They are losing even more money than that... You have to remember that not only is the total author/curation pool going from 75% to 65% but that authors are losing 25% of the pool they have been getting. So, in theory the curators were suppose to be getting 18.75% and authors 56.25% of the total reward pool, and after this change it would be curators receiving 32.50% and authors receiving 32.50% of the total reward pool. This means authors are taking a 23.75% loss here.
Sure, there might be way more upvotes out of the deal, but that's a big maybe and 23.75% of the total reward pool is a lot to make up. Not saying it can't work, but its a big maybe, and now there will be a 25% free downvoting feature which means people will downvote for any stupid reason they can think of downvoting for.
Downvotes always just shift rewards from one place to others so they have no effect on the total rewards. If you manage to get fewer than your share of downvotes, even if you still get some, your share of the pool will go up. The idea is that obvious reward milkers especially the larger ones, should be clear downvote magnets, so for most users getting fewer downvotes than they are should not be difficult (unless you are a reward milker).
How effectively downvotes will be used (or even if they will be used) remains to be seen.
I understand the reasons for the downvotes and I respect the goal of shutting down the reward pool milking. My problem with this is that in a future world with Steem as widespread as Facebook it will not be major holders of STEEM seeking to honorably use their stake to keep the network clean and sacred, it will be special interest groups attacking opposing ideologies and effectively shutting down smaller communities.
I completely sympathize with the objective to keep Steem a place of quality material, a decentralized Medium is a perfect future for Steem in my eyes. But there must be a better way than using downvotes, because downvotes bring in a toxic mindset of aggression. When you upvote someone, you effectively downvote all others, but that does not create an aggressive atmosphere.
I'm thinking about the long term health of the internet as a whole. People are already to vicious and rude to each other, but thanks to Steem they will now actually be able to have real power over each other and abuse each other. The vast majority of communities on the planet will be the weak ones that can't defend themselves against large interest groups and better funded opposing ideologies. It will be used for harassment and for the creation of a two cities system on the web like never before.
This is also likely a major liability for the survival of Steem. Yes, I agree with the Witnesses that this will bring in money today, but it could cause the loss of Steem's tomorrow. There has never been a more inappropriate time for a downvoting system, because it is a form of financial censorship (I know no one likes admitting that, but if people are calling Patreon bans censorship, downvotes count too).
We are entering an era of rebellion against Youtube, Twitter, Patreon, Instagram censorship and demonetization. The downvoting system is indeed demonetization and that is exactly what the renegade economy of cryptocurrencies and blockchain are fighting against with LBRY, Minds.com and other upcoming platforms. Steem was suppose to be the father of that ambition for social media, but downvoting is in every way a contradiction to the spirit of free speech and self-sovereign content.
If Steem so early sells its soul to the hopes of lambos on the moon it will pump, but then it will quickly wither and die. I'm sure the founders, witnesses and all current whales have good intentions with their downvote usage, but they will sell off large amounts of their stake when they can, and then the true bad actors will utilize this tool for bad things. Entire communities will rally to harass other communities, which will drive those other communities to fork away just like you see with Gab and Dissenter.
Minds.com, LBRY, Bitchute, Akasha, Gab, Dissenter and many other networks are popping up to fight against the tyranny of the few against the many. Steem was a leader in that ambition, but downvoting is not consistent with that aim. Steem will need to decide what side it is on, because while the stakers of SP may not be the same people as are in control at Google or Facebook, they are still a small number of people giving themselves power over the masses. The masses are done being controlled, and if Steem wants to have a tomorrow, it needs to recognize which side its taking.
I've done no careful examination and calculation of the destination of rewards flagged back to the pool, but since whales get about 90% of the rewards, it's safe to say that the share of even unflagged minnows is far lower than flag resistant whales of that returned stake.
It isn't a lack of VP that prevents minnows from flagging whales. It's retaliation. The downvote pool is going to hugely and dramatically increase censorship. Multiple accounts with no other purpose exist now, and they will hurt more creators with a bunch of free flags. Bernie is gonna go nuts. Reasonable minnows will not suddenly be immune to retaliation, and won't be using their flags to discourage lame content botted up on trending.
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