Flagging has definitely been the number one issue during the last couple of months in Steemit. It came in many flavors:
- whales flagging content they deemed “undeserving” (didn’t agree with the payout, “too much money for this post” - @nextgencrypto/@berniesanders, @smooth)
- whales flagging content which looked “shady” (potentially gaming the platform for the benefit of a small group - @dan versus @ozchartart)
- dolphins and minnows creating voting guilds to counter act these whales by combining their voting power (@steemvoter “stealing” the voting power of its clients to counteract a flagging campaign)
- random flagging to each and every account on Steemit because reasons (the infamous @iloveupvotes and @asshole)
There was a lot of bandwidth filled only with flagging related posts and I’m sure many of my fellow Steeming are fed up with the topic.
So why opening it again?
Well, because I think flagging is the number one reason of Steem going down, as a currency. During the last two months, Steem lost about 50% of its value. Even in crypto terms, where volatility is high, this number is significant.
Let me explain.
How Value Distribution Works In Steemit
Each day, because of inflation, the Steemit reward pool is filled with about 43000 Steem. This Steem is then redistributed via voting.
When you upvote a post, you redirect a certain amount of the reward pool, based on a specific algorithm. The most important part is that you direct a part from the reward pool proportional to the amount of Steem Power you own. That means someone holding a large amount of Steem Power can move a large amount of the reward pool. That part is “allocated” to the post and stays there until the earnings are distributed, when it moves to the author account. A post may earn reward only during this period: between publishing and earnings distribution, which is roughly 24 hours.
What Happens When You Flag/Downvote
I’m using the terms “flag” and “downvote” alternatively because their action is similar.
When you flag a post, you take out from the portion already allocated from the reward pool for that specific post, by the previous votes. The part you take out is also proportional to the amount of SP you own. That means someone holding a large amount of Steem Power will take out a significant amount from the portion already allocated to that post.
Now, here is where it gets interesting.
If you downvote, you breach a contract between two parties which didn’t give you explicit permission. You take out the reward that somebody else considered ok for that post, without asking for his or her permission. You literally “steal” from the potential winnings of an author, without any consequence.
Every bilateral contract should be inviolable by a third party. If A gives to B, by upvoting, a certain amount of the reward pool, then C cannot interfere in this process, unless A and B gave express permission to C to do it. This “explicit” permission doesn’t exist in Steemit. It’s implicitly stated at the voting mechanism level.
Strictly in legal terms, you are not allowed to do this. You can’t intervene in a transaction between two parties, unless you were given this role in a previous contract between those parties. Usually this role is called “arbitrage”.
In this case, this role is not clearly set, not in the TOS, nor in the UI. There’s nobody telling you upfront, very clearly, you can get “robbed” of your potential money, if somebody else decides to do so.
I'm using the terms "stealing" and "robbing" in a metaphorical way, not in a legally binding way.
An Even Simpler Example
Let’s say I’m a coach and I deliver a coaching session to a group of clients. This thing happens in a building with many rooms, each room hosting a separate coaching session. Each day there is a certain amount of money in the building, money that should be disbursed to the coaches, by midnight, using atomic, individual transactions between attendees and coaches.
So, if the attendees in my room find the session useful, they pay me. Some decide not to pay me.
But other people, just by looking at the transcript of the session I gave, and at the transcript of my earnings, decide I got too much money.
Stop for a moment and look at that: I got too much money from the money I already received, from other people. And they take out a certain amount of money out of that, proportional to their influence in the building.
Would you be a coach in such a system? How predictable is your activity there? How can you increase its predictability?
If there is no other rule, the only obvious way is to create partnerships with influencers. Or with people who proved they can hurt your earnings if you don’t conform with their requirements.
In some countries, this is called a protection tax. In other, it is called “mafia”.
These types of structures appear when the governance is either too weak, either too difficult to enforce. If a system is left unorganized, it will self-organize around power people, or those who can guarantee survival (in this case, who can guarantee your revenue won’t be hurt).
On the other hand, if a governance mechanism is too regulated, it becomes a burden and value can't move freely.
Steemit doesn’t even have a governance mechanism in place. There are a few witnesses required to run the hardware layer of the platform (and I'm happy to be one of them for a few months now), but there is nothing clear about what they can or cannot vote / downvote. There is no Steemit Constitution, there are no rules other than the plain old: “I’m the powerful guy and you’re weaker than me so if I don’t like what you say I’m exerting this power to rebalance things according to my own views, not to yours”.
It’s Human Nature, Not Steemit
The bad news is that this thing is not specific to Steemit (unfortunately, there is no good news).
Greed, pride, jealousy, these are not invented by Steemit. They were around since humans are on this Earth. They are dragging down the entire world, not only Steemit.
So it’s not the algorithm, it’s not the code, it’s not the UI, it’s not the marketing, it’s the people. It’s their engrained greed and pride and jealousy which are pushing towards a society in which the only rule is brute force (or the force of the wealthiest). Again, this is not invented by Bitshares or Graphene or Steemit. It has nothing to do with it.
It’s just how we, humans, are wired. We’re stupid.
Who wants to live in a country where people are constantly fighting with each other? How many Syrians are leaving their country specifically because people are fighting a war, this time with real weapons?
How many of you want to move to Syria right now? Come on, folks, how many? Raise your hand, I want to see you.
Huh.
Nobody?
Why? Because it’s unpredictable? Because your life is modified without you giving explicit permission? Because there’s no rule, other than the one with the biggest weapon?
If you replace "weapon" with Steem Power, how different is that place from Steemit now?
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses