Just imagine, in a few years from now, an army of 20,0000+ Legendaries posting just stuff like "Bitcoin soon moon luckily, if not dump" and "why do you bitcoin?".
That is a point either missed, or realized all too well by all the people whining about ranks being “frozen”. The majority of current users should never advance much (if any!) in rank. The merit system will facilitate the natural advancement of good users who have something to contribute, theymos’ “ideal new user”, whilst keeping all the numerous and prolific “Bitcoin soon moon luckily, if not dump” posters “frozen” at Jr. Member or below until mods can get around to nuking their accounts.
Currently, as far as I know, there are a bit more than 50 sources or so. My sensation is that for a forum with tens of thousands of members, this could end up being largely insufficient, unless each of them had so many sMerits to distribute, that they would be enough to ensure that the overall circulation would keep going. This actual lack of supply of new sMerits is leading many people not to spend the few they have been given initially, which is also bad.
I presume that “sources” must be the types of community leaders who treat the forum as a full-time job. That is, the types who not only write many posts, but also
read many posts. A relatively small cadre of such people should be able to distribute relatively large amounts of merit to a relatively wide selection of excellent posts. From there, well—have you ever played “six degrees” style games? I think every single post on this forum is read by multiple people whose posts are read by multiple people... whose posts are read by one or more “sources”. The merit should flow from sources outward in ever-wider circles, as ripplings from a pebble tossed in a pond.
THE UGLY
[...] The stupidest of them have already been caught sending the sMerits to their own alts and getting red trusted for that. [...] And then there will be the beggars. Merit Begging has started in the very fist moment the new system has been enforced.
Given the damage of red trust, abusing merit (including begging) is now a most excellent way to risk totally destroying your account. Within the past few days, I myself witnessed up close
the permanent demolition of a “Legendary” account which got caught merit-farming. (I must observe, it was the account of a user who self-evidently never would have reached “Legendary” status under the merit system!) I’ve also been actively tagging users who beg for merit. So yes, people try to game the system; and some of them will get away with it
for awhile, just as street criminals tend to get away with it
for awhile. Such people’s luck always runs out at some point.
You can do it openly, you can do it in a more discrete, almost implicit way, and you can do it just by trying to please the big holders of sMerit, by telling them what they want to hear and just hoping for their mercy - in other words indulging in that ancient human habit commonly known as "buttlicking". I am afraid, one of the prices to pay to try eradicate one annoying form of ugliness - that is shitposting - is that new form of ugliness would make their appearance in our space.
Excellent observation.
That is a bigger problem, and especially so when tied to existing rank. I have been pointedly ignoring many low-ranked accounts which are transparently obsequious in their behaviour toward others, and
especially in their effusive praise of the merit system! Yet I question whether I may have been much more subtly taken in by some highly-ranked accounts operated by intelligent individuals. Part of the problem may be that as a newer user, I naturally grant some deference in assuming the best of people who appear to have well-established reputations. I will try to be more watchful about that.
The outcome of a merit system turning bad would be a kind of "feudalistic" Bitcointalk, were the rich sources of sMerit would live surrounded by courtiers doing their best to curry favour with them. Let's hope we don't turn to the dark side...
That’s a bad analogy. The feudal system tended to succeed in proportion to the merit of the nobility,
including their resistance to the wily inveigling of flatterers. Those who embrace flatterers always do so at their peril.
Historical discussions are off-topic, so I will leave it at that.
Now for one thing you left out of “the Good”: People who work hard on their posts can feel some appreciation!I will here speak to my experience. It is not unreasonable to suppose that other good posters have had similar experiences.
I work hard on my posts. I did that before the merit system, and I do that now. Some of my best posts take hours for writing, editing, proofreading, gathering links, etc., etc.
Many of my posts get few replies, if any. I don’t expect
and don’t want any replies which simply acknowledge my post, adding nothing else. Thus before the merit system, I was oft left to wonder if anybody found my posts useful—indeed, whether anybody had even read them.
My first notification of the merit system came when I logged in 29 January after a few weeks’ absence, and found I already had 17 merits for posts I made in December. It felt good to know that somebody, somewhere sufficiently appreciated my posts to remember them for tribute a month later! Since then, I’ve enjoyed watching the merit trickle in whenever I make a post which people find valuable.
It’s not an ego boost. I don’t need that, and am not susceptible to it. I don’t need praise. What I do need is to know that when I spend hours of my time making something to give away freely, it is found by others to be useful and valuable. Otherwise, it feels like expending effort in vain, without purpose.
The merit system rewards good posts. People are placing far too much focus on what it does to people who don’t earn merit, and the negative necessity of stopping garbage posts. Look to the positive purpose! Look first to the encouragement this system gives to good posters!
But I would like to add some more. 
