Well the problem is distribution, so the solution is distribution.

If you start from an invalid axiom, you have no chance of coming up with a solution that solves your problem. The problem just is not distribution. Or at least not distribution in the sense of anything in the scale of the reward mechanism.

I suspect that we would substantively agree that the presence of extremely large stakeholders whose stake actually preexists subsequent distributive cycles significantly and seriously disrupts the process of reward as it is currently defined on the Steem blockchain. That's not to say that there should not be extremely large stakeholders like Steemit Inc., because the system simply wouldn't work without their backing, but having preeminent investors playing semi-active roles in reward distribution with that power scaled by the degree of their investment – that was never going to end up turning up content which is widely thought of as "good."

That's a distributive problem, but it's not the underlying problem here. That is a compounding problem.

The underlying problem is that the basic assumption, that the will of the many is better and more effective at finding what is "good" than my own judgment and that this wider definition of "good" is inherently better and more reasonable than my own – that's a problem. And it can't be fixed by worrying about distribution or redistribution. It is inherent.

I reckon the inflation rewards mechanism enables folks to see the value of their upvotes as 'free money', even though it's not true, and this is not the same in a tipping platform where those upvotes come out of their wallets.

You could reckon that because they do – because it is true. It may not be a truth that you want to be true, but it is an accurate assessment of what is happening. It is "free money," in the sense that it doesn't come from them and the odds are that it wasn't going to flow to them, so it really doesn't matter where they put their votes except in so far as they can steer an infinitesimal part of that reward pool to their own pockets as part of "curation" (which is nothing of the sort, because it is just a betting pool for all the reasons that I've outlined before).

The whole system is a game designed to encourage and drive profiteering because that is all there is to do in the game. That is it. That is the sum total. No other engagement with the mechanism is particularly rewarding. It's worth noting at this point that thanks to the recent HF curve changes, creating content is less rewarding than ever for everyone but a very tiny portion of the user base.

That works out great for the people who see the whole thing, properly, as a voting gambling pool. With a lower volume stream of content, the odds of betting successfully on what other people are going to bet on out of the smaller pool increases significantly.

Let me repeat that for the people in the back may not be paying attention:

Having LESS content on the Steem blockchain on a per hour basis is actively a positive for those who are engaging with the platform as a betting game because it improves the likelihood of their payout.

A cynic who easily believed in the intelligence of others might steeple their fingers and say "all according to plan," but I don't think the folks involved with the design and implementation of the Steem blockchain of that smart. I think it's an unintentional win for them.

The original intent of the inflation pool going to curators and creators on the blockchain was to solve one of the critical problems in cryptocurrency in general, the fact that there is actually no real way to earn money usefully from other people because there is no point of entry except for deliberately and actively connecting to fiat. There's no way to earn a living because nobody has it. Content creation and curation were intended to be the on ramp for that kind of value.

It failed.

However the median payout on a post is about 1500% lower than the average, because some few posts are manipulated by stake so that profit from them is sucked into the wallets of whales, and this is a lot of the reason for dismal user retention, and failure of the market for Steem to grow.

And here you betray a misunderstanding of your own point.

Yes, "free money" from the inflation pool was a pretty brilliant marketing strategy, but not because it was going to reward the day-to-day content creator. It was deliberately and intentionally created to draw whales, because of exactly the point you point out. Having money locked into the system (Proof of Stake) gives you more opportunity to work the system to acquire funds which make the investment worthwhile to have made. Remove the ability for whales to get a commanding payout from their sunk investment and you no longer have whales. As a side effect, you no longer have orca, minnows, redfish, plankton, or the rest of the ocean because whales are funding the water.

That's the nature of the world. That is why there are whales functioning in our ecosystem at all. They are present because they believe they can make a profit from the natural functioning of the architecture. If they can't, they go elsewhere. If they go elsewhere, the whole thing collapses because there is literally "no there there." There is no inherent value being generated by the platform to its user base beyond the speculation on the betting pool.

And that goes back to my original point – that there is no Proof of Brain, there is no Wisdom of Crowds, and absent those things being true, because the platform itself ignores the individual contribution, because all he cares about is the aggregate, there is no advantage or value to the individual contributor and they have no need for the platform.

None. Even negative value, if you think of it as sinking your time and effort if those things have value themselves.

Now, it's easy to imagine a system in which that's not true, in which individual contributors receive value from the functioning of the system even if that value isn't fiscally transmitted. All you have to do is look around at every other successful social media platform on earth at this point. Each of them deliver what the users consider to be a valuable service because they provide a connection between people and the content that they want to consume and the people that make that content. Each of them provides inherent mechanisms to make that triad happen.

The Steem blockchain does not, and it goes out of its way not to do so.

Society is the source of value of any money, and user retention grows the size of the market, which enabling Steem rewards to encourage authors has done, and would do again, I believe. Every HF has serially increased the ability of stake weighting to extract rewards, and the price of Steem has serially declined in lockstep with the decline of users as user retention has plummeted in response.

Society isn't the source of value of anything. Society has no will. Society is an emergent property of other things. Those "other things" are individuals. Individuals decide what is valuable to them. When something is valuable to them, individuals are interested in giving something someone else considers valuable in exchange. It is from those decisions, those actions, that society grows. Society does not exist and press itself upon individuals because it has no existence aside from individuals. Individuals choose, individuals act, individuals value. Trying to understand the process by which humans operate by externalizing that set of behaviors is doomed to failure up front.

It is, ultimately, the same mistake as the original designers of the Steem blockchain (as a social platform) made. They believed that there was a crowd to have the wisdom of and failed to note that there is only wisdom distributed amongst "the crowd."

I believe that the ever increasing obsession of the technical team behind the Steem blockchain with increasing the effect of stake is largely because either they or an organization that they are attached to has stake, and everyone involved is obsessed with the idea of cryptocurrency as revelatory technology and haven't really had the experience or the exposure to understand that outside the world of the cryptocultist, nobody gives a rat's ass about Proof of Brain, stake scaling, "curation curves," or any of the other 10,000 useless bits that get inevitably and exhaustively kicked around.

Normal users care about some very paricular things and one those things:

Does this platform provide a useful service to me? Does it do something that I find inherently pleasurable or rewarding because of the dynamic that occurs when I engage with it? Does it make me happy? Does it give me joy? Does it give me the gratification of consistent outrage?

Does it serve a useful purpose?

The problem of the Steem blockchain is that, up front, first and foremost, pretty much everyone involved with it has run as hard as they can away from the fact that it's supposed to be a social media platform. First and foremost. That is its value. When it fails to do that, it doesn't matter how technically advanced or how tightly tuned the rewards curve is. Without it being a useful tool for the users, the token is worthless. Without it being a useful tool for the users, the platform is worthless.

You can't solve a problem unless you address it.

You can't solve a problem if you address something that's not the problem. The problem is not the distribution of funds across the blockchain. The problem is not the fact that there are whales. The problem is not that the ownership of Steem follows a Pareto curve at pretty much every point. The problem is not profiteering.

The problem is that there is no actual value to be salvaged from the system to or from the individual contributor, and so individual contributors go away and do something else. As a result, like boiling water off of a sauce, that which remains becomes that much more concentrated, more obsessed with cryptocurrency itself, more masturbatory, more self-referential, and more driven by the only thing that actually gets rewarded – playing the game of the betting pool.

As a game designer, I've said it before and I will say it a million times more, you get what you reward. You get more users when you reward users. You get more content creators when you reward content creators (and not necessarily financially). You get more content consumers when you reward content consumers. And you get more bots, more people obsessed with playing the numbers game, more people looking to exploit the underlying mechanics, more investors looking for a quick pump and dump, when that is what you go out of your way to reward.

And that's what we see.

No amount of capping rewards on either end will do anything other than make fewer people interested in getting rewarded. I realize that for an aspiring socialist, the idea that all problems can be solved by forcing other people to go along with your monetary policy is a compelling concept, but it just doesn't work like that. We know it doesn't work like that because that very idea is largely what you are complaining about when it comes to talking about HF reward curves.

The problem is not just picking the right numbers and making sure people "don't make too much." That just makes people go do other things. The problem is that they aren't giving individuals what individuals want. Shortchanging the individual at the theoretical advantage of the crowd is the exactly what the Steem blockchain is designed to do. Maybe not intended to do, but definitely designed to.