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RE: Does Steem have a Tragedy of the Commons dynamic?
To be clear, I'm not opposed to voting bots, or even to bidbots. I think that they are absolutely necessary if Steem ever hopes to scale up and increase its user base by a factor of thousands or even tens of thousands.
Would you mind expanding on this? Some voting bots make sense to me, such auto-voting for particular creators acting like a subscription or Patreon-style arrangment, but I can't really think of a justification for bidbots, and I really don't follow the connection to scaling up.
Well, a bidbot like we have today, I agree with this:
It needs to be much more sophisticated than, "payment (or delegation) comes in -> vote goes out"
But what if they did some sort of quality assurance? For example, let's say a bot accepted bids for a period of two hours, ranked the posts that people had submitted, and then distributed votes based on that ranking so that the average vote stayed the same, but better posts got bigger votes and worse posts got smaller votes, and authors of posts below some quality threshold get a refund?
That's just off the top of my head, I'm sure other strategies are also possible.
Of course, it would never be perfect, but neither is human voting. I think bidbots serve at least two useful purposes:
I think of it basically like advertising and SEO in the traditional Internet space.
Maybe? But I think the externality of the chain seeming like a scammy, scummy pay-to-play place is what is usually not priced in.
As a heuristic I think it makes sense to start from a skeptical POV any time there's passive income happening. It seems more likely to be exploitative rent-seeking than productive economic activity to me. Plus SP holders already get interest just for holding SP. The bid-bots also get curation rewards. It seems like there's some double- or triple-dipping going on. I suspect bid-botting (at least in the mindless pay->vote style) contributes to price changes being purely inflationary.
That's the rationalization I've heard, but I don't think I buy it. (Also, the chain is supposed to already have a "promotion" feature that isn't used by the frontends, if we really want this we should use that rather than bidbots mucking with post rewards). If this is what people really want to buy, though, maybe the bidbots should just remove their votes at day 6, after the work of putting something on trending has been done. That way everybody is happy. (Prediction: Not everybody would be happy, the people are paying for the rewards not the visibility).
So, just to be clear, I'm not arguing for bidbots as they exist today. For the current generation, I agree with most of your points above. I just think that it's possible to have "new and improved" bidbot that also protects/grows the value of STEEM so that it's delivered product wouldn't look scammy/spammy.
Maybe bid bots are not strictly "necessary" for scaling, but basically, we have three options:
Of the three, I think the second option is the most realistic path for strengthening the STEEM ecosystem. Not mentioned above, there's also the possibility that a new/better bidbot just emerges and outcompetes the others, but if there's something like the Tragedy of the Commons is going on, incentives might prevent that from happening.
On this point,
I generally agree that passive income might be a signal for skepticism/scrutiny, but I also think that many passive income strategies have been useful/valuable, so (to me), it's not a very firm rule of thumb. High-value investors are going to want to maximize their returns. There has to be a sustainable way for them to accomplish that, or they'll choose the unsustainable ways.
Yeah, it's a shame that the influential curators and developers didn't choose to support the promoted posts usage when that capability was working. At this point, it doesn't even seem to be working at the blockchain level. I'm not sure how/when that happened.
I wonder if there's sort of a "If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem." kind of situation here. I think the original vision of the blockchain was premised on the idea that having an ownership stake in the chain would incentivize you to try to improve the ecosystem. I think that Steemit Inc. has mostly tried to act that way (although not always successfully), while it seems like smaller large stakeholders are more inclined toward the "make it worth my while to keep my value locked up" mindset. Whales have a credible threat of being able to leave, Steemit Inc. can't realistically sell a huge amount without the price tanking so they are more incentivized toward the "make the ecosystem succeed" strategy.
I think the core of the problem is that being able to direct rewards to creators you like is supposed to be the value proposition of holding SP. But if there aren't creators you like here then you can't get that value. It's also kind of a "long spoon" kind of situation -- an overly financialized way of looking at SP may cause people to want to bend the system so they can feed themselves rather than feeding others the way it's supposed to work.
Both are good analogies. I think Steemit is trying to work around the first problem with the club5050/club75/club100, and I believe that's having a positive impact on powering up. But a potential problem with that is that when people build to a certain point, a percentage are likely to "defect" to the camp of the "smaller large stakeholders" that you describe.
This may be right. Maybe solving this would go a long way towards realigning incentives in a healthier way.
One of the things that JS suggested when he first bought Steemit was to bring in some influencers, which might have helped with that challenge. Of course, SteemExclusive content would be best, but even just making some agreements to mirror twitter/medium/substack content from some influencers might help with that. For an example of that (regardless of political opinions) just look at how well Trump's mirrored content does on some of the platforms that host it.
In the simplest case, I have wondered for a while why JS and the Tron Foundation don't post here first and then mirror to Twitter and Medium, or at least mirror their content here. (off topic, but there's probably even a psychological impact on the market from the fact that those accounts' Steemit wallets are basically empty.)
I suspect the way the split went down, and the way that the Hive side seemed to get the better of the PR war (at least in English-speaking media) has left Steem in sort of a "benign neglect" state. It's probably not worth it to JS or Tron to make an effort to be associated with Steem when they potentially have a pool of committed, social-media-savvy enemies waiting to pounce.
I go back and forth on that. I'm mostly inclined to agree, but there are some things that make me wonder. Among other things, someone must have spent a lot to plug the TRX rewards into Steem; and also, Steem could still be a nice complement to their other properties. Connecting Steem with embedded DLive videos and BTFS for image storage could be a force multiplier for all three. In reverse, Steem could also carry comments in the Dlive app to provide extra rewards on the DLive platform. There is a lot of untapped potential there. It's just hard to guess from outside.
And back to the bidbot topic, this is interesting: [SteemPunks] The 1st Generative NFTs are coming to Steem!.
So on one hand, upvu is subsidizing all this vacuous content on the chain, but on the other hand, they are also innovating. On one hand, this seems good, but on the other hand, I suspect it's going to subsidize even more vacuous posting.