well as redirecting 10% of the current inflation pool to the SPS itself.

My Thoughts on SPS?
I think the SPS is desperately needed and could be very beneficial for the Steem ecosystem. I think that the inflation pool should be used to fund what adds value, or ultimately that inflation is actually contributing to a decrease in the price of STEEM.

I left a comment on this post of my thoughts overall for anyone interested, but I won't include them here for sake of time and not wanting to include too much of my own opinions