Anyone following me on Twitter has most likely noticed I’ve been blowing up my feed with the #Steem #HostileTakeover. Here’s the story, for those who are interested in what’s got me Twittering like a woman possessed (moreso than usual…lol). Please keep in mind though that in the interest of time, and in an effort to simplify things as much as possible, I’m telling this much in the way I’ve been trying to explain it to my family over this past week. Expect some broad generalizations, sprinkled with bits of paraphrasing, so I can get this posted before another chapter in this Crypto Coup gets written (and since the agreed upon March 6th meeting between Justin Sun & the original Steem Witnesses is taking place as of this very moment, I’m sure there will be plenty more soon).
Pull up and seat & grab a drink
First off, there are lots and lots of posts about this whole situation, by folks more informed than me, so if you’re looking for an in-depth breakdown of events, I highly recommend these recent articles to get you started –
Anatomy of Justin Sun’s Hostile Takeover of the Steem Blockchain by @shadowspub
Steem Community Mobilizes Popular Vote in Battle With Justin Sun by Brady Dale
Tron Executes Hostile Takeover of Steem, Exchanges Collude by Mitchell Moos
Steem Rallies Against Justin Sun’s Power Grab also by Mitchell Moos
However, this is my “normie” (non crypto savvy) way of telling the story, in the interest of making it as simple and understandable as possible. And I say I’m still a “normie” because when I joined the Steem blockchain/platform back in September of 2017, I knew zero about investing, and negative zero about crypto. Over the years, while I’ve studied & asked questions, I still feel like I’ve barely dipped my toe into the Steem ocean, but while I might not know the mechanics, I’ve read & listened enough to hours and hours in the past week alone to feel I have a pretty good grasp of what’s going on.
In the beginning…
When the Steem blockchain/platform first started producing coins/tokens almost four years ago, Steemit was in the unique position of getting a huge head start, ultimately owning upwards of about 41% of the entire supply. Not a good look for a platform touting decentralization, so Steemit Inc put it in writing that they would never use that stake to control the community, or interfere with the running of the community (in a nutshell, the more stake/Steem you own, the bigger your say is on how things work).
Per their announcement on April 1st, 2016 –
The Steem network is live now!
We have secured ~805 of the initial STEEM via mining. Our pan is to keep 20%, sell 20% to raise money, and give away 40% to attract users / referrers.
So kind of like Steemit owned a house, and the Steem community had a lien on it.
On February 14th 2020, Justin Sun (founder of another cryptocurrency platform called Tron & major investor into Poloniex) bought the Steemit App from one of Steem’s co-founders, Ned Scott. Justin also bought Steemit’s Steem stake (reported to be about 74 million Steem coins/tokens). While the staff of nine at Steemit Inc knew there was a deal in play, they didn’t find out even the basic details of the sale until the news hit the internet. There’s some speculation that the deal was sped up because of either a leak to the press, or as an attempt to throw shade at the “Voice” launch (a competing social network on EOS, incidentally created by Steemit Inc’s other co-founder, Dan Larimer) announcement on Valentine’s Day. Either way, it took everybody by surprise, and in the days that followed, Steemians, as well as the staff of Steemit Inc, tried to get answers as to what it all meant.
While there was lots of talking back and forth between the Steem and Tron communities (and for what it’s worth, the vast majority of Tron users I’ve met through this have been wonderful, passionate people), there wasn’t much in the way of concrete information on Justin’s intentions.
How the Steem blockchain/platform decentralized thing works
The blockchain/platform was designed to be decentralized, and so that no one person/entity could gain control. The software for the system is run on servers all over the world, by people called, “Witnesses” – a group of developers, software engineers, app creators, and regular people. To be a witness, essentially all it takes is a server & enough knowledge to implement the code. However, only the top 20 witnesses truly have the power to affect change, and to do so requires a certain percentage of those witnesses agreeing to the change.
Each person in the Steem community is able to vote for 30 witnesses they trust to be caretakers of the system, and the amount each vote is counted depends on how much Steem that person holds. So, if I own 10 Steem, and Joe Smoe owns 5, my vote counts twice as much as his, and if Dan owns 100, his vote is ten times more powerful than mine.
Clear as mud, right? 😝
Ominous actions by Justin Sun
On February 19th, Justin used his Tron stake to vote on two Tron Super Representatives (their version of Steem Witnesses). Needless to say, this didn’t bode well for the Steemit community, so our top 20 witnesses, after many hours of mostly public discussions (for obvious reasons, some details had to be talked about in private), decided to implement a code called a Soft Fork.
What in the fork is a Hard or Soft Fork?
Okay, picture that the Steem Blockchain is a train. It left the station back in 2016, chugging down the track. As it goes along, Steem coins/tokens are popping out of the train’s smoke stack, having been produced in the Steem train’s engine. People along the tracks can collect the coins either by buying them at train stations (aka crypto currency exchanges like Binance and Poloniex – yes, that one that is owned by Justin) or earned by entertaining passengers on the train (creating content like blogs, videos, etc).
When the train tracks need to be repaired/replaced via what is termed a “Hard Fork,” the engineer (the top 20 witnesses) needs to agree with the changes (a certain percent have to vote yes). Next, the code needs to be studied for possible issues, all the train stations (exchanges) need to be notified and give their approval, test tracks have to be put in place and checked, then rechecked to make sure they’ll let the train run smoothly.
Since the Steem train started, there have been over 20 Hard Forks implemented, each taking months and months of coding, testing, and approving.
There have also been many Soft Forks – much smaller changes to the code, designed to address minor issues. Kind of like keeping snow off the tracks so the train can run unimpeded.
So what in the fork happened next?
Because the top 20 Steem witnesses couldn’t get firm answers from Justin and his team, and based on his actions with the Tron Super Representatives, a majority (with a few dissenting voices) decided to put the pile of coal known as the ninja mined stake under partial lock and key. While Justin still owned it, and could still do things with it, the Soft Fork meant he couldn’t use it to make his vote the sole biggest vote on the platform (making him the only engineer the train).
There were actually some discussions about just burning the coal pile completely so it couldn’t be used against the train/Steem blockchain, but wisely (in my opinion), no one wanted to take away Justin’s property. The witnesses were acting solely to protect the Steem Blockchain train from a hostile takeover.
So the Soft Fork code button got pushed sometime on either February 23rd or 24th (depending on your local time zone).
Justin’s response was swift and encouragingly positive. That very same day, he said on social media, and his new Steemit blog, that (essentially) he understood why the witnesses felt they had to protect the chain, he was still trying to figure out how the whole Steem ecosystem worked, and he’d be happy to meet with the witnesses in a virtual meeting on March 6th to discuss how to make everything work.
Cue the hostile takeover
In the early hours of March 2nd, Justin Sun and his Tron team managed to gather enough Steem stake to create 20 sock puppet accounts and vote them up to become the new default witnesses.
How did he do that? Essentially, he misrepresented the Soft Fork code implemented on the blockchain as, “hacking” to
the train stations/exchanges Poloniex, Binance, and Huobi, and got them to invest THEIR CUSTOMER’S STEEM BEING HELD ON THEIR EXCHANGES (Hello? Securities fraud?) to power up the fake witness accounts. By doing so, they locked that Steem for 13 weeks (an essential part of the blockchain framework that acts as a security measure in part to prevent entities from attempting something just like this), making it inaccessible to customers wanting to use it for trade/withdrawal.
Why would they take that risk? Apparently everyone was under the mistaken notion that with 20 fake witnesses in place, all Justin needed to do was to have his team write up a new hard fork, change the powering down time from 13 weeks to 1 to 3 days, give the exchanges back their money, and he’d have completely control of the Steem Train.
Remember what I said about how it takes months to implement a Hard Fork?
Okay, say I’m hungry for a delicious homemade cake. No matter how hungry and impatient I am, I can’t take a box of cake mix and magically turn it into a cake by shaking the box. I need to add the ingredients, stir it, bake it, frost it, and then I can have it. No matter how much I wish it were a speedier process, I can’t change the basic things necessary to make the cake.
Apparently Justin told the exchanges they could just shake the box and the cake would fall out.
The Steem Community to the rescue!
In an unprecedented move, the Steem community, made up of people all over the world, from different backgrounds, opinions, and socio economic type stuff, banded together to change their witness votes to the original top 20 who were displaced by Justin’s sock puppet accounts. Essentially, we all pooled our pennies and pounds to lift them up.
Keep in mind, there are hundreds of Steem witnesses and many people (myself included) voted for a number outside of the top twenty (for example, @thekitchenfairy is one of my choices for witness, because she’s a regular steem user like me, and doesn’t campaign for votes or do any type of political glad-handing – she just tries to do what’s best for Steem and support as many people as she can in the process). But the majority of us Steemians put aside our differences, and banded together to save our blockchain.
The tide slowly starts to turn
By March 3rd, the first of the original witnesses @yabapmatt, was back in the top 20, and ten others have slowly climbed back up as well. That means essentially that Justin can’t implement a Hard Fork since he doesn’t have enough sock puppet votes, and the original Steem Witnesses are essentially holding the damn against the huge Tron tide that threatens to overtake (and break) our little Steem ocean.
Where are we now?
At the moment, the exchanges are still refusing to power down their stake, most likely under the mistaken impression that if they just wait a little longer, Justin can give them back their customer’s Steem.
Yesterday, Justin posted a long, bizarre, and expletive-filled post on his Steemit blog called, “The Justin Sun Steemit witness voting policy” that laid out 11 questions for current Steem witnesses to answer, if they wanted immediate backing as a witness. A short time after one of the rightful Steem witnesses shouted out to Justin’s advisor with a, “you might want to check this out” kind of message, Justin edited the entire post to say, “Happy to talk to community. Looking forward to seeing it.” However, since the blockchain is forever and no amount of cyber white out can cover your oopsies, it’s still viewable to anyone who wants to see it. Here’s a look at original post, captured by Steemian @berniesanders (not the presidential candidate… at least, I don’t think it is… 😂 )
Still managing to have some fun on Twitter & Steem!
Special thanks to @arcange for my three new spiffy SteemitBoard badges – Community Supporter, Not Justin’s Friend, and Not Ned’s Friend.
I’m still hopeful I can claim some sort of Twitter badge of honor for being one of the many Steemians Ned Scott blocked on Twitter last night…
A few thoughts as a #Steem normie:
1. @justinsun may have been a great addition but you misrepresented the sale & ruined it
2. You need to stop believing theft is OK.
3. You & Sun need to stop bullying & lying, & take personal responsibility for your back room dealings. pic.twitter.com/X71RI4QimO
— Traci (Cavanaugh) York ❤️'s #Hive (@TraciYorkWriter) March 4, 2020
Oh, and one last little giggle – one of the exchanges I’ve been putting on blast with all the barking my small dog Twitter account can muster, actually started following me last night…
Wait, whaaaaaatttt…? 🤣 pic.twitter.com/OzlF6q6FAw
— TraciYorkWriter (@TraciYorkWriter) March 6, 2020
And of course, there must be GIFs…
Inspired by @andrarchy‘s tweet
We just came up with a new slogan for #Steem on Palnet: https://t.co/jm2hxzII2c Steem: The honey badger of #blockchains
— Andrarchy (@andrarchy) March 4, 2020
Inspired by @theycallmedan‘s tweet –
I was asked by Tron if I could convince Steemians to slow down their votes…
You know what I said?
THIS IS #STEEM! pic.twitter.com/1U3aWZVLcd
— They Call Me Dan (@TheycallmeDan_) March 6, 2020
And a reminder that this isn’t over and we still need to #BringBackTheRealSteemWitnesses, so Steemians – please vote!
Long Twitter story short… TOO LATE! 😂
I’ve been working on this post since yesterday, and I still feel like it’s rushed and missing information, but I’m going to call it here…. for now… 😂
So apologies to everyone on Twitter tired of seeing tags like #SteemHostileTakeOver #SteemNotSteemit #SteemitIsDeadLongLiveSteem #wheresmysteem #steemISNOTtron in their Twitter feed, and I don’t blame you in the slightest if you’ve muted or unfollowed me. I promise that once this blows over, I’ll be back to sharing things from the #writingcommunity, #Tarot, #Witches, #EssentialTremor, and all my other regular topics in the very near future. In the meantime, thanks for bearing with me, and to my crypto friends – STEEM ON!
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Confused but inspired by the power of the people. Hope it all works for you folks.
Well I won’t pretend I understand much of this Traci, but I do hope it all pans out well for you, especially as you have invested so much time and energy into Steem.