The truth about Bidbots.

Everybody knows what Bidbots are around here.

If you've been using the Steem blockchain then you are certainly familiar with the term.

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The original Bidbot was @randowhale. It paid out really well, and was actually fun to use because it was like gambling or winning the lottery.

You might get a small vote that was along the lines of the amount that you had already put in, but you also got the potential to get a really large vote.

If you voted like 10 times over the course of a few days there was no possible way not to get a very nice return on your investment.

Of course back then there was a different kind of voting that meant that post gravity mattered. What I mean by that is....a post voted on the fourth day would pay out higher than a post voted on the first day.

Now that we use some kind of linear curve the post gravity no longer matters.

I haven't seen another Bidbot that worked in a lottery type manner.

Nowadays you've got two types of bots. You've got the ones that are actually Bidbots. IE you put in a bid and the bot will vote every 2.4 hours or so. These often have a minimum and maximum ROI.

I don't think they should have a maximum ROI. I feel that defeats the purpose of winning the bid, but that is neither here nor there.

You've also got your instant gratification Bots. These Bots vote nearly right away. We still call them Bidbots even though there's no actual bidding involved with this type.

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Now, I have no opinion on Bidbots. I've used them in the past, and I still use them on occasion.

Some people say that they are hurting the system, and that is actually true if you think about what they're actually doing.

Imagine that there was a game you wanted to buy. Instead of buying it from the store you just bought it from your friend that already had the game.

You gave him money and he gave you a game. The money that was circulating in the system does not get burned. It does not go back to the Federal Reserve and it does not go anywhere.... except in your friend's pocket.

You see, you did not actually buy the game at all. You traded money for the game. That was a trade, it was not a purchase.

That's what you're doing with Bidbots. You are trading your Steem for a vote. There is no money that actually gets burned.

There's no return to the system, or anything like that.

You're simply trading. The fact that Steem doesn't get burned means that the value of Steem does not increase.

Nevertheless, I do see the value in Bidbots. It is more difficult than ever to get your post noticed because there are many fewer people reading our site.

There is another Factor that many people are not aware of.

Let's take a look at my last post. That post has significant Bidbot presence. I spent hours on that post and I wanted to make sure that it got out there.

https://steemit.com/busy/@jeezzle/the-dark-crystal-even-better-than-you-remember

I've been doing movie reviews lately. I'm actually thinking about opening up my own WordPress site and making it about reviews of older movies.

I'm a fiction writer, but I just haven't been in the groove lately when it comes to writing fiction. The truth is that nobody's been reading my fiction, so instead I've been doing this.

So let's take look at the bid amount purchased versus the payout of that post.

At the time of that post Steem was worth $0.32.

I sent 50 Steem to the instant gratification Bidbot called @smartmarket and it returned 36.

14 spent.

I sent 100 to the Bidbot called @smartsteem.

114 spent.

I sent 50 to the Bidbit called @therising.

164 spent total.

$52.48.

Payout on that post is $74.85.

Multiply that by .25 in order to get our curation amount of $18.71.

$74.85 - $18.71 = $56.14

$56.14 - $52.48 = $3.66.

It looks like I made $3.66 on that post right?

That's nothing to write home about, but at the same time it is at the least on the positive side of things.

Isn't it?

Well let's take a look at what actually happened there.

I spent 164 Steem which cost $0.32 per Steem and therefore was $52.48.

If we disregard the small amount of SBD, we get 92.05 STEEM, 92.98 SP

185.03

Multiply that by .25 to get our curation amount of 46.26

185.03 - 46.26 = 138.77

I spent 164 Steem and I got one 138.77 back.

I spent over 18 Steem on that post despite the fact that if you calculate it out using actual dollars it looks as though it would be a positive amount.

Now I have been told in the past that Steem uses something like a 3.5 day rolling average to determine the amount on payouts. However, it seems to me that something just doesn't add up despite that.

That's because $74.85 at $0.32 per Steem equals 234 Steem NOT 185.03.

You might say that's due to the rolling average, but the only way I could possibly see that making sense would be if Steem had been at a significantly different price point during the past 3.5 days.

It hasn't. We have hovered between $0.32 and $0.34 which would not account for a difference of almost FIFTY Steem.

So that's the truth about Bidbots.

It might look like you're getting a positive ROI of a few dollars, but the system is going to pay you in Steem. Is that payout based on a rolling average? Is it based on some algorithm that I don't understand?

All I can tell you is that it doesn't seem to add up.

Consider this. The price of Steem today is lower than it's ever been this entire year.

$0.29.

If I was paid out today then I would be getting 258 Steem for my $74.58.

In order for that payout amount to make any sense, Steem would have to be worth more than $0.40.

Nov. 26 $0.34

Nov. 30 $0.33

Dec. 2 $0.34

Dec. 4 $0.32

Dec 5 $0.29

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That's the truth about Bidbots. You might say Hey, that doesn't have much to do with Bidbots....it has more to do with the way the site actually pays us out.

You might be right, but the way I see it $74.58 does not equate to 185 .03 Steem anyway you look at it.

That being said, I'll still be using Bidbots when I want to promote my post on occasion. I'm particularly fond of some of the Bidbot owners.

I'll be thinking twice though before trying to promote a large post, because there aren't enough viewers on this site to actually matter if your post gets on trending in the first place nowadays, there isn't enough assurance in my opinion that you are going to get a positive ROI based on the way the Bidbot works, and the difference in payment from the dollar amount shown and the actual Steem given is just too much.

It's all enough to make me shake my head and say I don't think so.

That's all for now.