Steemit reputation is based on how people vote for you. It can be destroyed by flagging. You don't gain any extra privileges for a higher rep, but maybe you should. If low rep accounts couldn't post as much it would reduce the spam.
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Agreed, it was not the best example to compare reputation and level, since level usually can't be downgraded, but yea, either reputation should have more abilities or there should be implemented another quality for a user which would decrease spam.