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A good question! Though I'll leave interpretations and analogies with Steemit to others...
I'll just make a couple of points - this thing in China may function internally but it won't survive contact with other societies - for two reasons. One is that all repressive regimes may look good to their creators on paper, but once people are given a choice of voting with their feet it all falls to bits. Chinese are not really free to travel and especially migrate so basically the Chinese government can do whatever it wants... but that can change too. The second point is that natural selection applies to societies as well, both within them and in interaction with others. A society whose rules are designed in such a way to heavily discourage rebelliousness is doomed to stagnation and won't be able to compete with others. "Rebelliousness" directly translates to "mutation" in biological evolution. And just as in biology, a society which does not have a healthy proportion of mutations cannot evolve and will inevitably fall behind its competitors.
As for Steemit... the idea of everyone policing everyone else and their power in doing so being directly proportional to their steem holdings... Well draw your own conclusions and parallels with what I just pointed out above.

Right. I've been trying to make this point for some time. As China's Social Credit is A Gamified Control system (Like steemit) On Steriods. There are a few differences that make steemit different in a positive way. But both systems fix issues by adding outer layers, while keeping the bad stuff in the core as bad as it was.

Where china's system is being build around Psychology of the worst kind, steemit seems to lack any psychological considerations.. It starts with money and well, let greed battle it out with the man on the street. Result greed causes conflicts, and the man on the street is used to fund the war.

I also see brilliant people come up with great idea's how steemit could be actually used in a positive way.

To me the internet has always been about sharing. But nowadays everyone is worried about copyright egoism. Everyone is about Open Source, not about Free Software.

Money is their 'freedom' so they enslave themselves for a freedom they'll never get.

Steemit is still very young, as more people join the platform we will see things change. So I hope that the issues that we see somehow get ironed out in this beta.

I see an increasing need for equality.

What would you see as a solution or a road to a solution to the issues that you see?

Hmm, I don't know really. Primarily because I don't know how much the rules Steem currently operates on can be changed.
If I could do something I'd definitely do a revision of the flagging system first. It is simply begging for abuse. The basic premise behind it is that everyone is nice, plays fair and has the best interests of Steem at heart... extremely naive and dangerous I'd say. It's almost like China's "cultural revolution" begging to happen.

As for rewards which are dependent on the size of benefactor's steem holdings, which is the core principle of Steem economy... I really don't know. Virtual currency systems are difficult to design, almost as much as real world ones. Irreversible capital accumulation at the top is a real concern. Longterm it can be devastating for the greater majority of participants.. who can then simply leave. There is no Iron Curtain keeping SteemIt users in once they realize that no real money is going to come their way since the whales have better ways to invest than in some reputation 25s. I dunno.. taxation, limits on vote weight proportional to account size, UBI? All of those are also very open to abuse and the greedy will find a way to circumvent and even profit off them... not to mention that it would go against the idea of truly free economy.

Perhaps the best way would be to introduce some kind of subtle mechanic which would make it proportionally more profitable to vote up minnows than whales. I still don't know what that would be but I have a hunch that the solution might lay somewhere in that direction.

the flagging system is already in use by a group of people. And another group of people is looking in to this.

The mechanic you describe sounds very good. I hope there is a way to get this looked at by @dan or developers of the platform.

A friendly suggestion: these reflections are deep and meaningful, why not include them IN the post rather than making a rather uninteresting post (ok, mildly interesting to people who can think) and then leaving this insightful stuff to a chance comment ? What if @bifilarcoil had not asked that question ? Wouldn't it have been a pity not to write what you wrote in response ?

Hmm, it's a habit of mine I guess... and a bit of a temperament thing. I think best through dialogue - a "trigger junky" you might say :)
But I'll definitely take your suggestion at heart. I'm still quite new on Steemit and once I find my legs I'll certainly try doing more proper blog posts, without anyone egging me on.

Not sure if this would make the article better.
I'm asking my questions to gain more insights in these systems.
BTW it is coil not coin :-)

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