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RE: Why Flagging is Important
Retaliation is a big issue with flagging, absolutely.
We like the idea of "Dark Steem" which used to float around... where (perhaps) you could earn curation rewards for flagging content in the same way that you earn "Steem" for upvoting content. This might provide some necessary incentive for flagging, rather than pure risk of retaliation. Food for thought! As communities here develop surely there will be more structured policing ideas modeled off of the way SteemCleaners and Cheetah have worked, etc.
Allowing rewards still wouldn't stop the assholes like @berniesanders from downvoting people with his 20 accounts because they disagree with his actions and dislike him as a person in general.
If flags could somehow not affect rewards and be forwarded to witnesses to decide on whether a post is hidden or rewards are taken, that would potentially stop this kind of abuse.