Extension of last post: https://steemit.com/flag/@edicted/the-trolls-will-make-us-rich-but-at-what-cost
Phase 3: Profit
How can we profit off of flagging? Well, actually, we don't have to do anything. That's the beauty of it. Every flag recycles stake away from not one but two people. As long as you aren't getting flagged more than the average person you'll automatically benefit financially from flags being issued on the platform.
Theoretically in a flag war-zone we could stop trying to receive rewards by posting, and simply sell our vote. Then it would be impossible to get flagged. Obviously this is totally against the spirit of the platform so it's not a great idea, but the option is there. (Not to mention it assumes that someone wants to buy your vote.)
As I've said time and time again, if you don't want to get trolled, then stop giving power to the troll. It takes a lot of self-control to ignore someone poking us with a stick. It takes even more to engage them while maintaining the high ground. However, the payoff is worth the effort.
"That's not what flags are for."
A lot of users make the argument that flags are for this or that. Some say that flags shouldn't exist altogether. Personally, I know that if flags didn't exist this platform would be in pretty bad shape. Proof-of-brain would be completely unattainable without flags.
As far as the other arguments that claim what flags are for, it matters little. Anyone can throw a flag for any reason, and it is this simple rule that makes the system impossible to exploit while still being highly mutable. It's up to us to build up more complex systems on top of this foundation if we want to see less anarchic results.
Virtual flag redirection
This most recent flag-war between 
I'd be more than happy to counteract him with you. But, it seems like you've been contaminated by his infectious greed. YOU are the hyprocrite. Also, your flagging and demeanor has been nothing but toxicity lately. Either I flag you, or him. I'm done letting these problems fester.
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What if I (or anyone really) created a dumb contract that allowed two people to virtually flag each other but redirect those flags on the blockchain to a mutual enemy?
Two users on bad terms could increase the power
of their stake by utilizing such a contract.
For example:
#virtual-flag
#target$100.00
Such a contract would imply that if
Still, the blockchain is immutable, and a nothing stops a valid reputation system from going into the past and seeing that someone broke a contract. When you say you are going to do something on a blockchain and break that promise the transparency of that betrayal is evident for all eternity.
Also, both Bernie and FTG are programmers and use a bot-net, so it would be pretty easy to set up something like this in a very low-risk fashion.
Crunching the numbers.
In the case of
If they both agreed to the contract they would both lose $50 and
The contract could even be nested to include
#virtual-flag
#target #virtual-flag
#target$200.00
This contract states that FTG will flag Bernie for $50 if he doesn't help him flag
Mutually Assured Destruction
It is with a system like this that whales who don't even like each other, possibly even hate one another, can organize to clean up the platform for the good of everyone.
Honor System Fail
Proof-Of-Brain is an honor system. We have to trust that users with stake are going to upvote the highest quality content because ranking content is totally subjective. Honor systems have a way of breeding bad actors. One person realizes it's really easy to cheat the system to get ahead. Other players see the abuser and decide that they will also abuse the system in order to "stay competitive". It's the exact kind of justification we see in professional sports with steroids, enhancements, blood-doping, and all that.
The enemy of my enemy is my friend.
Virtual flag contracts provide a way to form alliances with the intention of cleaning up the platform. All the parties of the contract have to do is decide that another abuser is clearly a more flagrant threat. Set aside your differences to try to bring an even bigger abuser into the fold.
Conclusion
We can't expect that the platform is going to clean itself up. We also can't expect to gain some kind of 51% majority where more than half of the platform is in agreement. These are unrealistic expectations. However, I believe that a system like this would be able to reverse the domino effect that bad actors set into motion. Instead of a whale deciding they need to abuse the platform because everyone else is, they could decide to flag the abusers rather than get targeted by an entire alliance. What could possibly go wrong? (lol) Let the witch hunt begin!