"So ….. is it time for official moderators for Steemit? Maybe I am missing something here" Yea, you are missing something, this is a decentralized system, there can not be "official" anything. The closest thing we have to official moderators would be the @steemcleaners team.
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Well, technically it is supposed to be a decentralized system, but in reality I do not feel that is all the way true. I don't think that Steemit can be considered a true decentralized system when the fate of the many is determined by the few (the whale system). Sounds to me like a fragmented government. But I digress, I really enjoy this platform. I will check out the @steemcleaners team!
At this point there is only really moderation against spamming and plagiarism. The bots don't flag (I speak of Cheetah) but it is easy to see how a whale with a pleasure in fighting this would be pleased to pin the flags in them and let the air out of their reputation. Once a rep score falls below zero it is actually hidden from the feed, unlike 'muting' does not actually do (I realised that the mute button could also activate the 'fold' button on the right of posts too, instead of disappearing it. This automatically folds every branch of the thread tree underneath it.)