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RE: Go home SBD, you're drunk! How to maximize your author rewards
Great article, @biophil. It makes sense to choose the 50/50 option.
I have a quick question for you. I have seen somewhere that Payouts are proportional to the votes ^ 2.
This would result in reward money flowing to the users with high stakes and that might explain why the voting bots work.
I have written a post (Is Steemit a Pyramid Scheme) about this.
What do you think about this? Am I missing something here? I'd appreciate your take on this, because I've seen several good posts by you explaining the mathematics of Steemit.
Yes, that's approximately how Steem used to work. That was changed a while ago so now payouts are proportional to the votes. No ^2 any more.
The ^2 was actually a cute idea, and I think it worked better than people thought it did. The purpose of ^2 was to make it so that people were incentivized not to waste their votes on low-value content, because their vote's strength would be maximized by voting on content that other people think is valuable also.
Everything in life is a tradeoff, and the downside to the n^2 algorithm was that small users never felt like their votes were ever worth anything.
Thank you for your explanation @biophil. I'm glad that formula changed, because that formula would make the reward pool abuse mathematically possible.
With the current system, all the bot promotions start with a loss. They can turn profit, only if other than the promoters vote the content.
In other words, if no one else than the promotion team upvotes a post, they are guaranteed to have a loss in Steem terms.
I will need to chew on this. Replying to your post...