Securing Digital Rights for Communities (Game Theory and Governance of Scalable Blockchains for Use in Digital Network States)
Chapter 8 – Reputation
How do you know who to trust when you are under attack?
Audio Version:
Introduction
Most blockchains rely on pseudonymous wallet addresses (long strings of letters and numbers) that do not clearly reveal who you are, how much you contribute, or whether others in the network find you trustworthy. By contrast, named account systems such as those used by Hive blockchain let you appear under a human-readable name (e.g., @starkerz or @theycallmedan). This approach opens the door to reputation: not only can people see your on-chain actions, they can also develop a subjective sense of who you are and what you contribute to the network. It should be noted that it is the user's own choice as to whether or not they reveal their true identity.
Reputation in decentralised systems functions on two layers:
- Tangible, on-chain reputation (measurable community votes, account history, stake-related indicators).
- Intangible, human-to-human reputation (subjective assessments by community members over time).
When combined, these give each user an identity within the network. It takes a user a significant amount of time to build both tangible and intangible reputations and relationships on chain. As a result the value of these reputations to the user often means more than the token balance in their accounts. This has interesting improved escrow and trust implications as will be discussed below.
8.1. Why Reputation Matters
8.1.1 Social Trust Over Trust in Code
Blockchains pride themselves on “code is law,” but in crisis scenarios (takeovers, chain splits), people look to trusted individuals. A strong group of reputed accounts can be more decisive than any purely technical solution during an attack or time of crisis.
8.1.2 Accountability and Skin in the Game
If you spend years building a good reputation, it becomes very costly to betray the community. Losing a high-trust status can hurt more than even losing tokens you hold.
8.1.3 Support of Nuanced, Complex Social Interactions
Named accounts with recognized reputations enable user-to-user escrow, collaborative proposals, delegated voting, and similar advanced features.
The intangible trust you build through honest interactions and consistent contributions underpins these unwritten social contracts.
Reputed users can provide on chain legitimacy to real world physical locations such as businesses. With a user carrying out an action in a trusted business, such as making a purchase, with a timestamp, product purchased, photograph of the purchase, price, geolocation amongst other information, this allows Proof of Person systems to be built using trusted real world locations. These locations are identified based on the reputation of certain trusted users within the community.
8.2. Two Types of Reputation in Decentralised Systems
8.2.1 On-Chain, Numeric Reputation
Often tracked via a “reputation score” or stake-based metric. Every upvote, downvote, or curated activity leaves a digital trail. Over time, these accumulate into a visible on-chain record and reputation.
- This numeric score is transparent; anyone can inspect an account’s history and voting record.
8.2.2 Intangible Human-To-Human Reputation
Beyond metrics, people form personal judgments about your character, reliability, and expertise.
- This intangible layer allows you to gain influence even if your numeric on chain reputation score is moderate, because active community members may appreciate your attitude, problem-solving, social or code contributions.
Both layers reinforce each other. Good numeric signals usually reflect consistent quality, which boosts intangible reputation and intangible credibility often translates into stronger numeric endorsements from top stakeholders.
8.3. Building Reputation
8.3.1 Consistent Value Creation
- Write informative posts, produce helpful tools, run infrastructure, or moderate community forums. Over time, repeated value-added behaviour raises your standing in the community.
- Being active, responsive, and transparent goes a long way.
8.3.2 Stakeholder Validation
- On such DPoS systems like The Hive Blockchain, large stakeholders can give upvotes that significantly affect an account’s on-chain reputation and earnings.
- If recognized stakeholders repeatedly endorse you, it signals broader trust in your work.
8.3.3 Social Presence and Visibility
- Engage in discussions, help onboard newcomers, run meetups or digital events. People gradually learn you are reliable.
- Reputation is earned: the more you prove yourself and carry out actions that benefit the community, the more intangible weight your account carries.
8.4. Reputation-Based Trust and Account Value
8.4.1 Account Reputation as an Escrow
- If you hold significant stake and a solid reputation, others can safely entrust you with temporary custody of tokens (e.g., for trades or proposals).
- Because your intangible reputation often exceeds the face value of your tokens, you have enormous incentive not to risk losing community trust.
8.4.2 Increasing Account Valuation
- Your personal intangible capital can exceed the raw dollar value in your wallet because it reflects long-term engagement, verified contributions, and community goodwill.
- You might even help resolve disputes or coordinate tasks purely on the strength of your good name.
8.5. Reputation-Based Delegation and Voting
8.5.1 Why Users Delegate
- Not everyone has the expertise or time to actively vote on governance proposals or curation. They choose to delegate their voting power to accounts they trust. This helps with distribution of tokens and allows the trusted delegatee to earn stake from curation rewards when ever they vote.
- Such delegations of voting power often goes to accounts with high on-chain and intangible reputation.
8.5.2 Scaling Influence
- As your reputation grows, people may delegate more stake to you, amplifying your decision-making influence in governance or curation pools.
- Over time this can make you a de-facto community leader. If you misuse that power, your entire social investment in the community may collapse.
8.5.3 Defence Against Attacks
- High-reputation delegates are less likely to act maliciously because losing that reputation is worse than any short-term gain.
- Attackers might buy tokens, but without trust, they cannot easily sway user delegations in the face of well-established reputable entities.
8.6. Reputation in Times of Crisis or Forking
8.6.1 Communities Rally Around Known Leaders
- In a split scenario, the question isn’t just “what code do we run?” but also “which people do we follow?” Named, reputable figures can mobilize a critical mass for a successful fork.
8.6.2 Long-Term Commitment
- Reputed, long-term token holders typically have spent years building trust. The personal cost of abandoning the chain or acting maliciously is enormous, which helps anchor community stability.
- Newcomers, even with large token balances, lack that intangible goodwill from the community, so they can’t match the social capital of long-standing high-reputation contributors.
(See chapter 13.4.2 for more information on forking away from an abusive / malevolent whale stake)
Conclusion
Reputation is the social lifeblood of censorship-resistant, decentralised systems. It transcends the purely mechanical realm of token balances and block production. When crisis hits or when the community needs leadership and integrity, people turn to those with established, trustworthy track records.
By embedding both numeric (on-chain) and intangible (human-based) reputation layers, digital communities following such a model as described in this book can:
- Incentivize long-term behaviour that consistently benefits the community.
- Enable advanced trust mechanisms such as escrow and delegation.
- Foster a resilient culture where user names, histories, and reputations matter just as much if not more than raw token stakes.
- Identify trusted real world business networks where reliable trade and Proof of Person systems can be built
Ultimately, combining strong Tokenomics with healthy social dynamics (via reputation) creates far more robust ecosystems than code alone can provide.