My past three posts have been focused entirely on political philosophy. Unfortunately, many readers seem to think I was talking about Steem and started jumping to all kinds of unfounded conclusions. Today I would like to actually express my opinion as it relates to Steem.

Ying and Yang

All games require balance. An unbalanced game will eventually collapse once a certain strategy takes over and ensures a certain behavior unchecked profits. Steem was designed with down votes on posts (flags) as a means of keeping a certain kind of bad behavior in check.

Objectively Bad Behaviors

As someone who holds to a subjective view of reality, I like to refrain from making absolute value judgements. I also want to avoid pushing my value judgements on other people. So when I talk about objectively bad behavior I will do so without respect to the nature of content or individual voter’s opinions.

The goal of Steem is to reward users proportional to the value they bring. An objectively bad behavior is one where a user manages to get large rewards while providing others with little value. Unfortunately, value is subjective.

While it is hard to differentiate the relative value of two different things, I think something objective can be said for something that provides no value. If we assume that all information has some positive value, then the lack of information has no value. People casting votes communicates information. Every post with unique content contributes information. The value of the information provided is subjective.

A voting robot that votes “randomly” provides no new information. A poster that publishes “random” content also provides no new information. It is all noise. Some people might even say that by increasing the noise floor this kind of behavior consumes resources and destroys information and therefore could have objectively negative value.

What we can conclude from this is that “objectively bad” behavior is any behavior that can be automated using unsophisticated software and which yields the individual oversized profits.

Authors Paying themselves for Doing Nothing

This type of behavior has one user sucking value from the whole while providing no new value. Generally speaking, this kind of behavior is discouraged by the n² rewards curve. The rate of return for self-voting on garbage post is so low for most users that it isn’t worth the effort. This reward curve forces collaboration and collusion to actually get meaningful value out of the platform.

A whale is a collusive group. This means that a whale has enough stake to earn a huge profit by voting on their own post regardless of post quality. The only thing that keeps whales from frivolously voting on themselves is the potential to be down voted by other whales. This creates a check and balance at the highest levels which protect the system from abuse.

Curation Rewards for Doing Nothing

This type of behavior is when a whale creates a bot that simply up votes everything from reputable users regardless of quality. This kind of behavior can be countered by other whales only by pushing the author rewards toward 0.

Suppose a post is sitting at a $100 pending payout and a whale up votes it to $1000 with a single vote. Other whales see that as abusive and place a counter acting down vote restoring it to $100 pending payout. The abusive whale will get the vast majority of the $25 curation rewards on that post.

When it comes to curation rewards the system is currently unbalanced. There is no way to negate the profits of abusive curators.

All Abuse is Exercised by Voting

Authors cannot abuse the platform (except by spam). It is only the voters that have the power to be “good voters” or “bad voters”. Rather than placing biased terms of “good” and “bad” I will simply assume “red” and “blue” voters. Neither red nor blue are deemed to be good or bad, they simply have a difference of opinion on where funds should be allocated.

The Steem community is continuously deciding where to allocate money. Every voter “owns” a part of the Steem network with a long term vested interest in increasing its value.

Upvote Only Economy

For the sake of simplicity lets assume budget items are voted on one at a time. The amount something gets paid is based on how many voters vote. Lets also assume there are only two options for voters, “YES” or “ABSTAIN”. Under this model a whale is granted unchecked, unilateral control over a large fraction of the budget.

The financial incentives for a whale in such a position is to embezzle as much money for personal profit as he can without killing the goose laying the golden STEEM. So long as the rate at which is stake grows is faster than the rate at which the STEEM pie shrinks, his own personal net worth will grow.

A malicious whale (hacked account, hostile takeover, etc), would short STEEM on the market and then vote to give himself as much as he could. The STEEM he gives himself can be used to cover his short position and he makes a huge profit off of the demise of the platform.

Up and Down Vote Economy

Under an economy with both up and down votes things are different. Each time a budget item is brought up for vote the voters have three options: “YES”, “NO”, or “ABSTAIN”. Under this model anyone who votes money to themselves without providing value to everyone else will be countered with an equal or greater number of “NO” votes. The system is balanced. Misallocation of funds can only occur if voters collectively allow it to happen.

Curation Rewards are an Up-vote Only Economy

Someone who up votes anything of value beyond what it is worth earns guaranteed curation profits unless others down vote the post below what it was worth. This take value away from other curators and authors and gives robotic whale curators a unchecked easy path to profit.

The abusive whale up voter is not only gaining profits, but denying others the opportunity to earn profits by forcing them to use down votes.

In other words, there is currently no way to “down vote” an “up vote” and therefore, the system is unbalanced and subject to abuse.

Removing Down Votes from Posts

Authors get offended when their post gets down voted. This is an irrational, but understandable human reaction. In reality what is going on is a disagreement among voters. Some voters think the post should be worth more, others think it should be worth less. What if we removed the option to down vote a post?

What if instead of down voting a post, you could down vote a voter? When you down vote a voter you nullify their voting power with your own voting power. It is the moral equivalent of casting equal and opposite votes on every post without offending the posters.

Under such a system authors who vote for them selves and curators who vote robotically would be negated. Only those who vote responsibly would remain. Voting spam would be eliminated.

We have the potential to completely change the game by changing the question we ask. Instead of asking whether the author did a bad job, we can ask ourselves whether the voters did a bad job.

Voters that vote poorly will kill the platform. Voters who vote well will help the platform grow.

Summary

There are many issues left to explore. People will not like having their vote canceled any more than they like having their post down voted. Curation rewards still favor those who use their power to vote over those who use their power to cancel other votes.

Bottom line, a system of only up votes will not work. The game needs to be properly balanced or someone will be able to exploit the rules for undeserved profits.

More to come in a future post.