Do human organizations need cheaters? Why or why not?

"The price of greatness is responsibility." - Winston Churchill

In last week's post, Suggesting a Steem question of the year for 2025, I followed on a series of articles from Edge.org that posed an annual "Question of the Year" every year from 1998 through 2018. Since Edge discontinued the series, I thought it would be fun to pose a question for 2025 here on Steem.

You can find the questions and links for each of the Edge.org questions in the previous article.

I borrowed an idea from one of the replies to the the 2018 Edge.org article in order to suggest my own question for discussion here on Steem.

In today's article, I'm going to post my own response article. So, here we go.

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Do human organizations need cheaters? Why or why not?

In order to answer this question, I'm going to consider two different meanings for the word, "need".

In the strong sense, if a human organization needs cheaters, it means that the existence of cheaters makes the organization better. In the weaker sense, it simply means that human organizations can't exist without cheaters.

So, let's start first with the weaker sense. Can a human organization exist without cheaters?

On a long-enough timescale, I say "no". Like it or not, beneficial or not, successful organizations will always attract cheaters.

Why? Because when cheaters are absent, it's not cost effective for organizations to establish defense mechanisms. High-trust organizations are easier to cheat, and cheating has a higher payoff in organizations with high-trust and few cheaters. Hence, cheaters cannot help but be attracted to these organizations (or to emerge from within them).

Now, having established that cheaters are needed in the weak sense of the word, let's build on that and move on to the stronger sense of the word. Do cheaters make an organization better?

Acknowledging that cheaters will eventually arrive in any successful human organization, there is a coevolutionary process that must begin after they do. The organization responds to the cheaters by strengthening its defense mechanisms and the cheaters respond to the changes with their own innovations.

In one sense, this is harmful to the organization because the primary goal is undermined - at least, in the short term. In another sense, however, it's helpful because it reduces the overall amount of cheating that's possible - which may help it in the longer term.

@cmp2020 and I discussed this question, and he raised the example of encryption. Today's (nearly) unbreakable encryption algorithms are only possible because, over the course of millenia, every previous encoding scheme was broken. Similarly, unhackable quantum encryption algorithms are only possible because we know that cheaters will make use of quantum computers to break today's algorithms. In an impossible reality where no cheaters existed, we wouldn't need these algorithms, but the fact that cheaters exist means that the best algorithms are needed. Cheaters provide the motivation for their own disempowerment.

Over time, in a healthy organization, this coevolutionary process should reach something like an equilibrium state where the number of cheaters and the damage they do remain stable and tolerable.

The Steem Whitepaper describes it like this:

Eliminating “abuse” is not possible and shouldn’t be the goal. Even those who are attempting to “abuse” the system are still doing work. Any compensation they get for their successful attempts at abuse or collusion is at least as valuable for the purpose of distributing the currency as the make-work system employed by traditional Bitcoin mining or the collusive mining done via mining pools. All that is necessary is to ensure that abuse isn’t so rampant that it undermines the incentive to do real work in support of the community and its currency.

Obviously, that statement is fine tuned to the Steem blockchain, but I think the first two sentences are generally true for all successful organizations.

In my opinion, the last phrase (in italics) describes the difference between a healthy organization and an unhealthy one.

In unhealthy organizations, the existence of cheaters can also create a sort of a creative destruction where they will destroy the "host" organization. Obviously, this is not good for that particular organization, but it frees resources for use by other organizations that have better defense mechanisms.

Finally, as soon as it is acknowledged that cheaters will exist in any successful organization, we can also anticipate the arrival of a new class of cheaters who cheat in defense of the organization. Real world examples of this include white hat hackers and Civil Disobedience movements.

So, there's my argument in a nutshell. It's like the hygiene hypothesis in biology. The hygiene hypothesis theorizes that exposure to pathogens in early childhood bolsters the immune system throughout a child's life, and that observed increases in things like asthma and hay fever are happening as a result of increased sanitation in the modern household.

Similarly, if an organization is successful it will attract cheaters. And as soon as an organization has a small number of cheaters, it needs others in order to validate and optimize its defense mechanisms and to limit the overall harm that cheaters can do.

Conclusion

So, in my opinion, at a large enough scale and over a long enough time span, the only human organization that doesn't need cheaters is an organization that can't exist - an organization that has no cheaters. As soon as one cheater exists, some others are needed (but not all others!).

While writing on this topic, it's hard not to think about the Steem ecosystem and it's perceived problem with cheating. I agree with the whitepaper that it's not possible to eliminate cheaters and we shouldn't try. But, that doesn't mean that we shouldn't try to restrict the damage that they do. Right now, it seems to me that we have cheaters and we have fair players, but we could use more of the coevolutionary competition between cheaters and evolving defense mechanisms.

What are your thoughts? Feel free to answer the question with your own post and use the tag, #steemq2025!

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Thank you for your time and attention.

As a general rule, I up-vote comments that demonstrate "proof of reading".

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Steve Palmer is an IT professional with three decades of professional experience in data communications and information systems. He holds a bachelor's degree in mathematics, a master's degree in computer science, and a master's degree in information systems and technology management. He has been awarded 3 US patents.

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