RE: 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?
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.