Why Steemit Inc. Doesn't Call Out Bidbots...

The Comment That Became A Post...

The reason why Steemit Inc. doesn't call out bidbots and seek to nip them in the bud is because they understand economics. They understand that bidbots were a pleasant surprise, and Ned even pointed this out in a video recording. It is an interesting new form of business model that requires the buying of a large sum of STEEM and staking it.

I sincerely doubt that the majority actually do want bidbots removed. I hear the word "majority" a lot from what I bet is actually the loud minority. And even if the majority do want bidbots gone I bet they would regret that decision the moment the bidbots left.

Why? Because in all likelihood your STEEM would be worth much less. Contrary to what some might try to tell you, upvote services are not causing downward pressure on the price of Steem, they increase demand. This is because the bidbot businesses are a big part of the demand in today's STEEM demand/supply ratio.

In the end of the day, nobody cares how much STEEM they get, they care how much Steem Backed Dollars they get. SBD depends on demand for the STEEM supply and this means that long time stakers, like businesses, help increase the amount of SBD you can get from upvotes. In other words, upvote services and other organizations buying a lot of STEEM and powering it up are the ideal users.

Want your STEEM bags to go to the moon? Then encourage more people to open up shop as upvote services. They don't have to be "bidbots" but upvote services of all kinds, be it contests, not-for-profit organizations like @ocdb and also the for-profit ones. Why? Because they buy a lot of STEEM and then they lock it up as SP for a very long time. That is very good for the price of Steem Backed Dollars.

Upvote services are not expensive, usually they can even get you more STEEM than you had originally, so its kind of like paying for promotion where you get all the money back... Cool right? Totally...

On top of that, not only is the bidbot's STEEM locked up, but the people using those bidbots are locking up STEEM too! That's right, they are locking up STEEM because they have to go buy STEEM and pay the bidbot, and they have to wait 7 days to only get HALF of the STEEM back! Let me show you with some math how this works...

Let's say your account is set to get rewarded in 50% SBD/ 50% SP, well that means that when you send 20 STEEM to @rewardpooleater you get an upvote of 27+ STEEM which will take 7 days before you get it. However, when you get that 27 STEEM (-25%) it comes out as 20.25 divided between Steem Backed Dollars and Steem Power. Half of your STEEM gets returned to you as automatically staked/locked up STEEM!

This is very good news for other STEEM hodlers, because your liquid STEEM just got cut in half, which means that if you want to promote another post at the same 20 STEEM you're going to have to go out and buy someone else's STEEM. This creates a much needed sink for the cryptocurrency, one that has the potential to become an ever continuous cycle.

But wait!!! Wouldn't the 20 STEEM you spent go to the upvote service and immediately get sold on the market as profit? Not necessarily, because the more upvote services come into existence the more competitive the services will need to become. This means that as new upvote service businesses arrive (after buying a wicked ton of STEEM to power up) the original gangsters will need to offer something the new guys can't like MORE POWERFUL upvotes or more lucrative ROIs to their customers/users.

No, Steemit Inc. does not want that to go away, because they're not stupid. In an industry where everyone is making a coin/token and everyone else is asking what their utility is, STEEM actually has a legit utility in the real world: promotion. Another token also has that same utility and its called the Minds.com token, but that utility is quite centralized.

Steemians should be quite proud to say that the promotional utility of STEEM in the form of upvote services is decentralized, because anyone can offer the service by buying up STEEM.