Improving the Economics of Steem: A Counter Proposal

If you follow @steemitblog, you will have seen this post proposing a set of changes to the economics of the STEEM blockchain that Steemit INC believes should intensify users to basically be less antisocial in their use of the platform.

Looking through the comments on that post, it is quite clear the users of the platform are greatly divided on the three part proposal. So while I could make this post about reasons why I feel the set of proposals made by Steemit Inc won't work as some people think it will, doing so won't add anything to the heated debate about the merits versus the dangers with this proposal. Instead, I want to use this post to make a coherent counter proposal consisting of an alternate set of measures, that, just like the ones proposed by Steemit INC aim to work together in a holistic manner to improve the economics of Steem.

1. Introduce a transparent fish-size bonus.
   
   Where Steemit Inc proposes a curve for rewards that as some point out, favors the rich, there is much to say for a modest incentive towards using few larger accounts rather than many small accounts. I would like to argue though that there is a huge disconnect between the mathematical beauty of a curve and the perception of the average user of the platform. So instead of a curve, I would propose a series of step wise bonuses that align with the different fish sizes. The abouve formula expresses a function that would provide such a series for STEEM. If S is a small scaling factor, I propose an appropriate value should be sought somewhere in the range between 1.01 and 1.05. This would map to a fish-size bonus somewhere in the range between 1% and 5% per fish-size transition. I would propose starting with 1%, observing the impact and then decide if it would make sense to further increase the inequality by increasing the fish-size incentive. In the end this should have the same benefits as the Steemit Inc curve proposal, but without much of mental disconnect for users. For regular users it is just a 1% fish-size bonus. Easy to grasp, easy to connect with, and much less prone to stir up feelings of unfair inequality between smaller and larger stake holders.
2. Make reputation impact opt-in in the voting API
   While the first part wasn't all that different from the first part of Steemit Inc its proposal, now we take a turn that makes the rest of this proposal completely different. If we want to improve the self-regulation of the platform with down votes, there is a hug flaw in the current reputation system that we need to address. A user with a high reputation currently won't have its reputation effected by an account with a lower reputation. It currently is extremely easy for abusers to use bid bots to quickly make themselves bullet proof. Just pump the same money around and around through bid bots a number of times, and your reputation will be lifted up to a level where there is hardly anyone left who could still hurt you. Add to that the culture of retaliation, and no one in their right mind will dare to down vote a crap posting bid-bot user on his way to the top. I would like to propose an API change where DApps, mobile clients, etc, opt in to the reputation system and communicate that opting in isn't meant to be used by bid bots. Doing so should remove the false-reputation-building by bid-bots, and stop abusers from making themselves bullet proof.
3. Make advertising and advertising revenues an intrinsic part of the STEEM economy
   Currently, bid bots fill the gap left by the failing promoted tab feature. While use of bid bots provides marginal ROI for the user, its main value is getting more exposure for your post by ending up in the trending pages. It would be a good thing if the platform could supply a new exposure geared solution. On the other side of the spectrum we find potential new users with a large following on their blog or vlog. This third part of my proposal aims to bring these two together and in doing so aims to attenuate part of the negative impact of the first part of my proposal on new accounts. By bringing together people (including new top content providers with a huge following) who can provide exposure in exchange for ad revenues with people who currently either use bid bots for some exposure or need to turn to advertising platforms outside of STEEM to get targeted exposure, we could give the STEEM economy a major boost while at the same time provide an alternative for exposure geared bid bot usage. Giving new users the opportunity to grow through advertising revenues (paid out in SP), we (more than) compensate for the increase of difficulty for new users to grow partially caused by the fish-size bonus part of the proposal.

I hope @steemitblog will read and consider the above set of measures as alternative for the focus they took for their proposal for the Steem economics, and that you, if you agree this proposal is indeed more likely to grow and enable the economy of the platform than the trinity of measures proposed by Steemit Inc, please bring this proposal to their attention so they might consider it as a viable alternative.