First, don't retaliate by flagging back someone who flagged you. That only ends in a vendetta.
Second, it is a waste of time to endlessly discuss flagging because the people who do it won't change their behavior. They do it because it makes them feel big and powerful, or because they are trying to intimidate someone into silence.
Third, what needs to be done is to contact Steemit developers directly with this information and pressure them to disable the option, or redesign it in a way that limits the possibility of abuse. If you dig hard enough, you can find an email contact for some part of the the steemit development team.
Lastly, when children go around beating each other on the heads with their toys, the adults take the toys away. The steemit developers will have to play the role of the adults here, and take this toy away from the people who abuse it. The rest of us won't miss it, since we don't use it.
I sincerely feel for you, because the only reason I came on to steemit was in the hopes of earning a bit of cash to help foot some massive veterinary bills. I've been flagged by a-holes for no reason too. This has to stop, or steemit will go down the toilet, and the developers need to be told what is going on, and provided with evidence.
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One thing that could help is to perhaps limit someone ability to flag to one post a week, or make it so only one flag a week actually count regardless of how many flags they throw? Maybe having a report showing top flaggers and possibly having the developers create a way to have excessive flaggers flagging ability suspended for X period of time? I don't know just some thoughts, but maybe it wouldn't work due to bots.
I agree. But.... We need to get the developers involved. I had the crazy thought of even starting a 'community' on discord about this issue, and ramping up the pressure on Steemit developers that way.