Bidbots and you: A foretelling
I just read an article from @krnel talking about bidbots and running an experiment to discover proof if they harm or help the platform.
There is obviously a lot of discussion about them and I have been relatively vocal in my disapproval of them as in my opinion, it leads to vast amounts of value being driven toward a narrow and very high point. It seems quite obvious to me why but I could be wrong.
Scenario:
Accounts bid to gain access to a public pool of value from those who already have access. Those with stake.
They bid 100, they get an upvote of 150 out of the pool.
7 days later, the payout is returned minus the curation of 25% (assuming only one voter after 30 mins) this means 37.50 in curation, 112.50 for author. The author gets 12.50 profit, the bidbot gets 100 paid +37.50 in curation.
Each round, the bidbot can increase its value by 137.50 / the voter by 12.50.
They both power up their earnings and repeat the cycle 100 times.
The bot has increased its value by 13,750 / the voter 1250.
Let's say at the start, the bot vote is 150 and it has 10. It allows 10 accounts to use it. In the 100 days, the powered up value is 137,500 / the profit for the 10 users is 12,500. But, the increase in SP means it can now give 80% votes which means it can service 12 users a day and at the 100 day mark starts doing this.
The next 100 days will see a return of 12 x 137.50 x 100 = 165,000 and return 1250 x 12 = 15,000 to the 12 users.
After the 100 days and at the current prices each of the 12 bidders who have added 1250 Steem power have a vote of $0.28 for a combined value of $3.36. The bidbot however with 137,500 from the first 100 days plus 165,000 steem power from the second 100 days has increased its own vote by $68.59.
To have a vote of the starting 150 requires around about 700,000 Steem power which is about $2.3 million worth. In 200 days (only increasing bidder numbers at the 100 day mark) it has added 302,500 steem power with a value of $1 million.... in 200 days.
With the $68.59, it can now service 15 accounts for the next 100 days and add another 206,250 in SP for a combined total of 508,750 and have added $115.25 to the original vote. By years end, the bidbot has doubled its Steem power holdings and can now service 30 bidders with a $150 upvote per day. This continues exponentially.
The first 10 bidding accounts have increased by 4562.5 steem power and now have a vote of $1.03 each. That vote value is of course in a relationship with other voters. What happens when the mega whale bidbots are selling the vast majority of the pool?
Now, bear in mind, the bidbot risks none of its own holdings to do this as its value comes out of the public pool. The bidders take their 'earnings' from that pool to rollback into their bidbot vote. Also, it assumes that those using the bidbots are powering up but perhaps you should check the wallets.
This is with ONE bidbot...
Talk about distribution!!
Oh, you may have noticed something missing from the equations. Quality. It isn't an oversight, quality is irrelevant. All that is required is a mark to vote upon. A blank post will do.
A failure of logic...?
The only reason this system can work is because NOT EVERYONE IS DOING IT which I am hoping this is the reason @krnel is suggesting for everyone to do this because he can see where this leads.
Review that process again and tell me how that can possibly end up in a healthy financial ecosystem with fair distribution and long-term potential. Tell me how someone that chooses not to use it can survive. Tell me how the introduction of multiple bots isn't going to drive the prices up and returns down for bidders. Tell me how eventually, the bots won't start to consume themselves until there are super bidbots and eventually a duopoly and then monopoly. Tell me how that is a better method than a government, a bank, a pyramid scheme. Tell me how you can justify that ethically and morally considering the reasons you joined Steemit?
Tell me something... please.
Oh..right... THE SYSTEM ALLOWS IT. Thanks for clearing that up.
I am not very good with numbers so I am hoping firstly you will be generous with my estimations and secondly someone that IS good with numbers can run a more accurate appraisal and model multiple bots, pool size, and value left in the pool for users that choose not to pay for their votes. Perhaps I missed something fundamental about how the system works and what happens in various scenarios but I am still under the potential delusion that this place was meant to be a community of creators. Well, perhaps it is. Wealth creators based on nothing of value, middlemen.
Taraz
[ a Steemit original ]
Obviously, the voting bots are also a risk and how I think this will play out is that either people will start to flag or... The bid windows will get over-bid. Everyone will lose money... It will work it's way out.
One last thought. The owners of the bots, do have something at stake. It is their stake. Those who own the stake can choose to sell it or delegate it.
However, if the site is losing value, their stake will be losing value as well.
My opinion, some communities will care about content. Until then we are in an odd limbo. :)
I'm annoyed, but it will work out.
yes, an 'odd limbo' is one way to put it.
They only need for the game to play out 1 year to double their investment, and as they power down and prices fall, they will still be able to sell for something. the reason this is possible is because there are still people thinking community. If everyone uses the bots, the end is close to immediate.
The trick is to convince enough people not to use the bots to keep the game running longer. That scenario is starting with 700,000 SP and 10 bidders. Not much really.
Look at the trouble one large whale and one TA shiller can do to the platform, look at how hard it is to deal with it. Look how fast he grew with one whale's support. 22,000 SBD a week. If there were 10 whales willing to support 10 people similarly?
They can take the profits out week by week too instead of powering it up and sell it while prices are high...before the collapse.
Hence the original 104 week power down. You want voting power, you need to tie your fate to that of the steem price for two years.
Well, we are supporting China and Sweetsssj friends and family, Racho... (whatever his name is) is using Haejin to extract a lot of money. Transisto is paying the reward pool to his comment section to promote the things he wants.
Dan is powering down and others want to get more EOS as well. So, I do believe we are going to see some sell pressure. However, I can't get too upset over some unknown users getting some rewards out of the bots.
When people decide to reward good content we will get good content. All other factors aside.
lols
Perhaps this is the wise move?
The unknown bidders don't make much.... the bots are a different story.
"Well, we are supporting China and Sweetsssj friends and family"
😂😂😂😂😂😂😂😂🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣😁😁😁😂😂😂😂😂🤣🤣🤣🤣
Ned needs to make two big delegations. One for flagging bidbots and one for that guy that likes to draw stupid lines :)
Helsing could take both... the problem is, that many of those who benefit from the bidbots would also be delegators to Helsing ;)
Who the fuck is helsing? 😁
oh.. you haven't seen my posts? :P
https://steemit.com/steemit/@tarazkp/helsing-all-whales-requested-or-discussion
I missed that one. My apologies Boss, but a mortal human can't keep up with your faster than lighting blogging power 😱😱😱😱😱😱😱
Actually, they do risk, they risk their SP being locked up in a worthless coin and every investor knows this. The very fact that these people make money from a service is the problem, the problem is that these people make money from a service that is offered with little to any consideration by everyone, but that doesn't stop people from demanding that service, simply because these people can profit.
Whatever the equations may be it will normalize because the demand dictates the supply. If people want steem they can go and drive up the price. If people need fiat they can cash out and drive down the price. If they want MORE exposure they will play roulette for it if they think it's worth it. The value that the platform inherently has will never go awray, the value that people put into it, either through promotional hype or proof of product, or on principles might get diluted but our content will inherently be valuable just the same.
They need not power it up and instead just take the 1000 SBD and sell it on the market. that is 4000 per day. after the first hundred days, they have reduced their investment by 400K. They just need the game to last long enough.
Yeah, they can definitely get to breaking even and covering their butts, I do think there is a solution to the bots and that is a fistful of new account features that let us collectively ban or dunce an account to where they cannot even vote. Screw, that, In case of scammers we should have a monthly review of people's losses and try to reimburse people. Nobody wants to hear that because it sounds like the wild west justice.
#makeRPmeanSOMETHING
Your numbers scarily work out. Forget about the bidder, even if the bidbots were adjusted to guarantee a certain return (easily done by throttling bids and refunding bids after a certain amount), the bidbots are obviously profitable assuming all the SP is their own.
From my observation though, most (emerging) bidbots are purchasing delegation which gives a certain amount of risk, or they have a system that distributes the profits of the bid bots to individual delegators. So in some sense there is still a spreading out of value to multiple stakeholders. The whales that own their own bid bots or delegate further do rather cement their holdings further, though that's no different than them irresponsibly using their stake in many other ways. Something to pay attention to for sure.
Ah so my point before I derailed myself in the previous paragraph is that bid bots aren't necessarily a walk in the park either. But probably easier than other avenues, I am not certain.
The alternative viewpoint, however, is to recognize that bid bots are allowing others to extend their stake where as it was not possible before. Whether or not is used responsibly is the same old fight we always have about misappropriated value on posts.
I disagree with this unless they can not afford to purchase sufficient delegation.
The setup with delegators earning a return is a no-risk setup: only costs the bot operator a promise (and some development to include that feature). The bot operator still earns a commission from that as well.
Generally, when it comes to leasing SP, the more risk the operator takes (read: the more SP they lease), the more interesting and popular their bot becomes to the hungry masses. Some of the larger bots have had to implement minimum bids, or even launch additional bots with lower minimum thresholds because they didn't want to upvote too much and make it ultra interesting for their clients. Additionally, the curation rewards a bid bot earns go 100%, directly into their own wallet (SP), delegators earn nothing from that. So the bot (or Steemian) benefits increased curation rewards thanks to the leased SP/delegators, who get none of that.
What risk you talking about?
Being a poor bot operator who can not lease sufficient SP nor has the clout to gain sufficient delegators to become attractive an upvoter? Yeah, maybe I should cry a river for them. Or maybe, I couldn't care less about that risk tho.
Yeah wasn't focused too much on that risk, really. I didn't work out exactly how much delegations cost. It is a fair point not to care about them :P
You are right that the delegators setup is not risky at all. My point in bringing that up is that it doesn't all go to one place in that case (but it is proportional to delegators' stake.... So I guess it still favors the whale, no surprise there).
It is more than that as that scenario above is one bot servicing 10 people. even if they are all quality posts each day, that is a massive amount of value created for one account and only being distributed to 10 people. they could potentially not power up and convert 1000 SBD a day as well. at the moment, every 100 days that is 400K in value
I don't see how that's any different than 1 whale voting on 10 people though? Yes, the payment, but compared to the stake, I would say that's not as significant.
150 dollar whale vote (assume no other voters)
whale: 37.5 in curation
content provider: 112.50 payout
with 100 payment
whale: 137.50
content provider: 12.50
It is quite a significant difference considering distribution and spread of stake.
Right, I meant comparing to:
self-vote
whale: 150
That's really what I was getting at. I know, it seems like deflecting, because you might argue that the bid bot in between would hide it. But not really. That's why I chalk these issues to the same problem as misappropriated value. The bid bot is a distraction, but at least still distributes more than a self vote. I know, it's probably not much consolation.
it is a slight of hand trick isn't it?
Sort of. But I am angling it towards "blame the whale, not the bot" sort of thinking.
Mediators, in this case bots, are parasites in any field of activity. It is not clear how to overcome this. Someone is working, but someone is spamming.
If the system allows the bot, then the system allows to die itself,
Why allow the bot first?
because it was allowed by the system and people will maximise and optimise their returns. I don't think it was planned to create a bidbot ecosystem but it evolved.
What a detailed calculation. It shows the people behind the bidbots use it to reap off people of there hard earn benefits while practically doing nothing than basic investment
The only argument in support of bidbots is that the system allows it. But even when there are no clear laws or rules on what is allowed in the community, I believed that we should look out for the long term sustainability of this platform.
There's no way else to put it, there's nothing to say in support of bidbots and vote sales. They are like cancer to the system. Gradually eating up until the platform becomes so weak and falls dead.
This is how self-governance must look at systems unfortunately, capitalistic tendencies outrank community thinking for most people.
Numbers add up. I think where some of it falls through is the fluctuating value of Steem. Since it has been pretty stable recently it hasn't been a problem, but if you make a huge bid and steem falls, the rewards for the post fall too if I am correct..
yes, but the steem volume paid is higher.
I'm really not great with numbers so i had to go with 'all things remaining equal' for the scenario
Well, certainly, there are whales who curate good content on their own, but they have their own choice. There are many posts with good original content which do not get the attention, it deserves. So after some time, these authors also start using the bid bots, because that is the new standard of pushing your post and get notified.
And if you see the bot tracker page, then its having many bots. So certainly it looks like that is the most profitable business here now.