In spite of the following, I think my blog is still important for the community to read, because we are brainstorming and discussing the very important design characteristics of Steem.

The important flaws in my proposal were pointed by @alexgr, @sunjata, and @smooth:

• Verified accounts can be sold.
• Desired connections between communities dilutes the metric for motivating unique communities.
• Users don't have a strong enough motivation to be verified.
• Intent of following is not a public metric.

I have deeply analyzed in my head (and various writings sprinkled over Steem and Bitcointalk.org) numerous facets and ideas for reducing the top-down effect of (the natural) power-law distributed STEEM POWER w.r.t. to voting for rewards taken from a pool of debasement of the collective, and I can't find any solution that isn't a degenerate outcome that rewards unproductive or winner-take-all behavior. The fundamental problem (design choice) is the rewarding of a collectivized pool of funds via a popularity contest. It is a Tragedy of the Commons. As far as I can see, there is absolutely no way to spread this out to motivate the investment in creating diverse communities.

We can observe recently the whales (or at least apparently @smooth) are spreading their voting out more, so that now the top trending posts typically have much smaller rewards. The only big paying rewards now seem to come when those whales (and perhaps a large contingent of dolphins) who vote less frequently, decide they really value a post such as Dogecoin creator's post today.

But that isn't necessarily motivating community building nor finding (ranking) content relevant to each user's communities. It is a top-down managed effect, and not driving diverse user actions w.r.t. to building followings. The follow and tags features aid somewhat these needs, but it isn't very monetary (mathematically the typical user can't earn more than ~$5 a month on Steem even if rewards of uniformly distributed) as compared to the reach a user can attain on a larger network that doesn't pay anything, e.g. Facebook.

The value of a social network is in the network connections and network size, not in the content. Users (even content producers such as bloggers) go where they can reach their audience (followers/fans) and friends (fans). There won't be viral penetration into the masses (excepting those ones who have a cryptonerd begging them to join Steemit) given there is no compelling reason for them to be on Steemit, i.e. the rewards paid out on average aren't compelling and the network is small with no incentives to drive network connections and no viral engagement paradigm.

In essence what I see on Steemit, are many people joining due to enthusiasm about the idea and thinking that others will too. They view their votes in the site-wide popularity contest as important for influencing this grand "we are changing the world" enthusiasm. It seems to me to be backslapping, but the masses won't see it that way. They will simply ask, "what is the advantage for me".

Edit: the above doesn't necessarily preclude other features and use cases for the Steem blockchain and token that might come to fruition. The onboarding gimmick of voting from a shared pool of debasement could be perhaps just enough to jumpstart an ecosystem, even though it might not (probably won't) virally spread to millions itself. I am skeptical though.