I just read an article from 
There is obviously a lot of discussion about them and I have been relatively vocal in my disapproval of them as in my opinion, it leads to vast amounts of value being driven toward a narrow and very high point. It seems quite obvious to me why but I could be wrong.
Scenario:
Accounts bid to gain access to a public pool of value from those who already have access. Those with stake.
They bid 100, they get an upvote of 150 out of the pool.
7 days later, the payout is returned minus the curation of 25% (assuming only one voter after 30 mins) this means 37.50 in curation, 112.50 for author. The author gets 12.50 profit, the bidbot gets 100 paid +37.50 in curation.
Each round, the bidbot can increase its value by 137.50 / the voter by 12.50.
They both power up their earnings and repeat the cycle 100 times.
The bot has increased its value by 13,750 / the voter 1250.
Let's say at the start, the bot vote is 150 and it has 10. It allows 10 accounts to use it. In the 100 days, the powered up value is 137,500 / the profit for the 10 users is 12,500. But, the increase in SP means it can now give 80% votes which means it can service 12 users a day and at the 100 day mark starts doing this.
The next 100 days will see a return of 12 x 137.50 x 100 = 165,000 and return 1250 x 12 = 15,000 to the 12 users.
After the 100 days and at the current prices each of the 12 bidders who have added 1250 Steem power have a vote of $0.28 for a combined value of $3.36. The bidbot however with 137,500 from the first 100 days plus 165,000 steem power from the second 100 days has increased its own vote by $68.59.
To have a vote of the starting 150 requires around about 700,000 Steem power which is about $2.3 million worth. In 200 days (only increasing bidder numbers at the 100 day mark) it has added 302,500 steem power with a value of $1 million.... in 200 days.
With the $68.59, it can now service 15 accounts for the next 100 days and add another 206,250 in SP for a combined total of 508,750 and have added $115.25 to the original vote. By years end, the bidbot has doubled its Steem power holdings and can now service 30 bidders with a $150 upvote per day. This continues exponentially.
The first 10 bidding accounts have increased by 4562.5 steem power and now have a vote of $1.03 each. That vote value is of course in a relationship with other voters. What happens when the mega whale bidbots are selling the vast majority of the pool?
Now, bear in mind, the bidbot risks none of its own holdings to do this as its value comes out of the public pool. The bidders take their 'earnings' from that pool to rollback into their bidbot vote. Also, it assumes that those using the bidbots are powering up but perhaps you should check the wallets.
This is with ONE bidbot...
Talk about distribution!!
Oh, you may have noticed something missing from the equations. Quality. It isn't an oversight, quality is irrelevant. All that is required is a mark to vote upon. A blank post will do.
A failure of logic...?
The only reason this system can work is because NOT EVERYONE IS DOING IT which I am hoping this is the reason
Review that process again and tell me how that can possibly end up in a healthy financial ecosystem with fair distribution and long-term potential. Tell me how someone that chooses not to use it can survive. Tell me how the introduction of multiple bots isn't going to drive the prices up and returns down for bidders. Tell me how eventually, the bots won't start to consume themselves until there are super bidbots and eventually a duopoly and then monopoly. Tell me how that is a better method than a government, a bank, a pyramid scheme. Tell me how you can justify that ethically and morally considering the reasons you joined Steemit?
Tell me something... please.
Oh..right... THE SYSTEM ALLOWS IT. Thanks for clearing that up.
I am not very good with numbers so I am hoping firstly you will be generous with my estimations and secondly someone that IS good with numbers can run a more accurate appraisal and model multiple bots, pool size, and value left in the pool for users that choose not to pay for their votes. Perhaps I missed something fundamental about how the system works and what happens in various scenarios but I am still under the potential delusion that this place was meant to be a community of creators. Well, perhaps it is. Wealth creators based on nothing of value, middlemen.
Taraz
[ a Steemit original ]