Caravan FAQ #1 - Use of Bid Bots

Because the meet ups we host via the SteemPH Meet Up Caravan typically range between three to three and a half hours, the question and answer towards the end of each meet up are usually under some form of time pressure. This series aims to answer some of the commonly asked questions with greater details than what we can afford during the meet ups because of time limitation.

One Question Always Asked Vaguely

About using bid bots

Both @dandalion and I find this question one of the most difficult to answer. One reason for that is in our experience, this question have never been asked explicitly. The question is often asked in variations of the below ways:

• What/How about bid bots?
• Is it okay to use bid bots?
• What are your views about the use of bid bots?

More often than not the question is asked with some hesitation as if there is shame in even opening the topic up.

The first step I will attempt to do is to try and remove the ambiguity of the question and disaggregate it to a few question based on my understanding and impression of what really are being asked.

• What are bid bots for?
• Is the use of bid bots profitable?
• Does it really help to use bid bot, and how exactly does it help?

In answering these questions, I will try to keep an open mind and remove personal values and belief, but some of that are likely to slip here and there. I will also refer to other materials both pro and against the use of bid bots or specific aspects of it to keep this balanced.

What Are Bid Bots?

There's been many definition of bid bots and pay-for-upvote services, and if you are reading this, you most likely already know what bid bots are. Bid bots and pay-for-upvote services are businesses ran by individuals or groups with big to huge Steem Power. For a fee using liquid Steem or Steem Dollars an account or a group of accounts will upvote a post depending on the amount paid or bid positions. It is effectively an evolved and open market version of Promoted Post feature announced in the linked post by @steemitblog two years ago.

There are many existing materials listing pay-for-upvote services and bid-bots, and it looks like Steem Upvote Bot Tracker by @yabapmatt is a great tool for users to strategize with their bids.

Is Using Bid Bots Profitable?

When we answer the vague questions about use of bid bots, one of the very first things we say is to think clearly about the reason why one will use bid bots to begin with. The next statement is one where I allowed my personal opinion to slip. The only acceptable use of bid bots for me is promotion, anything other than that is likely to do more harm than good in the long-term. This being the case, profitability should be out of the question.

Why would one want to use bid bot if it is not profitable?

While I believe use of bid bot to be a form of investment, I don't see it as one where the return should be as instant as getting author rewards bigger than the amount spent on a bid. The return is in additional exposure it provides. Aside from experimenting with a few paid upvotes when I was just starting in the platform, I haven't really been using bid bots. Now this does not mean I disagree with the use of bid bots, I can certainly understand how difficult it gets to get noticed for someone who is just starting in the platform, and a key benefit of the use of bid bot is to get to the hot and trending page, if you have the money, and you're either extremely confident about your content or wish to get more exposure for your project. I was once a newbie too, and I often feel I still am. I am lucky to have acquired a few supporters already, and don't currently have a need to use bid bots.

For the purpose of this post, here is a straight forward calculation of when use of bid bots is profitable. This is taking assumptions that are not far from our current reality. In this example Steem and Steem Dollars are assumed to be valued at $2, the variables involved in calculating curation and author rewards are disregarded and I took a flat calculation of 75% author - 25% curator rewards, I also assumed that the author selected a 50/50 payout.

Spend in SBD	Upvote Value	Author Rewards	SBD	Steem Power
10	20	15	7.5	3.75

Now taking a look at the value for these variables in USD, it will look like with these assumptions where the upvote value is twice the amount of SBD spent on the bid, it is going to be 12.5% profitable.

Spend in USD	Upvote Value	Author Rewards	SBD in USD	SP in USD
20	20	15	15	7.5

What happens when the debt-ratio continues to be an issue and sbd_print_rate becomes 75%? The bidder will be at a loss by 1.5%. Which still isn't bad considering the benefit of exposure, and if the author is self-voting, the curation reward might even make up for the loss depending on ones Steem Power holding.

Spend in USD	Author Rewards	SBD in USD	Steem in USD	SP in USD
20	15	11.25	0.9375	7.5

Still, going back to my views about the profitability of use of bid bots, if it turns out to be profitable then it is just a bonus, the main idea is promoting yourself, your post, or your project.

How Does Bid Bot Help? Or Does it Really?

I already talked about the promotional benefit of such services in the previous section. Aside from that, such services create demand for liquid Steem and Steem Dollars. If I am a newbie and I want to get noticed instantly, one way to do that today is to buy Steem or Steem Dollars to boost my posts with. There are discussions around potentially removing the reputation impact of using bid bots, but as of today this is another benefit of using bid bots. Whether or not it is a good or ethical practice to boost ones reputation via the use of such services is open to debate.

How Does it Not Help? And When?

When Steemians start to think that use of bid bot is a substitute for quest to continuously improve oneself in creating quality content. @bmj in Is It Worth Using the Bid Bots to Get Upvotes? closed the post with this statement and I couldn't agree more.

_{"The most reliable way to make good rewards from your posts is to write great content. Don't just drop a picture and expect it to make mega bucks, unless you've got a lot of very powerful friends upvoting your trash. Add some value to your post by writing a decent backstory. You'll gain more upvotes, and followers, which will translate into bigger rewards over time. Use the bots to gain some rewards, but there is no substitute for good quality for long term gains." ~ @bmj}

One of the cons @inertia, operator of @drotto sited in his post Benefits of Pay for Votes is abuse where bad contents get rewarded. I feel we are making progress on this from the blacklist of @builteam, to the star rating of @smartsteem, @grumpycat as infamous as he/she can be, made a big push to avoid last minute bids bringing the acceptable boosting period to no more than 3.5 days. Operation Clean Trending from @heimindanger, creator of @dtube started a long debate as he try to drive yet another change against getting boosted content to trending.

From a business perspective, the operators of pay-for-upvote services should have eliminating abuse at the top of their priorities. Now this is easier said than done when it means potentially letting go of a fraction of their profit, but less profit is always better than none. It will take going back to the drawing board every so often to come up with schemes to combat abuse. The community in, around, and outside of Steem and Steemit need to continue to believe this:

When we put ourselves first 100% of the time is another indicator when bid bot is not helping. Although this is not limited to bid bot, this is true with other types of abuses involving bid bots or not.

Credits

SteemPH Meet Up Caravan Banner - @oppaniayu
Abstract Art - Pixabay
Megaphone Photo - Pixabay
Dices over Newspaper - Pixabay
Math in Blackboard - Pixabay
Quality, Time, Cost Triangle - Pixabay
Drawing Board - Pixabay