There's much discussion about "fair distribution" in many cryptocurrency projects, whether they are Proof-of-Work, Proof-of-Stake, ICO/IPO'ed, premined, etc etc.
The issue has also been raised for Steem, especially since the vote weight is directly correlated with the amount staked (Steem Power). I've been discussing this in the comments of the various articles and there are two points that I have to write over and over - so, hopefully, I'll write it down once and use it as a future reference.
There are two main arguments:
1. "Voting is unfair - someone has 50 votes, another has 5, the first has 0.01$ the second has 400$"
The concept of money-backed-voting (putting your money where your mouth is) prevents the phenomenon of fake votes. It is very easy to forge votes in the online world: You just create multiple IDs and vote the same thing. The process can be automated (bots) with high efficiency. Taking this into account, Steemit has solved this issue by requiring money-backed-votes. Spammers can create 500 fake ids for upvotes and yet their votes will remain worthless if there is no Steem Power (=money) backing these votes. This is a revolution in terms of online opinion measuring reliability, whether we are talking about online polls, online voting, etc etc.
Interestingly, similar suggestions of money-backed-voting had appeared last year during the "blocksize-debate" on whether the BTC-economy was in favor or against a fork. Some were arguing based on online polls and internet discussions, others were saying "let's see who supports what by signing with our coin holdings".
Returning to how Steem operates, it should be noted that if the votes weren't backed by money, content creators would be saying "oh this is a rigged game, those with most bots and fake-IDs get the most money". It would be a highly discouraging and unfair playing field that promotes scamming.
Having said that, is "whale voting" better? The answer is yes. Is it an optimal system? Not by any stretch of the imagination. Isn't there discouragement when people don't get "whale votes"? The answer is yes - and it is dangerous if we have payouts of 0$-0$-0$-0$-0$-0$-0$-0$-0$ and then one 20k USD payout because it just so happened that 20k USD guy was on a whale watchlist...
Can the current system be improved significantly? It's up to the curators to do a better job. Now, if they are not doing so it may mean that a few tweaks in the incentives might be needed in order to alter their behavior towards a more favorable behavior pattern that is better for the ecosystem.
2) "If coins were better distributed, everything would be better"
I don't disagree with that but my question to the above rationale is "for how long can this state last"? There is a misconception that there can be a fair distribution of any cryptocurrency token system: It only ever accounts for the very short-term. The mid-term and long-term distribution will tend towards real-life wealth distribution where we have phenomena like 8% of the population owning near 83% of the world's wealth[1].
The basic problem lies in the "substrate" of the fiat money and asset world. It is the inequalities at that level that prevent fair distribution in cryptocurrency.
The poor have too low an income for their needs and the rich have an excess supply of money. The first group sells their reserve assets to survive, the second group invests their excesses in whatever they can, including overpriced assets (luxury cars/villas/jewelry), art pieces etc.
It is precisely this fundamental difference that creates inequality in all fields, including eventual cryptocurrency-distribution. A poor man will have to part with his coins because he needs to cover real life needs. When the price rises 100-200-300% he will be like "Oh God, this is the best thing that has ever happened to me". When he sells and sees the price going up another 1000% it will be unfathomable to him how that can happen. But that's because his reality is much different than the rich man who can throw a few millions as "investment" with his "excess" money - which he probably made off another ...investment.
So as time progresses forward, and assuming an equal initial distribution of a cryptocurrency, there will be many that sell and few (with big money) that can take large pieces of the pie as the smaller stakeholders cash out. The concentration levels will -in the long run- typically reflect the level of concentration of wealth in the other fiat/asset markets.
"...Ok, I hear you, but what is the solution?"
Did I say that I have a "solution"?
As can be understood from what I've already written, any "fair distribution" in the cryptocurrency level is not sustainable in the mid/long-term due to the fiat/asset wealth inequalities influencing the cryptocurrency market. Anything sort of a radical wealth redistribution in society will not change that. And even then, such a redistribution will only be short-lived as long as the mechanisms for wealth concentration are in place:
Fiat money / debt-backed money and governments being controlled by certain "interests" are two of the biggest redistribution mechanisms in favor of the Elite. To counter these two problems it would require a Gold/Silver monetary system (some would disagree - but that's an entire discussion unto itself) and a way of governance that is exercised with less representation and more direct citizen participation. But, again, this is beyond the scope of our current discussion...
Relevance to Steem
Steem already has a high concentration of wealth in a few hands, but the ownership pattern does not reflect the actual wealth (fiat/assets) owned by the market players. This means that those that hold a lot of Steem Power are not necessarily "filthy rich" in terms of fiat or assets. Assuming Steem is successful, alive and kicking in the mid-term, the long-term convergence with the global wealth distribution pattern will necessitate significant transfer of Steem tokens from the current top-owners to rich investors and funds.
In the meantime a lot of new entrants and authors will be climbing the ranks through their earnings while smaller investors might want to enter with moderate stakes - and they will get the most bang for their buck when Steem price is down. So, overall, this means that the situation with Steem distribution is very likely to improve considerably with an increased number of participants holding smaller stakes.
[1] https://en.wikipedia.org/wiki/Recent_Distribution_of_Wealth_in_the_World / Pyramid of Wealth