The ongoing battle between the Steam community and Tron CEO’s Justin Sun’s recent acquisition of Steemit continues to rock the cryptocurrency community and divorce is no longer just feasible but has become a reality.
The announcement at Steempeak:
“Hive is a passionate effort, created by a large group of Steem community members who have long looked to move towards true decentralization and to help develop the codebase. The years of distribution issues and reliance on a central entity for code and infrastructure has been at the heart of a revolution of sorts, and the new Hive blockchain is the culmination of stepping up to meet the challenge of returning to shared values of protecting and celebrating the vibrant community that has grown around our ecosystem.”
“The intention of this community-driven fork is to support and build on the strong Steem community values that have made our ecosystem so diverse and exciting. This new direction steps away from the burden of the Steemit Inc. ninja-mined stake, which has impacted the long term ability to work towards further development and decentralization for years.”
“Hive has begun with a talented and committed team of community developers who are already paving the way to implement much-awaited improvements and robust new developments to the blockchain. It is exciting to see the community – from devs and business owners to passionate end-users – stepping forward to embrace and contribute to the potential of Hive. This renewed spirit, combined with a renewed codebase and a focus on working more closely with the entire ecosystem, is key to the success and possibilities for the future of social blockchain.”
It was inevitable as Tron CEO Justin Sun’s found that the real cost of purchasing Steemit was a mutiny of developers – all of them – and a project little intellectual property or branding of any value left.
How it played out
On December 5, 2019, Sun says he has completed two acquisitions and has plans to acquire Steemit which gives him access to a large amount of pre-mined coins that were held by the founders and only to be used to help fund community development and not to use for vote staking, witnesses and content.
On February 14 2020, on Valentine’s day, Sun announced the acquisition of Steemit to users of the Tron platform. This was greeted with extreme concern by the Steemit community, pushing them into action. They say this shift would have had an effect on Steem’s current governance model which allows users to vote with their tokens and have control over the network. Originally, the acquisition was intended to strengthen both blockchain platforms and create a better experience for Steemit users. From the start, it was clear that Steemit community was not happy with potential changes that the acquisition of the platform would bring.
As a side note, all the above is one reason Steemit got sold to Justin, to begin with, in the opinion of Blocktrade:
Founder Ned (Scott) has dealt with Steem long enough to know that he was unlikely to extract the value just by dumping it and he didn’t have a plan for how to profit by using it for development (he tried that and failed already). So instead he sold the company for less than half the value of the Steemit stake and was happy with the deal.
On February 24 2020, Steemit consensus witnesses’ team up and executed a reversible soft fork to freeze Sun’s tokens (73 Million Steem = $16million) and not allowing him to take control over the network. Many in the Steem community continue to state their decision to implement a soft fork that blocked Sun’s funds is merely a reaction to what they consider is a hostile takeover. To further justify the fork, the Steem community refer to a ‘verbal’ agreement with the Steemit founders that they would never use the founders’ funds to influence the future of the platform, adding that Tron would attempt to influence Steem’s blockchain.
On March 2 2020, Sun said he was being hacked and worked with several centralized exchanges including Binance, Huobi, and Poloniex to use the Steem Tokens stored on those centralized exchanges. This resulted in Sun powering up to take over the top 20 witnesses and hard fork the blockchain. And it also resulted in heavy criticism from parts of the crypto community over the exchanges getting backing Sun in a highly controversial situation. They used the private keys of their own clients to deal with an issue that was not totally clear.
Blocktrades previous writing at Medium stated:
“At this point, it seems like most of the community is in agreement on one thing: they don’t want Justin Sun here. The primary disagreement seems to be how to achieve that. From what I’ve been told, even Justin himself has said he doesn’t want to be here. He just wants to get paid to leave.”
“…Steemit Inc itself has no community to support the value of a coin it controls: the only community here is the Steem community, not the Steemit community, and it mostly wants nothing to do with Justin (some are even willing to pay him to leave).”
On Friday, the community will rebrand and launch a new token – a hard fork of Steem and will airdrop to the Steem community without airdropping to the Steemit stake. Hive will keep and maintain all the communities’ transaction information, posts and Dapps support will remain.
More from Blocktrades:
“I believe all the economic value will move to this new chain and the chain with Justin’s stake will ultimately just die. He can keep his chain running for a while, trying to find uninformed people to sell it to, but it’s not going to last long with no devs, no real plan from Justin on how to keep it alive, and most of all, no community to support it.”
“In other words, I believe the value in your existing Steem coin account will migrate to a value in this new coin. And I believe the value (i.e. the price) of the existing chain will just drop as Justin dumps on that chain.”
“I see this as a big win for the community and particularly existing Steem holders, as we free ourselves from an entity that has just been dumping on us economically for a long time, without properly returning that value with enough technical development or publicity.”
“Another cool thing, from a marketing perspective, is we will be a literal demonstration of how a community is what gives a coin value. We should make every effort to capitalize on this in cryptocurrency media, just as we’ve done so far in our DPOS vote fight with Justin.”
Sun released his own opinion two weeks ago on the official Steemit Blog:
“Originally, as the core development team behind the Steem blockchain and key contributor to the ecosystem, Steemit used their stake for the continued development of the Steem blockchain, onboarding users, and not voting for witnesses. The TRON Foundation is committed to add value and grow the Steem ecosystem and intends to use part of the Steemit stake for such executions. With that in mind, on February 13th, both TRON and Steemit planned to meet to discuss the future road map, with respect of the Steem community. Unfortunately, the Witnesses’ decision created a need to reclaim the stake and vote in new witnesses to usher in new policies for a healthier ecosystem and community.”
“Soft Fork 22.2 was maliciously structured, intending to freeze a handful of very targeted accounts and taking away their rights and possession to their owned asset, and may be deemed illegal and criminal. The group behind this could essentially do this kind of attack to any Steem community member, on any terms they want. They even threatened to a hard fork, and nullify all existing STEEM token, putting every good STEEM holder, developer and community interest at danger. This is very much against every aspect of the original purpose of decentralization and the core value of the Steem blockchain and community.”
At the end of the day, it’s a complicated situation – but what it does prove is that strong communities in the blockchain world can not necessarily be owned and sold like cattle. On the other side, it also pokes a hole in Proof of Stake (POS) where power is in the hands of the token holders and used for malicious purposes can be dangerous for a community. This means POS community tokens need to be well distributed and not controlled by a few parties. The exchanges getting involved also shows how politics can play out the crypto world and adds a new layer to the problem.
For all this to happen in a global coronavirus crisis makes one look deeper into how we actually operate in the real world in terms of power and the very structure of society.
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Also published on Medium.