RE: Bid Bots Demystified and Reasons Why You Probably Shouldn’t Be Using Them

I am testing software that will allow turning auto refunds back on, but in the current state, any refund is a direct loss that comes out of my pocket and not simply returning the money.

It seems people have a hard time understanding it, but everyone is using the Steem Bot Tracker site that shows incoming bids up to the second and down to the $1.

Let's say we can do 100 SBD in bids before we are no longer profitable since most use the site, they will bid to 100 SBD or less as most see it as a cash machine instead of promotion and want to make a big ROI instantly regardless of what they submit.

Say someone bids 50 SBD in that 100 SBD profitability window, and it is an old post that we have to refund. The bid window is already half full, other bidders will stop at around 50 SBD or less thinking the window is full. Then we refund the 50 SBD and have made 50 SBD for that window. We use our $1,000 vote and spread it to all the 50 SBD bids, which gain 200% additional vote due to the reduced bid window.

Now let's say the same scenario, and we don't refund the 50 SBD. We get bids up to 100 SBD or less, our $1,0000 vote is spread to all the users (which get 2x the amount they bid for) and our voting power is spent.

By keeping invalid bids, we don't make more money we just don't lose money out of our pocket.

There are also users exploiting this fact with multiple accounts to get very large votes with small bids while getting refunded on an alt.

We pay more than $60,000 USD in rent each week for our Steem Power, it isn't free. I protect against abuse and users errors costing me money, I had to turn off refunds when the Steem Bot Tracker came out. I am not happy about it, I don't want to keep anyone's money that we don't vote on, but I also don't want to keep giving away money for someone else's mistake.

That being said, I am testing Matt's Post Promoter software that will communicate with the Steem Bot Tracker site and will allow us to do refunds again as invalid bids will not show up on the site as valid bids. I've been running into a lot of bugs and not comfortable switching @buildawhale over to it yet, but I think we are getting close. @ipromote and @upmyvote both run it now and offer instant refunds. Still an issue or two I'm waiting for to be resolved before I cut over a large bot like @buildawhale to it.

Just the other day, the bot failed and I had to refund 80% of the bids manually, some users got 100% votes for 0.500 SBD. All the bots (~15 or more) use the software and they all ran into the issue. The larger bots like @buildawhale, @appreciator, @upme don't use it as even one window like this would cost us a ton of money and a crap load of time.

I'm hoping I can switch soon and refunds won't be a problem anymore for any of us. Prior to the Steem Bot Tracker, I manually handed out over 500 refunds personally. It was never something I wanted to do, but the Steem Bot Tracker created a lot of unique issues as well as significant reduction in revenue. I have always supported and even promoted the Steem Bot Tracker since the first day it came out even though it has a very large negative impact on my business as I welcome the transparency and fairness.

No one ever complained when bot owners use Bittrex to send huge bids to their own bot to anonymously bid on their posts, or using alts to bid on their posts, or using the voting power to self-vote, or even selling it privately. None of these things we ever did or would do without full disclosure.