I've been wanting to get an answer on this. What's to prevent someone from selling their votes? What if a whale sells their $100 vote for $50 of bitcoin on other forums?
For example, if a single vote from a whale at 100% power can upvote someone's post to the front page and also earn that poster $100, what is to prevent that user from offering the whale $50 in bitcoin? They both win in this situation.
The whale converts a vote to $50 + gets the curation rewards at the end. Second, there is more incentive since he gets $50 of liquid bitcoin outside of the exchange.
The poster gets a huge bump potentially putting his published post about his business or life or whatever he is trying to push to the front page AND gets $100 of which 50% is Steem Dollar and the other in Power correct?
Both win in this case and the issue here is then we start seeing content that people are just paying for to push their agenda and we start missing out on the posts that could be great but never get bumped up since they aren't paying whales for the extra attention.
Sorry if I'm missing something here but if I am wrong, what prevents that from happening or what if it is already happening?
Edit: Thanks for the upvotes and hopefully this goes up so we can get a clear answer. I don't even care about the money to be honest. I just haven't found it yet and if it's already posted then please direct me to an answer and i'd be more than happy to delete or down vote this myself.
Continued discussion and proposals: https://steemit.com/steem/@biophil/proposal-let-content-creators-commit-a-portion-of-their-authorship-reward-to-curators
Whales have the most vested stake in Steem. They can only cash in their Steem Power over a two year period. If they do things like sell their votes that hurt the public's confidence in the Steem platform, then the Steem they eventually get will be worth far less than it could be. Whales, more than anyone, have a strong interest in preserving the public trust in the platform.
Exactly. It's like a lock-up period for hedge funds and private equity. This lock-up period ensures the stakeholders are all aligned, as "shit goes down."
@dan @ned @biophil
Here's a more in depth example:
Bob wants to promote his Sushi restaurant on Steem. He contacts 10 Whales and each of their upvotes are worth $100 each. He offers them $50 in bitcoin each.
Bob pays $500 in bitcoin in total to 10 of these whales. In return Bob's post is bumped to the front page and has 10 vote with $1,000 on it. Bob in 24 hours will have $1000 converted into $500 Steem Dollars which is semi liquid and $500 of Steem Power. In the end, Bob is able to recover his initial investment which is liquid and an additional $500 in steem power that is paid over 104 weeks. Not only does he benefit from that, but he also promotes his business and gets it to the front page thus reaping additional marketing benefits.
The whales on the other hand each earn $50 of liquid bitcoin outside of this. Additionally, the whales will also earn their standard curation rewards.
Both Bob and the 10 whales make profits and are happy. However, now we are promoting a behavior where content that is pushed to the front page are people paying whales outside of Steem to help get them to the front page. This could be good or bad in that we'll start seeing promoted content more often instead of typical average posts that could be great but we never find out since it never trends.
Thoughts?
As far as I know, there is nothing stopping a whale holder of Steem Power (SP) from upvoting his/her own blog posts and cashing out the 50% Steem Dollars (SD) of rewards.
Thus, the only difference proposed here, is that that the whale can gain extra income by monetizing the advertising value of a widely read blog post. What is the moral hazard of monetizing advertising value? Even the whale could do this with his own content, so it seems to be a valid activity for anyone on the site.
The real issue if any being raised is the notion that whales have an inordinate voting power. But remember that whales do not own 100%, and they are not guaranteed to vote as a bloc, and thus their voting power is diluted by other minnows, proportionally (the quadratic squaring of voting power is after summing the vote totals).
Also the amount earned from rewards is roughly 3.875% of the money supply per annum. So it isn't a huge proportion of the market cap.
I don't see a problem here. The problems I see include the current predominant game theory to vote as site-wide groupthink.
Thanks that helps clear things up a bit. Wish I had seen and read your post no idea how I missed that. I'd upvote that too if I could but it's already expired.
So let me ask you this, in terms of Steem price, do you see this as a positive or negative thing? Obviously people willing to pay bitcoin to buy steem on the market shows that there is demand. If demand is greater than supply in the markets then the price goes up.
But in this case, if more and more people are willing to pay whales for their and there is more demand of users paying whales for upvotes for their bitcoin then price should go up as well, but then there is really no way to gauge or track that right? So, I guess my question is would it have any effect or little effect on price at all because of how difficult it would be to see if this is happening at a grand scale .even now?
I'm still working out my thoughts, but I wanted to throw this proposal in: https://steemit.com/steem/@biophil/proposal-let-content-creators-commit-a-portion-of-their-authorship-reward-to-curators
I replied and threw in an idea as well. Thanks for helping bring discussion regarding this topic.
I've wondered this as well. Great question. So hopefully a few with more knowledge can enlighten us.
What happens if a whale does exactly that and then is exposed to the community? Sounds like a good way for someone to destroy their own credibility and future on Steemit.
The blockchain hides nothing so if someone suspects, they can investigate and call out someone for that type of behavior.
At first I can see this thing going on. later perhaps people will get to know who is abusing the system and vote for other posts.
Hey, thanks for reaching out to me. I'm going to write an answer for this in the next couple days, and then I'll think more about it in the coming weeks.
For starters, I don't think we should be too satisfied with the "whales have the most to lose, so they won't misbehave." We have to do better than that.
Thanks for mentioning this. I was just talking about it with my wife just last night. This seems to be a valid concern, especially when you see how much Steam Power is increasing via interest every day for the whales. If the price of STEEM goes up along with their exponentially growing stash, that could make their votes even more powerful, further increasing the incentive to do this. I'm hopeful the altcoin world has seen their share of scam coins and are ready for something different in STEEM. Time will tell.
I also think, in a way, SP is just a marker for influence. As a social species, we respond to influence. We want to be part of the "in" crowd and get them to help us out. Often we do this with money, but it also shows up in many other forms. I wonder if we'll ever escape the hierarchy aspects of our nature, and I see Steemit as a big social experiment along those lines.
Thanks for the insight. So I guess in this case instead of companies paying celebrities to tweet a product their promoting, they'll come here and pay users with the most influence to upvote and promote their product. I guess it's a step in the right direction right?
These are some of my growing concerns... if you are converting your funds into SP you are pretty much giving faith to the developers that they have thought about ALL these scenarios and have contingencies in place. And that they are going to protect Steemit from future hacks. And that whatever is going on now is going to be sustainable... at this moment it's a little unclear to me on how that's possible.
But no risk no reward right? Hence why I purchased some SP regardless...
But the risks are huge and I don't think the devs have thought about every possible scenario on how you can game the system or how the community can quickly become unfair, clicky and undiverse
I believe it to be very important to have a fair, balanced and easy to understand system of how Steem and SP work towards influencing votes and virility on the system, with respect to the free market. I'm surprised the system hasn't been manipulated more to this date, yet, am glad to see this not have happened (yet). Hopefully, the system stays true and Steemit continues to become a powerhouse.