There are people who keep devising ways of raping the reward pool, some of them are whales, really big whales, and they have become untouchable, and a law to themselves... What can one do to such rapists? Flags and downvotes wont work on them... They have too much steem power. If these bigwigs can be humbled to do what is right here on steemit... Then steemit can really attain the great heights you and i envisage for it.

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Great post @troglodactyl. As a relative newbie on here, I have been wondering about what consequences these ponzi style posts bring. If Steemit devolves into everybody trying to upvote giveaway posts at the perfect time, that's just going to cause spam where a piece of original content could have been instead. For that reason I appreciate what you're doing in downvoting these. It's selfless and for that you have earned a follower :). 

On the other hand, I see the sports prediction competitions on here as really fun, engaging content. It is mostly skill-based, and if a minnow wins, it can really give them a boost. This definitely makes Steemit a more appealing place to be. My favourite competition of this kind is run by @costanza, as football is my favourite sport and betting for profit is one of my hobbies. Even if it's not yours, I recommend giving it a try :).

@troglodactyl,

I am sad I missed the opportunity to upvote and resteem this post. You make some very sobering point and Steem is long overdue for a wake up call about them.

I don't think that Steem itself is a Ponzi scheme but it most definitely has Ponzi elements that have been tolerated, nay, encouraged. One such Ponzi element is the bid bot. 

We have fought vote farming together and I have come to the conclusion  that vote selling is merely the other side of the same coin. When I flagged a vote farmer today and was asked the question "What about upvote bots?", this made me stop and really think about it. 

I cannot really make a meaningful distinction between the two. They both divert effective curation. I don't know if this will ever change...

I see, so it very much is so that Steemit does have the potential to fall into becoming a Ponzi scheme if the current atmosphere of circle-jerking continues? I really don't want that to happen, but I also don't know what more the minnows can do to prevent it, other than the fair use of upvote bots, and even then, they are no match for someone like @haejin. (That and I am just kind of morally opposed to them, which probably sounds dumb.) I just want to build this awesome utopian idea of people getting paid for their time, but what Libertarians and utopian idealists fail to grasp in these dreams of the future, is that we can try to change the power dynamic, but the people behind it are still people. The same people that have been coerced, convinced, bribed and bamboozled for millennia. I think it's far too idealistic to expect such a dynamic change from humanity in asking those who have lots of power and money to "share" or to "build". As much as I love this platform, and am willing to give it my all, I can see it easily collapsing due to the impact of merely humans existing as themselves. We can't have anything nice and the world is a toilet. (I am also finding that pain meds make me extremely nihilist and incapable of holding back. Surry bout that.) Thanks for the upvote. It's been a rough week.

Been meaning to respond to this and now I'm able to.  Great post!  

Wouldn't the dividends be paid in the sense of cashing out?  That is what the inflation rate is designed for because the "company" is literally unable to pay us for dividends.

I wonder about the legality of a stakeholder/worker being able to self pay themselves (self upvotes) because what is profit and what is company revenue?

I also wonder about someone being alerted to this type of behavior on the platform can constitute legal action, and if so, how.

I have already seen literal piracy taking place, and as a community, if we don't want steemit to become a ponzi scheme, we have to start shutting those down that are hurting the platform.

People are calling this tactic a witch hunt. *Is it really?*  Do we want to turn a blind eye and potentially lose what could have been something great?

I've been on the platform 2 months now and I feel I've flagged more posts than many whales.  I watch these whales upvote themselves hundreds if not thousands of dollars.  Is it deserved?  Sure, some of them definitely deserve it.

Are they spreading any wealth?  Well, if you're not commenting on their posts or a part of their circle, no.

That's not entirely bad thing, but we are all a bunch of small communities that make up one big community.  If your community is hurting, so is mine.  Even if you don't see the damage being done, or care about it, doesn't mean it isn't happening

steem is not like that steem is the future and proof of stake concept

New money needs to come in daily in order to sustain the price as new steem is created every single day. In that regard it's a ponzi regardless any voting behavior in my view. I don't see it as a ponzi scam as everything is very open and transparant though.

The main issue I see right now is that payouts in general are just way to high not to be abused. 9.5% yearly inflation + SBD at 6.7x the price they were intended to be.

It's not just the false productivity that haunts Steem(it), it's also the ambition by the developers who have much more in their mind and tend to not take care of Steemit in a systematic way. There are also way too powerful tools to destroy users and that are abused by some (-> berniesa). And there are also complexities and uncertainties embedded in the system itself that could potentially harm and destroy the blockchain in the future like the Steem/SBD confusion, the fact of SBD being fiat (and potentially Steem also becoming one).

But so far, my opinion is that there is way too much to lose as that Steem could possibly be written off. The ride it seems is just beginning.

Very interesting point of view, to be honest I have never thought of it like this. Sure, I had some shady thoughts that "wealth distribution" isn't actually a wealth distribution, when 10-20 whales are just upvoting themselvs and their inner circle with huge voting power. 

What is somewhat neglected in our community is the fact that the Steemit community can destroy itself. We already have a great number of issues and the abusive practics used by the biggest stakeholders are only making it worse. If you think about some of the members in our community (who consider themselves deffenders of the future and their values are in line with decentralization) there is not much that differentiates them from the bankers they so desperately dislike. What is difference between paying yourself and your friends 1000$ per post, whilst keeping things off the ground, paying good content creators 5-10$. Bankers do the same with bonuses. 

I think one of the possible solutions is for people like you to actually use their voting power to incentivize minnows, who create good content to continue doing it, until they themselves reach a certain amount of SP. The ideal case would be, if individuals adopt the moral and behaviour of the "good whales and dolphins".

I would like if you can give suggestions, what can we do to improve the community.

As a cousin of Imelde Ponzi, it hurts my heart that our family name is dragged through the mud every time it’s associated with my other, unsavory cousin’s pyramid scheme.

Imelde Ponzi was famous in her own right for her plan of buying farmers’ overripe apples at above-market prices, churning them into applesauce, and distributing the applesauce out for free to local shoeshiners as a nice little break between their swishing and swooshing of the ever shinier shoes.

That’s the *real* Ponzi scheme.

I wonder how long it will be before all the Steemit wealth is consolidated into 5 or 6 accounts.  @ironshield

>Whether it looks more like a productive joint stock company or a Ponzi scheme, because the rewards given to the workers/stakeholders could either be the pay for their work, or the dividends giving the false appearance of profitability. It all depends on how the stakeholders vote. 

What an accurate and wise analysis! I followed your vote on farazahmad's post to here. 

> the stakeholders are split between these two sides

The problem is that many followed the tactic to get more dividends when they found out a whale with huge SP does, instead of fighting for  the better one. I can actually see Steemit is going to a worse one of the two scenarios. 

This is possibly due to human's weakness. For example, many places in this world are bribed and connections are valued hugely. Also flagging someone is difficult to do for some people. You can see this is happening on Steemit. 

I agree with anthonyadavisii's comment, it's difficult to make dinstinction between the two. Will you vote your friends to encourage them, no matter what they write? or not? 

There's a shortage of curators and there lacks competition in almost all the categories, travel, cryptos, steemstem, etc... Why is that? I guess because whales and in general most of the Steemians know they can benefit from fewer competitions here, so will they bother introducing their photographer, writer friends to join?

BTW: I love this post, if it was less than 7 days, I would 100% vote it.

To the question in your title, my Magic 8-Ball says:<blockquote>It is certain</blockquote><hr>*Hi! I'm a bot, and this answer was posted automatically. Check [this post out](https://steemit.com/introduceyourself/@magic8ball/introducing-the-magic-8-ball-bot) for more information.*

Unless there are people like you who put there money were their mouth is it will become similar too one.

Very well written and I love the thoughts behind it. 

Personally I am thinking that the users are ON the block chain and we are the creators not just the recipients mean we are doing the hard work. I think it's a viable and stable community and most certainly not a Ponzi/pyramid or any type of scheme, my 2c though. Thanks for getting this conversation going though.

You bring up some very valid points. IMHO, it is still too early to tell, however if we continue to get large stakeholders circle jerking each other for the benefit of draining rewards then there will not be much left down the line.

I think te community will never be like a ponzi scheme.Because still the people behind this steemit community are people who are really talented and exerting effort to do their  share. I believe in the value of goodness which every individual have, so whatever bad intentions of some people  will not prosper..this is just my opinion:)

Thank you for this fascinating article. The question you pose has crossed my mind several times and I am new to Steemit. I already feel a little disillusioned. I like the free exchange of view and opinions which benefits the whole community.
I used to be  a professional historian and still write articles now as a hobby but am wondering if it is worth the effort writing articles exclusively for Steemit which get one or two views. I still see my job as passing on what knowledge I have which may benefit other people. Is Steemit the forum for this? I am not sure.

Very interesting view thanks. 

I would like to generalize for the whole blockchain community. Every chain is dominated by a few big whales and they are blocking the future of these chains.

And for me the problems of Steem are the ones whole humanity faces. It could be great but people are too selfish.

I'm also upvoting my own comment because it feels stupid not to do it but deep down I know I'm ruining the whole concept by doing this...

I read your post. Interesting spin on this mess. This has been an ongoing problem on the platform, perhaps potentiated by the fact that the value of Steem and SBDs have risen in recent months. There are more eyes on the site and more attention being paid to the blockchain itself.

The recent addition of Steem and SBDs to some large crypto exchanges in South Korea, such as UpBit, will likely sustain the underlying liquidity spurring their demand for the foreseeable future. However, one must realize that the scrutiny of the mechanics of the blockchain itself will grow with increased publicity. It seems that the CEO of Steemit Inc. <a href="https://steemit.com/thisisfun/@berniesanders/6e1n7u-haejin#@ned/re-morningtundra-re-berniesanders-6e1n7u-haejin-20180123t170703459z">is fine with the negative publicity of the whale wars</a> and isn't really concerned about its underlying causes, which are the evidently exploitable deficiencies of the platform itself. This is troubling, to say the least.

I have a small stake here as I was intrigued by the concept when first introduced to it last summer. However, I am disappointed in the lackadaisical execution. Like you, I fear that by the time the power brokers around here finally wake up to the fatal flaws inherent to the rewards system itself, the money flow will have dried up as the broader market wakes up to the flaws as well and the value of Steem will consequently collapse. This recently happened with Bitconnect. I don't want to see it happen here, but it could eventually transpire if substantive improvements aren't made as soon as possible.

And if changes aren't made? Well, a more quality platform will be developed, and the lessons learned from this experiment will be applied to that community and its foundational blockchain. As the Steem White Paper forewarned: "<b>Any imbalance in the give and take within a community is unsustainable. Eventually the givers grow tired of supporting the takers and disengage from the community.</b>"

I absolutely agree with everything written in this post.  

We have platforms like Utopian which is trying to promote a certain standard for a specific niche in the community. Then there are the random whales who only vote up specific tags but they do so in a very indiscriminate way.  I have seen some fairly absurd content go viral in a few days while quality posts have been burred for no apparent reason.   It can be very hard to tell how much of this is due to lack of visibility and luck versus complacency and deliberate sabotage.

Ultimately, I believe it comes down to whether or not a large percentage of the people with power choose to use that power to build something rather then squander their votes on garbage for the sake of getting more power. 

Again, it seems like there's a lot of both on this platform.

If you found this post interesting, you may also be interested in @bethwheatcraft's video on the subject: https://steemit.com/dtube/@bethwheatcraft/32b3kyon

Thankyou for sharing this information, I'm surprised it's only been seen by a couple hundred people but hopefully others like @bethweatcraft are making similar posts. I really want to resteem it but most my followers are newbies like myself and I wouldn't want to drive them away or other negative influences that might happen by sharing this. I don't think I will help any whales see it either. Something tells me though we'll figure it out, this platform is still young and clearly people are diligent and willing to put int he work to 'iron out the kinks' as they say. Cheers!