I've seen far too many folks come to the community and present ideas. All sorts of ideas:

We only let users with a reputation over 70 use the flag feature.

We only users post in certain communities if they're over 50 reputation.

Below 40 reputation, you can only get $10 out of the reward pool.

The common denominator with these posts? Reputation.

Consensus

Blockchains, like a well-run family, are all about consensus. Getting all computers running Steem to agree on the current state of the database is a beautiful thing. Imagine if you threw a party with 10 people. Consensus is getting all 10 people to agree on the events that took place at the party. It's not easy.

This is how blockchains are built. A common set of rules is used to see what is allowed into the blockchain and what is excluded. The problem is, when you try to take action based on information that isn't consensus, it's impossible. If you said to the 10 people, we should go see Pink Floyd because they're the best band, nobody would go see Pink Floyd. The Consensus for the 10 people was about what happened during the party, not about which band is the best. If you try to convince them to go see a band because it's the best, they're going to disagree and not go.

Reputation isn't in consensus

Steem is built in such a way that reputation is not included in the consensus. The Steem blockchain doesn't keep track of reputation at all. Steem reputation is actually a plugin to the Steem program. It essentially just looks at the consensus code (The posts, and how many votes are on each post) and does a calculation on the side. This is an optional add-on for witnesses to run if they themselves want to know the reputation of all users. The Steemit inc computers run this plugin and proudly display it on steemit.com for your viewing pleasure. It's seen as an arbitrary rough measure of one's general writing ability and reputability.

An analogous situation may be at a bank. The official bank database says that you have $100 dollars in your bank account. Your personal bank teller might note that it's actually two $50 bills in your bank account. The denominations you paid in isn't necessary information for the bank to know. The bank teller just knows because he was there when you deposited the money. It isn't actually included in the database of the bank however.

Reputation can not be used to solve your issues.

Because reputation isn't in the consensus, it can't be used to perform actions on the database. You simply can not write a rule in the existing code that says:

"Below 40 reputation, you can only get $10 out of the reward pool"

This is because reputation is only carried by certain people who wish to keep track of it. There is no way to prove that the answer one gives back to you is the right reputation. Consensus data is signed cryptographically and mathematically provable. Payouts, votes, asset balances, memos, all these things are consensus. If you want to effect any of these things using external variables (like reputation) those external variables must also be in consensus. Reputation, on the other hand, is simply meta-data. If you wanted to prevent a payout from happening based on reputation, reputation itself would need to be included in consensus.

Reputation shouldn't be in consensus

Reputation itself (as implemented by steemit) is a bit of a hack. It's just a rough measure of how active and reliable a users is. The measure was conceived by Steemit Inc to give some form of tangible, comparable number to users. The reputation system as implemented now would not make any sense to include in consensus.

Consider a market place and a twitter clone built on Steem. Tonald Drump is very popular on the twitter clone. Many of his posts get re-steemed and upvoted. His reputation on twitter is very high. If Tonald decided to sell something on the market place his reputation would be remarkably high, even though he has absolutly no history of successfully selling on the market place.

The reputation system is not suited for all platforms, nor is it supposed to be. Reputation is meant to be an add-on, not a means to solve consensus problems.

Thanks for reading my post. Nate.